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Answers About Study on New User Fees Will Cost City of Lompoc

Lompoc City Council members will be asked Tuesday to approve $8,200 so a consultant previously paid almost $30,000 will appear in council chambers to answer questions about a controversial proposal to charge fees to the city’s enterprise departments for General Fund support.  

The proposed new fees would be charged to six user-funded municipal departments — water, wastewater, solid waste, electric, broadband and the Lompoc Airport — for public safety, street maintenance and capital improvements to city facilities.

Questions about the complex formulas used to assess the three categories of reimbursements to the city’s General Fund paid by utility rate-payers and airport users couldn’t be answered when the proposal for $4.3 million in new fees was brought to the council for approval on March 15.

Although the council voted to delay taking action on the fee proposal for 45 days at that time, Councilman Jim Mosby’s request to ask the consultant to respond to questions failed to win the concurrence of two other council members.

However, Mosby won the votes of Councilmembers Dirk Starbuck and Victor Vega when he brought his motion back on April 5.

“I think it was a little out of the ordinary that the consultant wasn’t here that night so we could discuss a $5 million reimbursement study that is a new methodology,” Mosby said.

The $8,200 will pay for the consultant’s travel and appearance at the City Council meeting, as well as time to review questions.

Mosby questioned the formula used to determine the fair market value of the wastewater utility’s assets that resulted in a charge of $697,196 for public safety, more than four times the amount the water utility would be charged.

On April 11, the city’s advisory utility commission also criticized the methodology for calculating both public safety and street maintenance charges, and unanimously passed a recommendation asking the council to reject the fees as proposed.

Mosby also asked if the electric utility could be credited for the cost of lighting city streets as a public safety enhancement, and if solid waste utility fees for street maintenance could be offset by the cost of citywide street sweeping and cleaning.

That argument is similar to comments in March from Lompoc Airport commissioners, who said their fees should be reduced since the Fire Department stores vehicles at the airport and uses airport property for training exercises.

Three utilities — water, wastewater and solid waste — have been charged General Fund support since 1997 that amounted to 5 percent of each department’s budget.

The proposed reimbursement formula would replace that method and add charges to electric, broadband and the Lompoc Airport.

The proposed fees are in addition to more than $10 million the enterprise funds pay in overhead cost allocations over a two-year budget.

HF&H Consultants, a Walnut Creek firm that specializes in cost allocation and rate-setting plans for governmental entities, developed the reimbursement methodology.

The council will also review a plan requested by Mosby for the city’s broadband utility to pay back almost $5 million in loans it received from the electric utility fund.

The citywide wireless internet service was initially approved in 2004 with financing from Koch Financial Industries and a $1 million loan from the electric utility reserve funds.

However, according to the staff report, another $3.8 million in loans to the Wi-Fi service were authorized in subsequent budget appropriations, bringing the total owed to the electric utility to $4.8 million.

The city’s proposal is for the broadband utility to pay $166,538 per year to the electric fund starting in 2016 and continuing for 30 years. The loan from Koch was paid off in December 2014.

Other agenda items include:

» Approval of allocations of Community Development Block Grant (CDBG) funds, including $254,768 to bring restrooms at parks and public facilities into compliance with the American Disabilities Act; $250,000 for an economic development revolving loan program, and $108,168 to community nonprofits for human service programs.

According to city staff, Lompoc’s recent withdrawal from the Santa Barbara County Urban Consortium resulted in a gain of more than $60,000 in federal CDBG funds as a stand-alone entitlement city.  

» Approval of an exclusive service agreement with Realtor Debbie McComb to develop options for the possible sale of 23 city-owned properties, including downtown parking lots and multiple parcels near the Santa Ynez River.

» Authorization of $943,735 in matching funds if the city is successful in winning a $3.8 million Federal Emergency Management Agency grant for a seismic retrofit of Fire Station No. 1 on North G Street.

The council meeting begins at 6:30 p.m. Tuesday in City Council chambers, 100 Civic Center Plaza.

Noozhawk contributing writer Carol Benham is a longtime local journalist who lives in Lompoc. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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