In a well organized, concise manner, City Manager, Gene Palazzo went through module after module through graphs and explanations of the dire straits of our budget.
Here are some of the highlights.
Brief description of the 2012 Strategic Plan:
- Goal 1: Support quality services and community safety to enhance the lives of our citizens and visitors.
- Goal 2: Thriving Local Economy
- Goal 3: Attain the highest levels of organizational excellence
Most areas of our budget with the exception of the RV Park (at the “S” curve) and HUD are running at a deficit.
Speaking about HUD, how is it that I, as a landlord, cannot have any tenants on HUD because it would create a conflict of interest; yet Jim Barnts is a partner in the low income apartments behind Wal Mart that accepts HUD and apparently is not in conflict of interest? I am awaiting a reply from City Hall to this question.
Let’s start with the more salient points that affect our residents:
The water rates will be evaluated for an increase as they said the rates haven’t been increased in over 10 years. The are looking at budgeting $270,000 for years 2012/2012 to repair/paint Amador & Washington Tanks and Upgrade the Water SCADA system. In Fiscal Year 2013/2014 they’re trying to budget for $400,000 (phase 1 of 3) to install Remote Read Metering System which will allow the city to track a water leak within 15 minutes among other notable advantages. I asked if it will be possible to bill customers for their sewer based on water usage. This would be impractical I was told because the city needs to have assurances of a predictable income in order to repay the $40 mil + loan. I brought up the inequity of a 1 person household paying the same as a 5 person household. This was acknowledged, but there was no further traction on the subject. Under their 5-year Capital Improvement Plan, an estimated cost of $800,000 would be needed to design and build an elevated tank.
For fiscal year 2014/2015 another almost $1 mil would be required to design and construct a 24” Transmission Main from the Prison to the Elevated Tank. Plus Phase 2 of 3 for another $400,000 for the remote read metering system.
Without going into further details, the estimated 5-year capital improvement costs would be $4,850,000.
Discussion was held to increase the number of water users. Many of the people currently on well water are very happy not to have to pay to hook up to the city’s water where they would then have to worry about drinking FSA fluoride against their wishes.
However, the subject of FSA Fluoride was not brought up during the 3 hour long meeting. Mayor Murray has a knee jerk reaction whenever anyone hints at talking about FSA fluoride stating over and over again that it is a tabled subject and therefore that means taboo.
Sewer rates will probably increase almost $2 per month as the sewer fund is running a deficit. City residents currently are on the hook for $62.61 per month. The city can go up to $69.70 per month without instituting another Proposition 218 protest vote.
The rate increase talked about is $1.71 a month increase. This discussion will come before the Council at their June 18th meeting. That will bring us up to $64.32 per month leaving another $5.38 to go adding to our inflationary cycle. People who can’t afford the current rates certainly are not going to like another increase.
I brought up contacting private companies that operate wastewater treatment plants. This has been successfully done in other cities such as Santa Clara. I spent less than 5 minutes on the phone with CEO, David Winsloss of Integrated Engineer, Inc. out of Oakhurst, California. He said they “specialize in reducing operating costs.”
Mayor Murray made it clear that it had to be at the direction of the city council to investigate whether or not to contact private companies to even explore this option.
Councilmember Rich Enea was in favor of investigating not only privatization but also the possible creation of a utility district saying, “It won’t cost that much to investigate, and we might wind up saving our ratepayers money.”
It stuns me that our city might reject the notion of investigating avenues to save the ratepayer money in today’s economy. I asked what happens when more and more people move out of our city in protest to increased rates. The responses were that Brookings, Oregon just increased their rates 8%. Where are the people going to move? one Crescent City resident said that Brookings rates were still cheaper than ours even with the 80% increase.
Another avenue to raise revenues for the WWTP is to increase users. By taking sewer and water lines down Old Mill Road, people could have the option of connecting (at the rate of $9600) and going off their septic systems. Some of the problems with that are that many people don’t want to have that connection charge don’t want to go off their septic and then be tied in to the never ending cycle of increased sewer rates for the rest of their lifetime.
It was mentioned that at a LAFCO meeting recently, a pot of money may become available through the North Coast Regional Management Group that may help get water and sewer lines built. More information needs to be determined on this subject.
The Cultural Center which currently houses the Chamber of Commerce runs up a $53,000 deficit. Council member Schellong suggested giving it to a non-profit and letting them run it but no non-profit has been interested to date. No one else had any good suggestions.
The Chamber of Commerce gets the space at the Cultural Center free including utilities from the City. Doesn’t it make more sense to have them in a spot with greater visibility and accessibility that’s cheaper?
Discussion was held about increasing the Transient Occupancy Tax (TOT). City Attorney Bob Black reminded us that an attempt to increase TOT by a vote of the public in 2006 was a dismal failure. Councilmember Rick Holley wanted to know whether or not the residents understood they would not be paying for the tax? It would benefit the hotel, motels, inns and bed and breakfasts by creating more revenue to advertise their businesses, Crescent City and tourism.
The flip side of that argument is that currently the TOT goes into the city’s General Fund rather than in being dedicated to advertising and promotion of our tourist industry. We can expect the Visitors Bureau to ask for more money come June 18th. They currently get $40,000 and want $100,000.
Gene Palazzo mentioned that in his prior position at So. Lake Tahoe, they had to drop the funding to the Chamber of Commerce and Visitors Bureau altogether and it was up to them to come up with their own funding.
Now, let’s talk about the pool. This is a wonderful asset to the community and another money pit for the city. By changing propane supplies they expect to save money. If that’s not enough of a savings, the idea of closing the pool 2 hours earlier would save $12,000 a month. The Promote Our Pool organization is organizing a fund raiser to help with the costs of running the pool and keeping it open.
During a brief break I spoke with Police Chief Doug Plack. I asked him about whether or not our city had an Honor Farm. It would be a way to decrease expenses for housing prisoners. He said to his knowledge there has never been an Honor Farm, plus there’s no place in the city that could accommodate one. It would have to be in the County.
Also, in 3 hours, nothing was said about our homeless.
BIG NEWS: Jim Barnts, Director of Public Works, confirmed his retirement from the city scheduled for December 2012. He plans on working for the County, a position he has held part time. Many articles have been written on the subject of Jim’s involvement with the WWTP along with perceived conflicts of interest since he’s also a major real estate developer. More on this subject at another time.
While I hear we’re in financial crisis mode, it’s hard to believe when the council approves rates increases to Assistant City Attorney Martha Rice, writes out checks on merit bonuses to 5 employees, and continues to fund the toxic industrial waste (FSA – fluoride) we’re forced to drink. I had calculated that it ran our city $30,000/year just for purchasing and daily testing of the fluoride but was recently told it was at least twice that amount. It appears that other cities have been calculating that it costs them a bundle to replace pipes and parts delivering the water due to the highly corrosive nature of this “fluoride” chemical.
To sum up: Our city continues to perceive that this is going to be a destination point and attract huge tourist dollars. I don’t see this happening in the near or medium future. At the rate our city is losing businesses, creating further financial burdens through more anticipated rate increases on an already struggling populace, and not embracing our true potential which is to make the creation of jobs for our unemployed the highest priority; I just don’t see this becoming a vibrant community within the next 5 to 10 years.