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City Council adopts budget with water and sewer deficits

Net surplus of $11,315 with reserve of $791,000 forecast for general fund

Council members unanimously adopted a 2013–14 city budget that includes a balanced general fund but water and sewer funds with deficits.

Officials are projecting a deficit in the city’s water enterprise fund of $417,000 for the 2013–14 fiscal year, City Manager Eugene Palazzo said. There is a cash reserve of $443,000 in the water fund, but Palazzo said that the reserve would not pay for necessary capital projects, including repairs to water tanks on Amador Street and Washington Boulevard and an elevated water tank near Wonder Stump Road.

Meanwhile, the sewer fund has a $564,000 deficit, Palazzo said. Staff is pursuing additional money from the state to pay off the loan that was used to build the wastewater treatment plant, he said.

“We’re doing a rate analysis, and that will come back to the Council this summer,” Palazzo said.

Sewer rates increased by $5.38 a month in May. That rate increase was the last installment of a $30 rate increase approved by the City council in 2007.

Water rates also increased by 62 cents per 100 cubic feet for multi-family residential properties in the city and county. Light commercial water rates increased by 46 cents per 100 cubic feet. Heavy commercial water rates increased by $1.12.

Through maintaining the essential services without adding any more, the city has been able to maintain a balanced general fund, Palazzo said. The 2013–14 general fund will have a net surplus of $11,315 with a reserve of $791,000, he said.

Palazzo recommended adopting the existing budget and reviewing it in six months to determine if there are unspent dollars that could be used for a one-time expense, such as new patrol or fire vehicles.

“We are balanced in the general fund, barely,” he said. “There are a lot of unknowns and a lot of things that are not included in the general fund budget. Let’s take a look at where we’re at mid-year and see what we can fund.”

The city is currently recruiting a 12th police officer, Palazzo said. He added that his goals are to add a 13th officer to the police force and to move forward with retro-fitting the fire hall.

CDBG funds allocated to RHS, Harrington House

Three members of the City Council approved recipient agreements between the city and Rural Human Services.

The first recipient agreement will provide $275,000 in Community Development Block Grant funds to RHS’s food bank. The second recipient agreement will provide $225,000 to the Harrington House domestic violence shelter.

The Council voted 3-0 in favor of the agreements, with Crescent City Mayor Rich Enea and Councilman Ron Gastineau recusing themselves. Gastineau is employed by RHS and Enea sits on the organization’s board of directors.

Councilwoman Kelly Schellong made the motion to approve the recipient agreement with Harrington House but said she had concerns about the amount of money going to personnel, $135,000, versus the amount allocated to direct client assistance, $25,000.

City Attorney Bob Black pointed out that Harrington House personnel keep its doors open 24-7 and provide women and children with shelter and food.

Council says goodbye to finance director

The Crescent City Council recognized Finance Director Ken McDonald, who is leaving to become city manager for Firebaugh, a small town in Fresno County, on July 15.

“In all my career this has been the hardest one to make the transition,” McDonald said. “I think we got a lot of things accomplished and it’s definitely going to be a better set of books for the next person. We’ve weathered this tough economic storm a lot better than most cities.”

Council members commended McDonald’s patience and skill in helping Crescent City balance its budget and dissolve its redevelopment agency.

“The joke used to be that the City of Crescent City didn’t balance their bank statements or balance their checkbook,” Councilwoman Kelly Schellong said to McDonald. “When you came here, you took the task on with a passion that I have not seen with anybody that worked in the city finance department. Your talents are above and beyond what most cities could probably expect.”

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