Lindsay expects higher revenues by spring but recognize considerable deficit in water fund
By Paul Myers @PaulM_SGN
LINDSAY – The City of Lindsay’s midyear budget review was a mixed bag of encouragement and tough decisions ahead. Since passing Measure O, the City’s 1% sales tax increase in June, there have been promising signs of increased revenue. But enterprise funds where sales tax revenue doesn’t apply are struggling to cover expenses.
According to a presentation by finance director Bret Harmon at Lindsay City Council’s Jan. 23 meeting, is benefiting from better than expected sales tax. Unfortunately after covering for losses at the McDermont Field House before it was outsourced on Jan. 1 of this year and covering for the losses at the Wellness Center, the General Fund shifted from $205,300 to negative $27,400 by the end of the first half of the fiscal year. In all the City covered $173,500 in losses at McDermont and $59,100 at the Wellness Center.
City analysis notes that McDermont’s losses were slightly worse than they had expected and the Wellness Center needs attention moving forward.
At the beginning of the fiscal year on July 1, Lindsay estimated gathering $600,000 in additional sales tax revenue because the tax did not take effect until October 1. They received their first share of the tax at the end of December, but telling what type of trajectory City revenues are on won’t be clear until the end of their third quarter in March.
While there is confidence around City Hall about the general fund, there are legitimate worries about the stability of the water fund. According to Harmon’s report the fund is at a net loss of $62,400 thus far through the year. City services director Mike Camarena alluded the loss is a mixture of factors including treatment costs, late pays but most of all water rates.
Camarena said that no other City in Tulare County needs to treat their water the way Lindsay does. Considering Lindsay gathers their water from the Friant Kern Canal and uses some ground water, there are costs to treating it for safety. He said annual costs for water treatment is budgeted at $257,500 In addition there are customers who do not pay their water bill on time, but as City staff said the problem normally resolves itself. If someone does not pay their bill long enough the water eventually is shut off from the home. They did add they have come across situations where residents have tried to pipe around the meter by cutting the pipe on either end and putting in a pipe of their own.
Camarena said the likely culprit is the water rate. The City has not increased their water rate since 2009. That means residents in newer homes built in 2015 or later pay $27.53 per month for the first 500 cubic feet of water and then $1.02 for every 100 cubic feet after that. Homes built before 2015 generally pay $19.97 for the first 500 cubic feet and then $1.02 for every 100 cubic feet after that. The difference is not so much the year of the house but the size of the meter installed during the time the house was built. Houses built in 2015 or later have a one inch sized meter and houses built before have a five-eighths or three-quarters inch meter.
As well, the cost to maintain the water system is always increasing. Staff pointed out to the Council conservation actually hurts the City when taking into account repair costs. If residents conserve they ultimately pay less for water, unfortunately the water system infrastructure continues to age.
The Council did not take any action of the midyear budget review but they did indicate they are willing to explore water rate increases through the Prop 218 process.
In other news
The City tabled a discussion on the Hermosa, Westwood roundabout near Jefferson Elementary because mayor Pam Kimball and Brian Watson were both absent. They will bring it up again at their next meeting on Tuesday, Feb. 13. However, several members of the public spoke about the proposed roundabout during public comment.
Former Lindsay Unified superintendent Janet Kliegle said she believes the roundabout is a much safer option than a stoplight. She added senior citizens in the city navigate the current roundabout at Elmwood and Hermosa just fine, she included herself in her comment as well.
John Ennis, a consulting civil engineer from Fresno suggested the Council adjust their general plan. He noted the City Hermosa as an arterial road meant to carry traffic through town, but in his opinion it does not behave as an arterial road. Instead it has numerous stores, restaurants and shops. He suggested changing the designation, pushing the entire road down to two lanes and making the area more of a scenic attraction than an arterial roadway.