By TERRI HARBER
Baker City officials still are looking at ways to pare down next year's spending plan before ratifying it during their meeting on June 26, as scheduled.
The plan covers needs throughout the upcoming Fiscal Year that begins July 1, 2012 and ends June 30, 2013.
A group of city councilors along with a member of the budget board are working with the city manager to cut money from the general fund so the ending fund balance reaches $900,000. That would require decreases to bring up the total from the current budgeted ending fund balance of roughly $835,000.
Focusing on reducing personnel costs to achieve the savings was discussed during the budget board meetings. The group isn't limited to cutting from other areas to reach the target amount, however.
Personnel costs comprise less than 71 percent of the general fund budget total of about $5.7 million in the upcoming fiscal year.
The councilors already approved increases for a variety of services to help balance the budget during their regular meeting on May 22.
Mount Hope Cemetery was subject to across-the-board raises of 20 percent as part of the overhaul of fees. Other city departments, such as planning, building and public works, will be asking for higher fees for a variety of city services.
These include a 5 percent increase for most building fees, new fees and minor increases for planning services, 2.9 percent more for utility connections, and increases of 3.1 percent to commercial and residential water customers for water and wastewater fees.
The substantial rate increase for cemetery fees is not tied to the interfund loan made in 2003 from the city's Mount Hope Trust Fund to the pay for needs at the Quail Ridge Golf Course, city staff members emphasized.
Residents have been wondering about it because golf course operations and contractor's payments to the city also have been discussed during recent council meetings. Seven Iron, LLC continues to struggle with the cost to operate and maintain the golf course. Its financial responsibilities have been reworked so its payments to the city could be more easily handled.
The loan for the course expansion was for $310,000 and made between the two city funds in 2003. It financed money the city owed for expanding the playing area at the golf course from nine to 18 holes in 1999 for a cost of about $232,000. The rest of the loan money offset $78,000 in losses related to its operation at that point, according to city staff.
The money is being paid back with interest and "should be fully returned to the trust fund by June 30, 2022," said Jeanie Dexter, the city's finance director.
It was refinanced in 2009.
The city is the debtor and creditor when it comes to interfund loans. Interfund loans are allowed by state law for capital projects.
"In this case it's for the back nine at the golf course," she said.
And is there an affect on the budget for the cemetery or any other aspect of the city's budget?
"They're of no detriment," she said."The interest still is being paid."
Separate funds are accounted for independently.
Of the most significant concern with this type of money movement would be if the city ends up getting profoundly far behind on paying the loan back into its original fund. There would be less money for maintenance at the cemetery if a payment doesn't equal the interest amount that would be paid.
The city could avoid that problem by changing the interfund loan terms if the need were to arise, Dexter said.
Maintenance costs at the cemetery are paid for from the city's general fund and a significant portion of that money comes from the fees paid for burials, perpetual care and other related services.
Interest and burial fees isn't enough to pay for upkeep and services, said City Manager Mike Kee.
Along with the Mount Hope Trust Fund is the John Schmitz Trust Fund. Both help pay for cemetery needs through earned interest, which is just 0.6 percent through the Local Government Investment Pool.
The city pays interest on its interfund loan. This money also ends up in the general fund: about $1,100 right now, though it's based on the pool rate, which changes depending on economic conditions.
The total payment for this outgoing fiscal year would be $20,000 on the interfund loan. Next year the payment also is budgeted at $20,000, Dexter said.