LAKEPORT ? After several months and more than 15 hours of public discussions, the pre-approved budget for fiscal year 2007-08 will go before the city council one last time. Lakeport city officials expect city council members to adopt the first balanced budget in two years at their 6 p.m. meeting, after a public hearing beginning at 3 p.m. today at Lakeport City Hall.
The budget this year addresses spending and sources of revenue to pay off the $1.5 million deficit that has gradually built up since 2002. City officials hope to avoid lay-offs and reduction in city services by finding creative ways to underwrite the deficit.
“We”ll have to carry over that debt next year, along with $600,000 in waste water treatment debt,” said city manager Jerry Gilham, whom the city hired in June.
After a five-year trend of overspending, 2007-08 will be the first balanced budget in two years, and Gilham said they will be “playing catch up” as they continue to crunch numbers through 2008.
“We”re taking this year to employ some things like this downtown redevelopment project, and we”re looking at our fees and asking ?why are we operating with a deficit?” Well, it”s obvious that we”ve been spending more than we were taking in, but we want to analyze it in more depth than that,” said Gilham.
To underwrite the debt and pay for current and ongoing projects needed in Lakeport, officials and advisers are suggesting the city take out loans.
Projects that need funding include Lakeport”s road improvements, downtown Lakeport”s revitalization?set to break ground in spring 2008?and improvements to Lakeport”s waste water treatment plant. The regional water quality board issued a cease and desist order last March that requires more than $2.6 million dollars in improvements to Lakeport”s waste water treatment plant. The latter will be the topic of discussion at the meeting after the budget is reviewed. A presentation by advisors hired by the city, Henderson Financial Group, regarding the sewer rate study will suggest to the council how to attain a loan for the improvements.
The sewer rate study is part of steps the City of Lakeport is taking to meet the requirements of the regional water quality board after an April 2006 flood spilled partially-treated sewage into Clear Lake. The water quality board has the authority to shut the plant down if improvement requirements are not met by November.
“We have been working on it, and that”s why we”re moving ahead with the bond to pay for the improvements. Essentially, storm water from the rains filled the system up, as a result the system overflowed, and they didn”t take into consideration that 95 percent of the water that overflowed was rain water. They are forcing us to make improvements based on false perceptions,” said Gilham.
The loan will add money to rate payer”s bills; the additional $600,000 in annual operating costs of the sewer treatment facility is addressed in the utilities section of the budget, according to Gilham. The final budget will be available to the public after it is adopted.
“It”s come to a point of either fix it or close shop. We have to come up with the money to pay for the requirements because we made a commitment to the projects. The $1.5 million debt is currently underwritten by the city, but we can”t absorb another $2.6 million, we”d simply go bankrupt,” said Gilham.
The only solution to the problem is a loan, according to Gilham.
“We hired Henderson Financial Group to attain a loan, so they will be presenting to us what we need to do to qualify for the loan, because we can”t qualify now,” said Gilham. ?We”ll pay it off with increased rates; it”s our only means of doing it.”
Along with the sewer rate study, the goal of the three-hour session is primarily to discuss the 2007-08 fiscal year budget, culminating with a vote by Lakeport city council members to adopt the budget after 6:00 p.m.
“This will be the last of 15 hours of public meetings we”ve already had on the budget. Our hope is that the session will wrap up the budget they already gave their initial approval of,” said Gilham.
Contact Elizabeth Wilson at ewilson@record-bee.com.
