Lakeport to reconsider $400K line of credit
LAKEPORT — In a special meeting tonight at 6 p.m., the Lakeport City Council will reconsider the $400,000 line of credit in its current budget.
The vote to adopt the current budget with the credit line built in as an option to balance the city”s finances was 3-2, with council members Jim Irwin and Ron Bertsch in dissent. Bertsch, now Lakeport”s mayor, pointed out Monday that council membership has changed since then, and said he plans to ask for a vote to remove the credit line from the city”s 2008-09 budget.
“If we can”t afford it this year, it”s going to be worse next year, because we”re going to have to pay this back,” Bertsch said.
Councilman Robert Rumfelt voted in favor of adopting the budget, including the option to use the line of credit.
“I voted for a balanced budget. The $400,000 line of credit ? which we have not used yet ? was a way to balance the budget ? It was in the budget so if we needed it we don”t have to then vote for it; it”s already been approved,” Rumfelt said.
Lakeport Financial Director Janet Tavernier confirmed the city hasn”t yet used the credit line. Nonetheless, removing the credit line will require finding $400,000 to keep the city”s budget balanced until the end of the year.
“We”re going to have to find other places to make some additional cuts,” Bertsch said. “This borrowing money to pay our bills has got to stop.”
Rumfelt said he is going into the discussion with an open mind.
“If we can find enough savings to save $400,000 we could remove it (the credit line) from the budget, because we wouldn”t need it to balance the budget,” Rumfelt said.
The discussion will be a continuation of the city”s mid-year budget review, according to Tavernier. Bertsch said he believes the city has overspent in some departments and underspent in others. He gave the example of $20,000 of unbudgeted costs the city has spent on attorney”s fees.
“We are under in our spending, and I know we”re not having a line of credit. We know that”s not an option,” Tavernier said.
Tavernier said the city council would have to approve any use of the credit line, which City Manager Jerry Gillham established before he was deployed to Iraq last summer.
Bertsch said having the credit line in the city”s budget to cover costs is unnerving, because he”s heard the possibility of using the credit line come up in numerous discussions since the budget was adopted last summer.
“We”re going to make it clear that we can”t count on borrowing money,” Bertch said.
“The city”s current problems are not due to the economy. It”s due to past practices. The economy hasn”t hit us yet,” Bertch added.
Tavernier confirmed that the city received in January what was expected in property taxes. She said the city typically receives a property tax check from the county twice a year. The check that comes in May is typically less than the January check, but Tavernier said it”s too early to tell whether the numbers will come in as expected.
“It”s going to have to (decline), because people have had their properties reassessed,” Bertsch said.
Tavernier said the council expects to conclude mid-year budget discussions about its general fund, which is fed by property tax, tonight. Redevelopment, water and sewer will also be reviewed.
Also on the agenda for tonight”s meeting is a discussion and possible action item regarding invoices from the Lakeport Regional Chamber of Commerce for the 2008 Dickens Market and Fourth of July fireworks.
Contact Tiffany Revelle at trevelle@record-bee.com, or call her directly at 263-5636, ext. 37.
