Members of the Oakdale City Council heard a dreary forecast of the public works department budget and the need for a nearly 33 percent rate increase in water and sewer fees to keep the city solvent at a special meeting regarding all non-general fund budgets on Thursday, May 18.

Public Works Director Joe Leach presented a “very, very draft budget” showing only a $6.1 million budget but the need for over $7.4 million in expenditures for the 2011-2012 fiscal year.

“Expenditures are exceeding revenues in nearly every account,” said Leach, whose budget covers water, sewer, engineering and aviation services for the city.

Leach also asked to add two line-level maintenance worker positions to the public works department and two positions to the water department to replace positions that had not been back-filled though attrition. There was also a request for an additional position to the wastewater facility.

Leach pointed out that current workers couldn’t keep up with maintenance and repair demands and the need for regular flushing of sewer lines had not been carried out, stating that the city often has aggravated expenses when the delayed services have to be performed.

In the first quarter of 2011, the State of California cited the City of Oakdale for excessive sewer spills and blockage. Leach attributes the spills to a dumping of Gunite, a dry mix plaster used for swimming pools, into the storm drain system at the Bridle Ridge Housing Development and a Caltrans project where asphalt seeped through a manhole cover. The cost to the city was $132,000 to clear the storm drains.

“That is not acceptable,” said Mayor Pat Paul, who asked if the money could be recovered from Caltrans. “$132,000 for flushing the system is a big cost to this city.”

Several other capital improvements were in the budget including the need to upgrade the current radio system by $240,000. The cost for the radio upgrade would be split between the water and sewer budgets.

Another increase in the budget was attributed to the request of a secondary on-call person to back up the primary on-call public works person. Frequently in public works on-call incidents, a single person cannot handle the task and the need for a secondary person to be available was regularly needed. The delay in locating and awaiting the arrival of a second person in the past was a big cost factor.

The city council has to weigh a status quo operation with just last year’s 10 percent increase versus the risks of increased costs due to the “neglect” of performing regular preventative maintenance to the city’s water, sewer, and wastewater infrastructure.

“To break even we need an additional 32 percent increase in sewer and water fees,” Leach said.

Leach presented the council three options. They could enact a 42 percent water increase and a 31 percent sewer increase, they could adjust expenditures to match last year’s 10 percent increase, or they could have a smaller increase to match smaller expenditures.

Leach went on to explain that the current fees also did not cover an $860,000 wastewater facility debt payment that was due in August 2014.

“There’s going to have to be some increase,” said Councilman Michael Brennan. “We’re going to have to raise rates soon. Maybe not as much as proposed, but maybe stair-stepped.”

“It’s just printed paper as far as I’m concerned,” said Councilman Tom Dunlop who questioned the need for some of the expenses.

“This is not a balanced budget,” interjected Acting City Manager Mike Botto. “You have to understand, we’re in a world of hurt over here.”

Botto’s comment echoed the concern that leaders have had before him.

“You’re looking like Steve (Former City Manager Steve Hallam) over there,” replied Brennan. “He told us the same thing and you looked at it with fresh eyes. Maybe we’re going to start having to take heed.”

Leach also proposed cutting the Economic Development Department by $134,000 by removing the salary of a volunteer coordinator and not renewing the contract with California Consulting, a grant-writing firm. The volunteer coordinator will become a volunteer position with only $2,000 budgeted for expenses.

The airport budget is to be cut by 22 percent, however Leach proposed a $15,000 a year part-time airport attendant position for the facility.

“The public is going to have to understand,” stated Brennan, “rate increases are inevitable.”

The city council scheduled a meeting to discuss and study rate increases for Aug. 22 at 5:30 p.m.