A bond measure of a $6.5M bond is approved to be on November’s ballot after the Manzanita City Council meeting met on Aug.7 at Manzanita City Hall. This meeting discussed the new city hall project and offered a general project update.
Randy Kugler, a former Manzanita city council manager, began the meeting by reading his latest presentation about the ongoing water budget issue. Kugler writes that at the July 10 meeting, the mayor attempted to explain how the city water utility operated in order to justify excessive salary payments from the water fund for the city manager and assistant city manager. Mayor Mike Scott had stated, “If the water system was a separate business, it would have its own manager and board of directors.”
“The city water system is not a separate business,” said Kugler. “It is a utility owned by the citizens of Manzanita, operated and managed by employees of the City, under the ultimate authority of the elected City Council who enjoys some discretion as to which entities outside of the City it may choose to enter into contracts with to sell City water. There is no basis to suggest a hypothetical ‘if’ to the facts in this matter.”
For accounting purposes, the water fund is classified as an enterprise fund, Kugler said.
“While all Oregon cities have enterprise funds, I am quite sure that Manzanita is the only city that attempts to justify its overhead allocations by creating a fictional water utility manager who reports to an imaginary board of directors,” Kugler said.
Another main topic that was discussed at the meeting was the Underhill project. The city council has been doing weekly questions and answers with the community and will continue to do so as long as people show up. These meetings are at 4 p.m. at City Hall or the fire station.
The council announced that in this meeting, they would act to place a bond measure before Manzanita voters. If the council approves, voters can still appeal the ballot title. Sept. 5 is the deadline for the city to submit the measure.
One of the mandates for the measure is to get a sense of the cost involved. The City Council explained that the bond would be an addition to property taxes for Manzanita voters. It would be a 50 cent increase per thousand dollars of assessed value.
“We believe this is a feasible number, but it could be less, if needed,” said City Manager, Cynthia Alamillo.
The bond measure won’t be any more than $6.5 million, the council said. The bond measure includes construction of a city emergency hub, police office, administrative and workspaces, multi-purpose room, and a kitchenette with storage spaces. The funds are expected to pay for demolition and construction. The bond may be issued at multiple series.
Alamillo says that the tax would be for a term of up to 31 years for the citizens of Manzanita. The council thinks that they will be able to get some grants from outside sources, which would reduce the tax cost. Once the bond is approved, it could take one year for them to be issued. Everything has to meet the Secretary of State standards.
Citizens of Manzanita would have the first week of September to challenge the language of the bond. A citizen at the meeting asked if the $6.5 million included interest. The city council said that it does and that they are hoping to lower the amount by getting outside grants.
A member of the audience, Gerald Wineinger, said that there is a hidden $3 million.
“To calculate the $0.50 per thousand valuation, they had to know the total including an assumed interest, which is really upward of $9.5 million with interest and issuance fees,” Wineinger said. “They separate the land costs and everything else, which a guess is this project will cost totally more than double $6.5 million.”
The city council said that the loan for the land is paid with other city funds and is not included in the bond.
Another citizen points out that the Public Facilities Advisory Committee spent a year investigating grant possibilities and found none. Grants are competitive and other communities are vying for that money. According to the council, the United States Department of Agriculture (USDA) has suggested that there are available funds. The council hopes to retire bonds faster than 31 years.
A motion was made for placing the bond on the November ballot and was passed by the council. The next step is for the City of Manzanita to submit a notice. Residents in Manzanita could appeal the ballot title. They can go through a process through Tillamook County in order to do so.