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Council decides on red zone budget items

The Othello Outlook of Othello, Washington

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As a part of developing the 2016 budget, council members have been asked to review various "red zone" items to either include or put on hold for the 2016 year.

Monday, they examined the items that are included within the city's enterprise funds, including the water, sewer and solid waste funds.

Enterprise funds operate on the revenues brought in from their service charges and are not directly tied to the general fund budget.

In the water fund, council considered two items to be included, a variable frequency drive (VFD) for Well 6, as well as $300,000 for water infrastructure improvements that will be done in conjunction with 2016 street projects.

The cost for the VFD is estimated at $500,000, putting the total projected red zone cost at $800,000.

To cover this, Othello Financial Officer Spencer Williams suggested using money from the water reserve fund,. which will have $1.4 million set aside for projects, such as these by the end of 2016, excluding the minimum fund balance of $200,000.

Council agreed to have Williams move the items into the 2016 budget proposal for the council to review.

In the solid waste fund, council also approved of including an expenditure of $55,000 out of the solid waste reserve fund to rehabilitate alleyway approaches that are affected by garbage truck traffic.

The sewer fund has no red zone expenditures prepared for this year. Instead, Williams said, the fund continues to store money into the reserve fund to offset the cost of a future wastewater treatment plant.

"At the end of 2017, we should have just a hair over $7 million toward that $25 to $30 million plant the Department of Ecology is requesting that we implement," Williams said.

Williams also provided an update on three long-term debts the city is currently carrying. The first is for Well 7, paid for out of the water fund.

"That is one where we have final payment next year," Williams said.

The other two debts are for the Broadway Avenue and the Main Street bonds. The city currently pays around $30,000 each year on the Broadway Avenue debt and will continue to do so until 2026.

The Main Street debt will be carried through 2035. The city currently pays around $135,000 each year, but with the final payment on the City Hall building this year, that money will now also be put toward the Main Street debt, this puts the annual payment at around $245,000.

"In 2014, we dropped one of our debts; in 2015, we dropped the city hall debt; 2016, we'll be dropping the Well 7 debt and then we'll just be left with those other two debts," he said.

At the next regular city council meeting, council members will discuss which red zone items they want to include into the General Fund expenditures. These include a variety of costs from increasing public works staff to funding different items for the Othello Police Department.



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Original Publication Date: November 5, 2015



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