Wednesday, May 23 , 2018, 1:18 am | Fair 57º


Local News

Lompoc Continues Wrestling With Formula for Enterprise-Fund Reimbursement

The Lompoc City Council is continuing to balk at a staff-led formula to spread costs for city-run services across enterprise funds — a methodology that if adopted likely would lead to increased rates for water, wastewater and trash customers or reduced services for public safety, parks and recreation.

Council members voted unanimously last week to appoint a committee — made up of councilmen Dirk Starbuck and Jim Mosby — to work with staff to create a palatable methodology.

“I think we could come up with something that would work, that wouldn’t break the enterprise funds, it would make it fair and be defensible. It would be right,” said Starbuck. ‘I think that there is a compromise that could be reached.”

“This is something we’re going to do for probably years to come,” Mosby said. “It’s not something to be taken lightly.”

City Manager Patrick Wiemiller said the issue needs to be settled soon because staff will start preparing the budget. 

The enterprise reimbursement study calls for $5 million in General Fund costs to be allocated to specific accounts such as water, wastewater, trash and others — with potential for that number to grow in years to come.

“This will eventually lead to rate increases. I don’t care how you defend against that,” Starbuck said.

For months, the city has wrestled with recommendations of the enterprise fund reimbursement study, prepared by HF&H Consultants, seeking to spread costs of operating a city across special funds like water, wastewater and garbage. 

But Management Services Director Brad Wilkie said the study’s goal is to provide an upper limit of how much enterprise funds should be assessed under a legally defensible method.

“It doesn’t say you have to do that now if you approved it. It just says you can’t go above that,” Wilkie said. 

Previous court rulings require some analysis as proof when a city applies costs for a rate-based use to repay the General Fund.

“You can’t just base it on a percentage,” City Attorney Joe Pannone said. “The city’s application of the enterprise cost and payment is supported by this report.”

If approved, the city formula would provide more than $1 million for public safety expenditures, representing either 11 entry-level police officers or 12 entry-level firefighters. Nearly $700,000 would cover government facility expenditures. 

Another $3 million would support road fund activities, Wilkie said. 

But critic Jack Rodenhi said questions centered on the costs assessed for public safety at city properties, and maintenance rates for city vehicles on local roads.

“The charges that were going to be assessed against city utilities for the use of buses and trash trucks were way in excess of what has been found in federal traffic studies for repair and maintenance of streets based on the kind of vehicles used,” Rodenhi said. 

Additionally, public safety costs should be proportional to the costs of the property being protected, he said.

“It’s not supported anywhere and it’s not even logical,” Rodenhi said, citing the high number assigned for the wastewater facility despite the fact “there’s not a lot of crime that goes on out there.” 

He said those examples distorted the study since they don’t represent costs.

The Santa Barbara County Taxpayers Association has objected to the formula, contending it violates Proposition 218 and Proposition 26.

Mosby said the study’s cost allocation is not based on specifics of Lompoc, noting the report cites a $2.32 per square foot for rent for the water department.

“Maybe where they’re from that’s the market rate,” he said, adding that a building he owns rents for $1 per square foot which includes utilities. 

The report needs changes to make it a more legally defensible and more accurate document, he added. 

“There’s a decent skeleton that’s here but I think we need a lot better meat on the skeleton,” Mosby added.

Noozhawk North County editor Janene Scully can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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