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THIS STORY HAS BEEN UPDATED WITH MORE INFORMATION ON THE FINAL BUDGET NUMBERS.
LAKEPORT – Following months of consideration, the Lakeport City Council in a special Tuesday afternoon meeting approved its fiscal year 2008-09 budget, which kept city services intact and didn't include any layoffs.
But the budget didn't receive the council's unanimous approval – Councilmen Ron Bertsch and Jim Irwin voted against adopting the budget. Irwin emphasized his belief that the budget was not sustainable and that the city needed to address its spending, which is larger than revenues.
City Manager Jerry Gillham, seeking to have the budget adopted before he leaves for a yearlong deployment with the Oregon National Guard in Iraq, said it was a “better budget than we ever imagined,” although he cautioned the year ahead will be a tough one.
The approved budget has $4.16 million in expenditures and $3.74 million in unencumbered general revenue income, with $423,000 in Measure I funds covering the difference, officials explained.
Councilman Roy Parmentier moved to accept the budget with Councilman Bob Rumfelt offering the second. Bertsch and Irwin asked for discussion before a vote was taken.
Irwin said he objected to using the Measure I funds – approved by city voters to put toward projects such as roads and the Westshore Pool – to cover city expenditures in the form of salaries and benefits. The budget, he said, wasn't sustainable.
During the last several months, the council and Gillham had been discussing options, some of them drastic, with a suggestion to cut police officer positions and public works staff among them.
“All those problems that we were talking about three months ago, they have not gone away, they are still there, and we haven't don't anything to change them,” said Irwin.
Responded, Gillham, “I don't necessarily agree with you.”
Gillham argued that it was too early to make any drastic decisions about layoffs or other cutbacks, because the city's financial picture was changing.
He explained that last year he had believed the city was $1.3 million in the hole, but the city actually ended the year $156,000 to the good. Helping the city was the sale late last year of the Vista Point Shopping Center property, which brought in about $1 million.
Finance Director Janet Tavernier has helped catch up the city's books, and once an audit is completed the city will have a clearer picture of its finances, said Gillham.
Irwin, however, argued that the city was continuing to live beyond its means and spend down its reserves, which he said wasn't wise.
Gillham said the city didn't get into tough financial straits in one year, and straightening it out couldn't be done in one year, either. He said there could be big changes ahead – he used the exampe of if a new retailer came to the city – that could drastically improve its financial outlook.
Rumfelt said Measure I can be used for general fund purposes in addition to the specific projects its advisory measure, J, laid out. “What I've been concerned about all along is we would lose track of the Measure I spending.”
Gillham emphasized the need to be fiscally responsible while constantly monitoring the city's finances and paying attention to fiscal trends.
He included in the budget a $400,000 line of credit which the city doesn't have to spend but which will give the city flexibility in case of an emergency. It boosted the city's estimated closing balance in June 2009 to $560,000, said Tavernier.
Gillham said the city could turn a corner in this coming financial year, so laying off three police positions and two public works staff didn't make sense.
Rumfelt asked Irwin if what he was asking for were layoffs.
“Yes, I am willing to look at layoffs,” Irwin replied, adding he'd also consider golden handshakes, or early retirement offers.
Irwin said he didn't have all the answers, but he said the city can't continue to outspend revenues by nearly half a million dollars annually. “That's no way to run a city.”
Rumfelt said he believed the city had come a long way in fixing its financial problems, but Irwin wasn't as optimistic about changing trends, noting that he sees the city continuing to trend downward when it comes to revenues. Mayor Buzz Bruns said once the budget was adopted they could continue trimming and refining it. “Are you going to go another four months vacillating every day on this?” Bruns asked.
He said the council needs to let Gillham lead, with Irwin adding that oversight was needed.
“We can't micromanage it from here,” Bruns replied.
Gillham advised the council to accept the budget, get an annual audit completed and begin planning ahead for possible cuts in the future – including golden handshakes – based on how the city's finances are trending.
He said he and Redevelopment Manager Richard Knoll are meeting with a lot of developers who want to build projects in the city, which is a hopeful sign for possible future revenues.
Bertsch said he agreed with Irwin about the budget's imbalance. “I just don't see it getting any better.”
Parmentier said they needed to get a budget adopted and “get on with it.”
“To sit here and argue for another four months is ridiculous,” he said.
Rumfelt added that the budget isn't set in concrete. “We can modify the budget every two weeks if we choose to.”
Irwin wanted to revise Parmentier's motion to remove the $400,000 line of credit. Gillham, however, said if they did so they would have to do major budget revisions to add it back later should it become necessary.
When the vote finally was cast, Irwin and Bertsch were in the minority, voting no I a 3-2 vote.
2008-09 budget highlights
Lakeport Police Department's budget is $1.75 million, of which $1.44 million is salaries and benefits. The department's total budget is down slightly from $1.79 million in the last fiscal year and $1.85 million in 2006-07.
Public Works' budget is $2.77 million, up from last year's $1.3 million. That's largely because of big road projects, including a grant-funded Safe Routes to Schools Project for $549,860, $320,142 for the S. Main Street drainage improvement project and a storm damage repair project on Lakeshore Boulevard for $674,500.
The new budget includes $25,000 for animal control services, down from $53,964 budgeted each year over the last three years. The Lakeport Police Department has taken over animal control duties, which previously were conducted by Lake County Animal Care and Control in a contract with the city. The changeover to the police department is meant to save money.
The Westshore Pool, open for its second summer since being fully reconstructed, has $75,981 budgeted for its operation in 2008-09. That's down $98,587 from last year, during which time the budget still included some large improvement costs.
The Lakeport Redevelopment Agency's budget includes $5.3 million in total revenue, nearly eight times the revenue it had last year thanks to $4.21 million in bond proceeds, as opposed to $6,000 in bonds last year. Total operating expenses for the department are budgeted at $801,050.
The city's general fund revenues are projected at just over $6 million for the coming fiscal year; that's the $3.74 million in unencumbered general revenue income plus the $400,000 line of credit, grants and a total of $700,000 in Measure I revenues.
If that $6 million number proves accurate it will be part of an upward trend for general fund revenues in recent years.
In 2005-06 general fund revenues were $4.2 million, $4.7 million in 2006-07 and $5.8 million in 2007-08.
E-mail Elizabeth Larson at
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