Flaw in Ontario’s proposed city budget reveals an extra $200,000

A recent discovery of an error in the proposed Ontario budget means city leaders could have an extra $200,000 to use to shore up the city budget. (The Enteprise/file).

ONTARIO – A sharp-eyed local accountant has found an apparent flaw in Ontario’s proposed budget, giving city officials as much as $200,000 more than they anticipated.

The discovery comes just days after the Ontario Budget Committee recommended a string of cuts in city services to balance spending for the new budget year that starts July 1.

City Manager Adam Brown on Tuesday confirmed the discovery and said he is summoning budget writers back to decide what to do. He was working to schedule that meeting soon.

Mary Jo Evers, an Ontario resident and finance manager for the Ontario School District, questioned the city’s accounting last week after reviewing its proposed budgets.

She told the Malheur Enterprise it appeared the city had erred in its listing of how much money it had on hand or would get next year.

“I applaud them for acknowledging the error because they could have just let it go,” Evers said.

The development comes just as Ontario voters are getting ballots to consider a 1 percent city sales tax. City officials have said new tax money would not only avoid any cuts in services but pay for expanding police, fire and other services.

Evers raised the issue after the Budget Committee set aside $1.1 million to pay state retirement costs. Brown said that the $198,000 in question is from city revenues – money typically used to pay for day-to-day city operations.

He said the Budget Committee would convene to consider whether to shift that $198,000 to city services instead of the retirement debt.

“The choice for them will be whether they want to spend $200k on services knowing that the PERS contribution will go up by $230,000 or keep it on the PERS side account to pay down debt,” Brown said in a Tuesday email.

While the newly identified money won’t solve the city’s budget woes, it could be used to retain some jobs that were put on the cut list last week. A police officer, for instance, costs the city about $110,000 a year for salary, insurance and benefits.

Budgeters also could decide to use the money to forestall a cut in the Recreation Department. The city was poised to eliminate the program and its two employees, but Evers asked instead that the community be given time to set up a separate government entity to handle recreation services.

The committee agreed, funding the recreation program for another half year.

While the recreation program received a reprieve, other portions in the city budget did not. The committee slashed a police officer, a firefighter and two code enforcement officers. And residents would see another new fee, this time a $5 charge tacked on to monthly water bills. The money generated by the charge would raise about $217,000 a year and pay to keep two police officers, according to city budget documents.

The city’s public works contractor, the engineering firm CH2M, freed up money to cover a second police job that was proposed for elimination. The contractor estimated that trimming back mowing and trash pickup on city property during the summer would save about $110,000 – the cost of a police officer.

The three-day budget committee sessions were difficult, said Darin Bell, a Treasure Valley Community College business instructor who chairs the city fiscal committee.

“I’ve been on the budget board for four years and this was probably the most difficult one I’ve seen,” said Bell.

Bell said there was no attempt to manipulate the budget with cuts as a way to pressure voters to approve a sales tax.

“Some people may see it that way, but it never came up that we need to do this. There is that perception out there but I don’t think the process reflects that,” said Bell.

Evers said she is in the initial stages of preparing a campaign to place an initiative on the November ballot to create the parks and recreation district.

“Somebody has got to do it. Our kids need to have these activities,” said Evers.

Evers, who is the finance director for Ontario School District, said she anticipates creating the recreation district along the same lines as the Ontario Library District.

Ontario voters approved the library district in November 2008. The library district is within the boundaries of the school district and is funded by property taxes.

The library district collects a property tax of 55 cents per $1,000 of property value. The median home value in Ontario is $143,000. Such homes pay $78.65 annually to fund the library service.

Evers said the recreation district could include other assets such as the shuttered Aquatic Center.

“If you can get it out of the city and get its own dedicated tax stream you might be able to get the pool open and the splash pad,” said Evers.

The Ontario Aquatic Center was closed in 2013. Recently a grassroots group, Friends of the Aquatic Center, broke ground on a splash pad next to the Aquatic Center.

“My plan is to gather information and then get it going. Then go to the Friends of the Aquatic Center and enlist help from them,” said Evers.

Even if voters approve the 1 percent sales tax, Evers said she could still move forward with the petition effort.

“What if in five years it is no longer a priority and it is on the chopping block again?” said Evers.

The recreation department serves more than 2,000 youth a year.

The new budget would take effect July 1. A police officer resigned last week, so no layoffs would be needed there, according to Brown. He said the code enforcement officers, who last year handled about 1,500 complaints of trash, junked cars, and more would lose their jobs. The cuts would eliminate the program.

The spending plan approved last week target $10.5 million the city owes to the state retirement system.

Bell said the PERS issue haunted the budget work.

“Going forward, just with the budget direction, revenues can’t keep up with personnel costs and PERS is part of that,” said Bell. “It was a situation where you can make cuts now or make them later.”

City officials have been warning for months that cuts in services were likely unless the city got more revenue. The Ontario City Council instituted a 1 percent sales tax to avoid the cuts and instead expand city services. Petitioners, however, have forced a vote on the tax and ballots with that measure went out to Ontario voters this week. If voters defeat the tax, the city council would act to implement the budget crafted this week. If the tax is approved, the committee would meet again in May to consider how to use an estimated $3.8 million that would be raised each year through the sales tax.

Les Zaitz: [email protected], 541-473-3377.