[quote style=”2″]City Council to Approve Final Budget on June 4[/quote]
The city of Umatilla has set aside $40,000 to operate the Umatilla Marina and RV Park and $30,000 to keep the Umatilla Public Library running in its 2013-14 budget.
The Umatilla Budget Committee approved the document Tuesday night, capping months of discussion. The budget will go before the Umatilla City Council for final approval on June 4.
“I’m just happy we were able to help with the library and keep that operational and that we found some money for the marina,” Umatilla Mayor Pat Lafferty said Tuesday. “Lots of people want to keep that up and running.”
The two measures were each added to the budget and will be funded with increased revenue in franchise fees, primarily from electricity. The city receives a small percentage of all revenue for electricity used within the city, and new developments in the past fiscal year, such as the Vadata data center, have brought in extra fee revenue.
“We’ve got some unanticipated revenues that will go into some of these unexpected costs, including the potential for the marina and the library,” Umatilla City Manager Bob Ward.
This will be the first year the city has subsidized the library, which has been funded fully through the Umatilla Library District tax revenue. The funding gap is primarily due to increased personnel costs, including PERS, Ward said.
“In order for the library to provide the same level of services, the city will have to put in about $33,000,” Ward said.
The library funding was not in the first draft of the city budget, but was added after debate from the budget committee.
In addition to the library funding, the city will also set aside $44,000 for potential management of the Umatilla Marina and RV Park. The property is owned by the U.S. Army Corps of Engineers, and the Port of Umatilla has operated the site on a 50-year lease.
The city council has discussed taking over operations of the Umatilla Marina and RV Park since September when the Port of Umatilla Commission voted to terminate its lease on the site early due to financial constraints. The commissioners gave the Corps of Engineers a one-year notice on the termination, and officials said the Umatilla Marina and RV Park could face closure if another entity did not step up to manage it.
During the April 2 meeting, the Umatilla City Council authorized a formal letter of interest in taking over the property.
“Everybody’s concerned about nobody being ready to take over when the Port completes its lease termination,” Ward said. “It’s likely that September of this year the city will be in the marina/RV business.”
In September, the site will revert back to the Corps of Engineers, which will then turn it over to another entity – public or private. Because most of the revenue for the site comes in during the summer when RV use is the highest, Ward estimated the city will lose $44,000 in operations of the site the first year.
If the city is granted the property, it will not take over debt management for the Port; the Port will continue making annual payments on loans it has on the site. Ward said the Corps could forego a competitive process for property management with the city’s interest, but because of the Umatilla Marina and RV Park’s location, the site must be made available to tribal organizations first.
Ward said the city would look at more effective management of the Marina and RV Park to bring down the operational costs in the next fiscal year.
“We can certainly do more with the marina, but we need to be prepared to accept that loss of about $44,000 in the first year,” he said. “It will take some time to reverse that, either by raising revenue or decreasing expenses.”
Both endeavors will be funded through the city’s general fund.
“This is the fund that is most generally associated with property taxes. However, only 20 percent of these funds are collected in current taxes on property owners,” Ward explained in his manager’s report on the proposed budget. “The remainder of the $2,548,235 in the general fund comes from fees, state revenue sharing, fines, grants and other miscellaneous sources.”
Money from the general fund pays for city administration, parks, planning, building permits and the police department.
The proposed budget also includes revenue from an increase in water and sewer fees approved during a city council meeting earlier this month. Users will see a 10-percent increase in water, which follows a 15-percent increase in 2011 – the first in 15 years – and a 20-percent increase in sewer.
A water rate study in 2011 recommended the city increase fees by 25 percent to pay expenses and preserve the emergency reserve fund. The council voted for the 15-percent increase instead.
“That did not adequately resolve the situation at that time, so now were asking for the other 10 percent,” Ward said.
Sewer rates were not increased in 2011 and have not gone up in 16 years. Ward said the sewer fund’s primary issue is paying off a loan from the U.S. Department of Agriculture for sewer improvements.
“We have been about to put aside some money out of the sewer fund, but we’re still taking $27,000 out every year to pay off this loan,” he said. “Without this increase, in three years our sewer reserve would be depleted and we’d be running in the red.”
Ward said the council decided to “bite the bullet” and approve the entire 20-percent increase instead of asking residents to pay a 10-percent increase now and then another 10-percent increase next year.
The increased fees go into effect July 1, and users will see the higher rates on bills received in August.