Nevada County Picayune and Gurdon Times Newspaper Archive

Council told: Quit spending

There was bad news, followed by bad news at the Prescott City Council meeting, Monday, Sept. 17.

It began with Carl Dalrymple, the city's accountant, telling the council it had to stop spending because the city is facing a financial shortfall.

At this point, he said, the city has less than $200,000 in the budget, and this is after adding $36,000 to it.

The budget will have to be amended again in December, Dalrymple said, to have the proper year-end figures.

"All expenditures need to be shut down unless they're absolutely necessary," he said.

One of the biggest problems has been overtime, according to Dalrymple, who said it, too, must be cut out completely unless it can't be avoided.

"You're on the borderline of spending more than the city's taking in. The money coming in is down, and I recommend the council not spend anything until Jan. 1," he said, adding this is so the city can build some financial reserves.

Dalrymple continued with his bad news, telling the council it needs to consider raising the rates being charged for water and sewer, as both of these utilities are operating in the red. These utilities are sustained solely by the city's electric utility.

The last increases in water and sewer rates, he said, were to retire debt, not for maintenance and operation.

However, earlier this month, the council voted to raise the water rates to pay for a new bond issue for improvements to the water treatment plant.

How new rates could affect this was not brought up.

"There must be some inflow (of capital) here," Dalrymple said, "or something will be shut down.

"Just because something is budgeted doesn't mean the money needs to be spent.

"If you don't make changes, you'll wind up in deficit spending and that's illegal."

Dalrymple told the council all cash accounts are down, as are all city accounts. Because of this, he continued, the city must stop spending until cash reserves can be built up.

Prescott Mayor Howard Taylor said all cities go through the same thing, and each department needs to stand on its own.

He said the city will work to have the electric department not pay for the water and sewer utilities.

Dalrymple had suggested other departments pay for themselves, because the way things are it's a "wash" on the books with money being transferred from one account to another, but no new money being involved.

Taylor agreed, saying each department needs to stand on its own.

Councilman Ann Stockton asked how the city could justify raising rates when it doesn't collect on overdue electric bills.

It was also brought up some businesses in town are operating without paying for the electricity they use.

Electric Department Superintendent Larry Jones said the city absorbs the costs of installing utilities to businesses and puts in all the equipment at no cost.

Other cities, he said, don't do this, but Entergy does something similar, based on the cost-ratio analysis of the business involved.

Jones agreed new customers need to absorb some of the installation costs. He also said the city has a policy concerning overdue bills which is not being followed.

Councilman Dick Bright said the city needs to make sure all the water meters are working and read each month.

Perry Nelson, water superintendent, said this is being done, and getting all the meters in working condition is the department's top priority.

However, he said, it is not known how many past due water bills there are in the city.

Taylor paid former city employee George Darryl Glass a compliment, saying no one could find meters like he did, adding Glass could read meters in the dark.

James Cornelius returned to the topic of unpaid electric bills, saying something needs to be done about people not paying. "It's owed and money we need to get," he said.

"We're working on it," was Taylor's response.

Dalrymple said the department is stretched thin now, as it's bill to Entergy was the largest ever at $455,000, including the fuel adjustment.

"We have an ordinance in place and need to follow it," said councilman Howard Austin.

Billy House, a member of the council, said the city isn't doing those not paying any favors by letting them slide.

Stockton pointed out it's not fair to other customers who pay their bill when some businesses don't, as it puts an unfair burden on those who do.

Bright suggested the council start working on the budget earlier this year.

Dalrymple agreed, saying he would be ready anytime the council is.

Following the discussion, the proposed amendment to the budget was passed.