Council passes 2019-2020 fiscal year budget 3-2 after contentious exchange, future Wellness Center and capital improvement project funding in doubt
By Paul Myers @PaulM_SGN
LINDSAY– Lindsay’s budget, is heading on a path for the straight and narrow, very narrow. In fact, the budget even passed by the narrowest of margins for a five-person council, 3-2.
While the City’s practically done with deficits and the general fund is healthier than it has been in years, Wellness Center funding and unfunded capital improvement projects leave Lindsay with few paths to keep the city floating along.
During his budget presentation at Lindsay’s June 11 council meeting, finance director Bret Harmon expressed his concern over one of one of the Wellness Center’s key revenue sources. According to Harmon, the Lindsay Hospital Board is seriously considering withdrawing their extra funding, reaching into the tens of thousands of dollars. Harmon says the Board has been steadily decreasing their contribution from $112,000 in 2017, to about $70,000 last year and only play to provide about $60,000 this year.
However, Harmon says that the Lindsay Hospital Board is still meeting their $233,000 base contribution requirement per their memorandum of understanding with the City. Those funds are intended to help the City fund their debt service for the Wellness Center. According to Harmon’s presentation the City paid $132,300 in debt service in 2018-2019, and will pay another $132,300 in debt service for the upcoming 2019-2020 budget.
Even worse, the general fund transferred an unexpected $81,700 to the center at the end of the 2018-2019 fiscal year which ended June 30.
“If we lose [the Hospital Board’s] funding it will jeopardize the future operations of the Wellness Center,” Harmon said. “Their contribution has been considerable over the years.”
Harmon said there are some on the hospital board who want to cut off their contribution to the center, but Mayor Pam Kimball said there are still others who would prefer to see it continue if not increase.
The two governing bodies had a conference date of June 20 and banded an ad hoc committee between the two boards. Rosaena Sanchez and Laura Cortez will represent the City while Rick Loftin and Valarie Velasquez will represent the Hospital Board.
At last week’s June 25 Lindsay City Council meeting, Harmon said the City is expecting to have a $21,200 surplus by the end of the 2019-2020 fiscal year. Harmon’s presentation noted that the general fund is expected to transfer $200,000 to the Wellness Center. But Harmon also stated in his report that there is a concern as the Wellness Center continues to require a significant transfer from the general fund and risks decreased support from the Lindsay Hospital District Board.
Harmon says that the water fund is capable of funding its annual operations, but when it comes to major projects the money just is not there. For the upcoming year the Lindsay water fund is projected to bring in $1,963,500 in revenue to $1,922,200 in expenses, landing them $41,300 in the black. Unfortunately the water fund has $4.8 million in unfunded projects over the four years following the 2019-2020 budget.
For the upcoming year the City is looking to the water fund to cover $790,000 worth of capital improvement projects that include projects such as a water treatment plant filter bank renovation, Sustainable Groundwater Management Act plan development and a Supervisory Control and Data Acquisition expansion. By 2023 the water fund will have to find more than $1 million for a Well 14 filtration project. Then by 2024 the water fund will need to find $2.75 million for a Well 11 water treatment project. The amounts are likely to increase as costs go up over the next four years.
It is a different fund but the same story on the sewer side of things. Harmon has projected that the fund will net $314,600 at the end of the 2018-2019 year. But he projects the sewer fund to only come out ahead by $28,400 at the end of the 2019-2020 fiscal year. For the upcoming year Harmon notes that the fund has $900 more than they need for their capital improvement projects but have $1.35 million in unfunded projects over the next two years.
Almost every project scheduled to be taken on in 2021 is over $100,000. Lindsay’s sewer main line replacement projects is estimated to cost $175,000 in 2021, and will rise in cost over the next four years, their waste water treatment plant drying beds renovation project is expected to cost $150,000 in 2021, two oxidation ditch repairs will cost $200,000 and waste water treatment plant building repairs and equipment placement will cost $275,000.
Harmon added that the open market is not responsive to help the City fund their capital projects, and finding funding is going to be a reoccurring item at council meetings.
“That is going to be an ongoing conversation with Council…we have gone to the market for loans and they have told us no,” Harmon said.
Harmon added that the City’s plan is to cut down their debt service to show a positive trajectory where the open market would be willing to consider issuing Lindsay a loan.
“At that point the market will be at least willing to talk because they’ll see the trajectory we’re on but at this point the open market is not something we have access to,” Harmon said.
Harmon has projected spending $368,042 in a mix of general fund debt service to their new fire engine, money owed to the Tulare County Association of Government, the McDermont Field House Building and the city library. By the end of the 2018-2019 fiscal year Lindsay would have spent $324,000 in general fund debt service.
Helping push the debt aside is the one percent sales tax the City passed in June 2017. Projections initially showed the City would collect an additional $908,000 annually in general fund sales tax revenue when it first passed, but Harmon says Measure O is likely to bring in at least $1.1 million in 2020. And they are counting on a one-time revenue of $212,000 from the sale of Sierra Vista Plaza and $125,000 from cannabis retail tax revenue.
Harmon projected that the City’s general fund will end up $379,400 in the black at the end of fiscal year 2018-2019, with $5.5 million in revenues to $5.1 million in general fund expenses. He projects the fund to net $335,300 by the end of the 2019-2020 fiscal year with nearly $6 million in revenues to $5.6 million in expenses. And the general fund has $190,000 worth of capital improvement projects of their own. Of their nearly $200,000 project list a $110,000 Self-Contained Breathing Apparatus (SCBA) masks replacement item drew councilwoman Yolanda Flores’ ire during Harmon’s presentation on June 11.
Flores aggressively questioned the price and quantity of the SCBA masks to determine whether it was a worthy place to spend money.
“I don’t know, I think that is something I’d like to discuss further…I know they are necessary when we do have fires…but how many officers are working on any given day,” Flores asked.
Harmon patiently explained that because the Lindsay police force also serves double-duty as their fire department, on duty and off duty officers respond to fires in town or around the city limits. Of course, any questioning is moot since the State of California states in their General Industry Safety Orders that respirators shall be provided by the employer when such equipment is necessary to protect the health of the employee. And the cost of the SCBA masks came in cheaper than originally priced.
“The first number I got was $200,000, so I was pretty jazzed about $110,000,” Harmon said.
Narrowly passed and 10 seconds gone
Lindsay’s clearest budget that projected surpluses in nearly every major department was still not enough to get unanimous support. After public comment, Flores pointed to page 10 in the budget to make note of the number of low income households in the city. According to the City’s budget there are 2,372 households that make $49,999 or less, and only 850 households that make $50,000 or more. She went on to pose the question, why the City was not hiring more people from Lindsay.
“We have plenty of educated people here in Lindsay that have to work elsewhere because the city of Lindsay does not hire them,” Flores said.
Harmon inquired about what jobs she was referring to, when she condescendingly stated, “any job.”
City manager Bill Zigler stated that the aim for the City is to find a qualified candidate, not a candidate from Lindsay.
“We try to hire the best that we can because our responsibility is providing services to the residents of Lindsay, not give person ‘X’ the job,” Zigler said.
Flores continued on stating that she would like the City to still hire from within Lindsay.
“I strongly believe that what is best for the community is hiring from the community,” Flores said.
“Then I would encourage you to encourage them to apply for the jobs when they are available,” Zigler responded.
Harmon stepped in to state that the City publishes job opening on its website in addition to several employment portals. The most notable have been Indeed and LinkedIn. Other portals have been more-or-less bespoke to current government employees. Flores fired back stating that she has not seen Lindsay job postings and she is on all of the portals.
Then, when a woman approached the microphone after the public comment portion, Mayor Kimball is heard on the City’s council second recording from the June 25 meeting warning the woman that she is speaking out of turn. When the woman begins to speak into the microphone at minute 42:32, the recording turns silent and resumed at minute 42:42. The obscure 10 second silence ends with Kimball stating that they cannot ask a question because it is illegal, and then promptly calls for a vote on the budget.
City manager Bill Zigler responded to the Sun-Gazette’s inquiry over the silence via email stating, “The amplified audio was reduced during the segment…due to someone from the audience insisting on addressing the Council regarding the budget following the closure of the public hearing. They were able to address and be heard by Council, staff and the audience, but their comments were not amplified.”
Councilman Brian Watson called for passage, Cortez seconded the motion. Kimball, Watson and Cortez voted in favor of the budget while Sanchez and Flores voted no.
This article was updated at 3:51 p.m. on July 3