Friday’s meeting is a continuation of a discussion begun by directors June 13. A budget must be passed no later than June 30, as the 2012-13 fiscal year begins July 1.
At a June 13 meeting, several directors expressed support for some mixture of budget cuts and tax hikes to balance the district’s ledger.
According to Business Manager Gay Giles, and verified by public documents, the proposed budget will have a general fund deficit of about $438,800.
Giles said Tuesday, June 19, that the deficit did not include a $704,960 list of requested spending items and $851,300 in loans from the general fund to lockboxes that pay for other government functions, including loans to the water and wastewater funds.
Giles said the transfers were necessary to supplement the financial gap that residents’ utility bills don’t cover.
“It was estimated that some of these taxes would not be self-supporting until we got a larger population,” she said.
Giles said that the additional requested-items list — which includes $150,000 for fescue removal at Mascot Drive and Arnaudo Boulevard, $100,000 for repairing several roads and $100,800 for sewage treatment equipment — are less essential and could be removed from the proposed budget.
She said, though, that the “wish list” items needed to be completed as some point.
During the June 13 meeting, Director Andy Su expressed reservations about adding to the budget deficit by approving more spending.
Director Celeste Farron said the board needed to be conservative with its approach.
The board is also expected to decide at Friday’s budget meeting whether to raise its four special tax rates by no more than 4 percent, the maximum allowed by the community master plan.
Those taxes are designed to pay for specific services, such as public safety, roads and administration, parks and recreation, and public works.
Following the June 13 meeting that broached the budget topic, Director Jim Lamb said all those funds would likely need 4 percent increases.
“Special taxes are designed to make sure the community is self sufficient and the county doesn’t have to subsidize it,” Lamb said. “There’s no silver bullet to how you make this budget work — can’t pretend costs aren’t going up.”
The special taxes, Giles said, could be used toward any discretionary spending. For example, she said the 2012-13 budget anticipated that $2.2 million from the roads and administration fund would be used to cover shortfalls in the public safety and parks and recreation funds. Those funds cover the cost of sheriff’s deputies patrolling the streets and allow for the local library to be open for extended hours.
But Giles said the special tax funds are accounted separately so the community services district knows whether the revenues cover what they are supposed to.
“We want to see if the tax revenue that we have especially identified for public safety is covering public safety,” she said. “…This clearly shows that they don’t.”
It’s her opinion that it’s necessary to increase the special taxes on a consistent basis to keep Mountain House from falling behind.
“What’ll happen eventually, if you don’t raise those (special taxes), you will lose ground and won’t be able to support public safety,” she said.
Giles said that in 2011, the board raised the public safety and parks taxes by only 2 percent each. The board did not increase the roads and administration or public works taxes.
Director Bernice King Tingle agreed last week that all four special taxes would likely need to be raised this year, but she said she thought cutbacks could soften the blow on taxpayers.
“I agree with an increase to keep up with the pace, but how much?” she said. “Ideally, we go up no more than 2 percent overall. It averages $60 to $75 per household (annually).”
Among the moves already discussed are eliminating the annual Mountain House Kite Festival and Fun Run, the most recent of which drew hundreds to Central Community Park on June 9.
Directors also mused about eliminating two music in the park events and clown entertainment at the Fourth of July celebration and withdrawing the fescue removal proposal.
Giles noted, however, that no decisions had been made.
“We do not have official direction to do anything yet,” she said, adding that plans were going forward for Fourth of July festivities, as they are planned for mere days after a budget must be approved.
• Reporter Denise Ellen Rizzo contributed to this story.
At a glance
The Mountain House Community Services District staff has set forth a proposed budget for the fiscal year spanning July 1, 2012, to June 30, 2013.
• Total overall expenses: $17,218,800
• Total overall revenues: $16,689,400
• General fund expenses: $2,598,100
• General fund revenues: $2,159,300
• General fund reserves (expected as of June 30, 2012): $2,431,484
• Public safety expenses: $3,514,200
• Public safety revenues: $1,709,400
• Roads and administration expenses: $789,300
• Roads and administration revenues: $3,385,500
• Library and parks expenses: $636,600
• Library and parks revenues: $321,900
• Public works expenses: $223,100
• Public works revenues: $320,400
• Transfers made from general fund (loans to other funds): $963,710
Source: Mountain House Community Services District