Oakridge utility rates to rise

OAKRIDGE — Residents can expect their utility rates to rise soon because of the city’s recent cash flow problems, City Manager Gordon Zimmerman said Wednesday.

With about 150 fewer water and sewer customers than a year ago, the city’s utility revenues have fallen about $200,000, from about $1.4 million to $1.2 million, said Zimmerman, who added he has no idea how much rates might rise.

“It will be based on reallocating the new costs of running the water and sewer system,” he said.

The news last week that the city’s budget numbers don’t match those provided by the city’s bank, Siuslaw Bank, has resulted in about a fourth of the city’s 28 employees receiving pink slips effective at the end of this month, including three of the city’s nine police employees.

And more layoffs could be looming, according to a document of the financial crisis that Zimmerman prepared for the City Council for its meeting tonight at Oakridge High School.

Zimmerman has declined to provide a dollar estimate of the budget discrepancy, saying city officials are still investigating.

The salaries and benefits of the employees who received layoff notices, and four seasonal workers who won’t be hired, totals about $32,000 a month, he said Sunday.

Zimmerman said Wednesday he has a ballpark figure, “but until I sit down and take a look at it, I’d rather not (disclose it). It is significant.”

Revenues, expenses understated

The situation is so dire that the city has borrowed a 1998 Chevy Lumina from the city of Woodburn for employees to use at no cost, thus forgoing 55-cent-per-mile mileage reimbursement.

Zimmerman doesn’t think any sort of accounting problems at Siuslaw Bank have anything to do with the discrepancy. “The chances are very good the (bank) records are correct,” Zimmerman said.

In his document to the council, Zimmerman wrote: “Determining what happened involves looking back. How did we get into this situation? I honestly don’t know. We are still trying to determine what happened or what combination of events happened that caused this situation.”

Zimmerman said in the document that reports generated by the city’s accounting software understate revenues and expenses, and that employee turnover in recent years might be a contributing factor. The city has had three finance directors in the past four years, he said. If all of them did things differently or structured utility accounts differently, that could be a problem, he said.

“And then you had interim people in the meantime who may or may not have done things the same way,” Zimmerman said.

The city has seen the number of utility customers drop from about 1,480 to 1,326 — the result of folks moving away from Oakridge, Zimmerman said. “We have a lot of empty houses for sale,” he said. “They’ve gone to find jobs.”

Recent Census numbers show a loss of more than 500 residents, from 3,765 to 3,205, in less than a year, he said.

The city plans to ask Siuslaw Bank for a tax anticipation note to help it make payroll until tax revenues are received next year, Zimmerman said. If the note is denied, the city will have to look to another financial institution for the loan, he said.

The council recently approved the city’s 2011-12 budget, which totals about $7.5 million in all funds.

Zimmerman has acknowledged that community speculation has focused on a possible misappropriation of funds, but said he doesn’t think that’s the case.

Auditors coming to town

Auditors from the Pauly Rogers accounting firm in Tigard will be in town at the end of the month, and the city will seek the firm’s input, Zimmerman said.

The city also will work with its software vendor for a complete performance review, as well as United Pipe on a performance review of the city’s utility billing system.

In all, the city is trying to shave $30,000 to $40,000 a month from its expenses. In addition to the projected layoffs, cost-saving measures include restricting all travel and conference budgets to those required to maintain local and regional contacts; restricting all discretionary spending; and scaling back a $133,000 Garden Road reconstruction project by about $80,000.

Also, city department heads will once again be paying their own water and sewer bills, after having them covered by the city in lieu of forgoing raises in recent years, Zimmerman said.