Strapped city of Blaine utilities need a boost
In her budget report to Blaine City Council, finance director Meredith Riley highlighted a looming fiscal crisis that could put a handful of city funds in the red.
“There is a dramatic shift to a negative fund balance,” Riley told council members at their November 14 meeting, starting with the ailing street maintenance account that is forecast to end 2006 with less than $1,000 and head into a negative balance the following year. “The penny-a-gallon gas tax that has supported the street fund has been in decline,” Riley said, and council will have to look for another source to pay for approximately half a million dollars a year the city spends maintaining streets.
“We need to turn this around,” said city manager Gary Tomsic. “More revenues or cut services.”
The electric utility fund faces a similar gloomy scenario, forecast to sink into a negative fund balance by 2008. “Council isn’t going to let this happen, I would hope,” Tomsic said. Public works director Steve Banham said that rates and fees needed to be continually adjusted for inflation. “Without these adjustments we go below the line,” he said. Tomsic added that a two percent increase in revenues would keep the utility in the black.
Since it was established in 2000 the stormwater utility has kept rates and fees the same, and “it appears headed in the same direction as streets,” Riley said. “Just increasing by the consumer price index really helps all these funds.”
The water utility is staying fiscally healthy by retiring debt and the wastewater fund already has planned increases to handle the $30 million in infrastructure upgrades in the next five years, but Riley said that fund will also bear watching to make sure it can handle the debt load. “It’s hard to project right now,” she said.
“What all our utilities show us is the importance of making annual cost-of-living adjustments,” Tomsic said. “We’d like to encourage automatic adjustments every year. But with what’s going on in our community right now, we are just being hammered. This really has to happen.”
Another fund in trouble, Riley said, was the airport, which borrowed money from the general fund it couldn’t pay back. “The projected revenue from operations is not covering debt at this time,” she said. “We definitely need to review this fund.”
On the bright side, the city’s general fund is benefiting from an increase in sales tax and will be able to handle the cost of some additional staff.
The budget adds 3.5 full-time equivalents, providing counter help in several departments and a full-time position to help with building inspections and code enforcement. “One of the things we heard at our community meetings is we need to do a better job with code enforcement,” Tomsic said. The reason we don’t is we don’t have anyone to do it.”
From the audience, Blaine resident Lincoln Rutter said people who use the service should pay for added staff needed in the planning department. “Your fees are minuscule compared to taxes,” he said. “Why not increase fees instead of using the general fund for staff and then you’d have more for streets?” Tomsic said that could be one strategy council would consider as they revamp city finances.
The public hearing on the budget continues at the November 28 city council hearing.