Budget cuts in 2011 planned

The city of Millwood is feeling the impact of the current economic downturn.

During Monday night’s City Council meeting, city treasurer Debbie Matkin discussed the effects of Millwood’s financial pinch during her general overview of a preliminary 2011 budget.

Her presentation included a need for a proposed increase in water and sewer utility rates, as well as the lack of funds for the recently approved traffic calming improvements.

Council also heard from Spokane Transit Authority CEO Susan Meyer about the potential loss of area STA bus and paratransit service.

The city’s 2011 budget, which forecasts an estimated revenue reduction of $147,000, is set for final approval next month.

The projected loss of revenue stems from a reduced property tax valuation of $11,000, the potential loss of liquor store revenue of $40,000 should I-1100 and/or I-1105 pass, reduction to sewer and water fund reserves of $30,000, reduced retail sales tax of $30,000, and loss of interest on city cash reserves of $38,000.

The liquor initiatives were rejected by voters, which could restore $40,000 to the budget.

Matkin said the general fund is balanced, but its funds are a declining.

“In order to balance it this year, we had to move property tax from the street fund into current expense,” Matkin said.

With the transfer of funds from the street fund, and the decline in projected revenue, the proposed traffic-calming measures on South Riverway, Bridgeport, Empire and Fowler are currently on hold.

“It’s still a top priority,” Mayor Dan Mork said in a phone interview following the meeting. “The project will be based on the revenue outcome of 2010.”

Mork said the city’s main priority for next year is shoring up the sewer and water funds. Currently both funds are operating in the deficit. Based on a recommendation made during the Washington State Auditor’s Office report this fall, the city separated both funds from the general fund.

“Those funds need to be self-supporting,” Mork said.

Millwood issued bonds in 2003 to finance the water and sewer systems completed in the early 1990s. The state requires the city to hold significant cash reserves in each fund until the bond debt is paid. Both bonds reach maturity in 2015.

According to Matkin, the reserves were depleted by inflation over the last few years. The lack of required reserves, along with rising costs of water and sewer equipment and maintenance, require the city to look at raising utility rates.

Matkin’s proposal to fund the $191,000 deficit includes using $107,000 in accumulated interest and a proposed utility rate increase of 18 percent. The combined increase for both sewer and water equals $8.50 per month per household.

The city’s previous rate increase was 1995, when it raised water rates by $1.

The council plans to review a final budget next month, and will ask for public input before adoption.

In other city news, Meyer presented a preliminary proposed reduction of STA service for 2011.

“It’s a matter of staying in business,” Meyer said.

Meyer told the council STA cut 3 percent of the fixed routes in 2010, with an additional 7 percent planned in 2011, reducing $3 million dollars in costs, and a million fewer riders. STA plans to eliminate another 7 percent in 2012.

The nine routes proposed for elimination include route 95 that serves Millwood, and paratransit service for the area.

Bernadine Wilson, administrator of the enhanced residential adult care facility Bethany Place, 9111 E. Upriver Drive, said 20 of her 38 residents use the STA paratransit service as their only source of transportation.

“It will greatly impact our residents,” Wilson said. “I’m pleading to keep the paratransit for those people who can’t get around any other way.”

Meyers said they are taking public input through December. A public hearing is planned for February and final board action takes place in March. The revised bus routes would take effect in September.