City slowly digs out of budget hole

By RAELYNN RICARTE

News staff writer

January 24, 2007

The City of Hood River could eliminate its budget deficit within two years — 12 months ahead of schedule.

“We’re making significant progress and will keep working on it diligently,” said Steve Everroad, finance director.

He reported to the City Council on Monday that the $1.17 million general fund shortfall had been reduced to $822,253 by June 30, the end of fiscal year 2005-06. And another $260,000 would be shaved off by July 1, the end of fiscal year 2006-07.

However, Everroad said, with more property tax money rolling in than anticipated, the deficit could be lowered to $400,000 to $500,000 within the next six months.

If that occurs, he said, the city would likely be back in the black by the start of fiscal year 2008-09 — one year ahead of schedule.

Everroad said the municipal court and ambulance revenues are still dropping below expenditures. However, he told the council that steps were being taken to remedy that situation.

According to Everroad, a more aggressive collection agency is being sought to retrieve $150,000 in unpaid bills for ambulance rides. If the typical 65-75 percent was retrieved, he said that monetary challenge would be eliminated.

He said municipal court was financed by tickets and fines but was currently running $128,954 in the red. Like the ambulance service, the court had more than $100,000 in unpaid debts. In addition to pursuing collections, Everroad said the city needed to look at ways of reducing expenses, such as lowering the cost of criminal trials.

“I think the city’s doing a great job and we’re on our way to getting this deficit under control,” said John Phillips, a citizen member of the budget committee.

Bob Francis, city manager, said several steps taken in 2006 are stabilizing the budget. And that made it easier to see where reductions could be made.

City administrators now bill each department for time spent dealing with its issues. Money in dedicated accounts is required by law to be removed only for a specific purpose, such as road maintenance. However, Francis said it is permissible to charge these accounts for oversight.

For example, the city, as a utility provider, can transfer about $95,000 per year into its general fund by charging a franchise fee to its water and sewer accounts.

In addition to bringing more money into the general fund coffers, the city has raised several fees. Most charges for planning services were tripled and an additional $100 charge was added to ambulance transports.

A fire suppression fee of about 50 cents was tacked on to monthly utility bills. And a stormwater maintenance fee of about $2.50 per month was levied on each household.

The city’s department supervisors were also challenged to trim their respective budgets by 10 percent for 2006-07.

“I’m sure that I speak for everyone on the council when I say this is great news,” said Councilor Paul Blackburn after receiving the budget message.

The council has called a special meeting in the municipal chambers for 6 p.m. on Jan. 29 to consider a pay raise for Francis. For the past two years, he has been held to a $69,684 salary with small cost of living adjustments due to budget constraints.

The discussion centered last year on whether he should receive a 15 percent increase so that his wages topped Police Chief Bruce Ludwig and Engineer Dave Bick. Some councilors argued that Francis, as the lead staffer, should make more than his employees.

But, in the end, consideration of the large raise was postponed until the deficit showed improvement.

When Francis arrived in January of 2004 he inherited a budget that was already $397,000 in the red — and which kept climbing.

The council then approved the plan devised by Francis and Everroad to dig the city out of its budget hole within three years.

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