Helper weighs options on deficit
Before setting out on projects to improve its deteriorated water systems, Helper City wanted a prioritized list from its consulting engineers on what needed fixing first. The list has been turned in, and it turns out that the city could begin just about anywhere.
"Just about everything on it was high priority," commented Councilman Gary Harwood at a special council session Thursday. That was more a confirmation than a surprise to the council. The culinary water and sewer systems are 70 years old in some places.
What's been going on underground is apparent on the surface. A person who drives along the streets will see the patches in the pavement. Every one of them represents a pipe break that had to be fixed by a city crew that had to be paid, using parts and equipment that had to be bought. The expense is "just a bandage on top of a bandage on top of a bandage," in the words of Councilman Chris Pugliese.
It's not only water leaking out. The city is hemorrhaging cash to the tune of $2,000 to $5,000 a week for spot repairs, estimated Mayor Dean Armstrong.
Bad as that may sound, however, it is not the most pressing problem - the reason for Thursday's special session. The city heard that its budget is running about $200,000 short of where it should be halfway through the fiscal year. That word came from Doug Rasmussen, an accountant with the city's audit firm, Smuin, Rich and Marsing.
That shortfall comes from a $141,00 deficit and the need for another $65,000 to meet state requirements for an "unassigned balance" - a rainy-day fund or fiscal cushion that municipalities must maintain. The deficit comes despite last year's property tax hike, which is expected to bring in an additional $80,000. However, Armstrong noted that the tax hike was necessary merely to offset the loss in sales tax revenue the city incurred as a result of the legislature's changes in sales tax on mining equipment. The state exempted some equipment from tax and also changed the location of where the tax could be collected from the point of sale (the city) to the point of delivery (the county).
The deficit figure stands to be modified when the city receives its share of property and sales taxes, but Rasmussen still advised the council that the city is "heading down definitely the wrong road." He said the council has "hard decisions to be made to decrease expenses."
After Rasmussen had left, the council got into looking at how it might close the gap become income and expenses.
Armstrong offered a few rhetorical examples of what might be done.
"We could close the library and save, what, $20,000 a year? We could close the museum and that's another $20,000. We skip hiring seasonal workers for the parks and then not water the lawns in the parks and cemetery so there would be no grass to mow. We could close the pool."
"And people would leave town," responded Councilman Kirk Mascaro.
Or, the mayor continued, the city could revise its policy of paying 100 percent of health insurance costs for employees and adopt an 80-20 plan. But the city already pays relatively low wages and a move like that might make workers start to look elsewhere, Harwood commented.
Not only would those cuts in service fall far short of $200,000, but the city's infrastructure would still be falling apart, Armstrong said.
So the focus is shifting to finding additional revenue besides finding some cuts in services. Among the items to consider before the next special session on Dec. 29 are:
Possible increases in rents that other utilities (phone and cable) pay to string their lines on the city's power poles;
Revision of the city's electric rate structure to more closely match that of Rocky Mountain Power;
Garbage and sewer rates; and
A rate agreement with Morgantown Machinery, which now has a new 1.5 megawatt electric service line for its new facility. It is the only customer on that line.
Armstrong seconded the earlier comment of Rasmussen that the financial problems of the city did not crop up overnight and won't be solved overnight. "But we have to show that we're moving in the right direction," the mayor said.
He reiterated the comment he has made several times over the past year, that it will be crucial for the city to get its revenues and expenses in balance to qualify for grants and loans for infrastructure improvement from various agencies at the state and federal levels.