LIVE OAK, CA (MPG) - At the Live Oak City Council June 19 meeting, Interim Public Works Director Jeff Nelson provided an update about the Wastewater Treatment Plant Solar Power Project, which will construct a solar power collection facility over one of the ponds at the treatment plant.

“It’s going to meet a large portion of the treatment plant’s electrical demand,” Nelson said.

Project funding is coming from a $1.68-million grant from the State Water Resources Control Board, which was awarded to the city in 2018. Some funding was released to cover the design process, so City Council earlier this year approved a consulting agreement with EDesignC to begin designing the project and preparing construction bid documents.

But the bulk of the funding won’t be available to the city until the selected construction bid is reviewed by the State Water Resources Control Board and approved by City Council.

“We have a very aggressive schedule to try to meet the conditions of the grant,” Nelson said, because the funding agreement must be submitted by the end of the year. The city will release the request for bids in July, with plans for the selected contractor to start work by November. Construction completion is expected by May or June 2025.

Councilmember Bob Woten said, “I think that it’s a fantastic idea. I’m glad you’re on top of it to get it moving for us.”

Councilmember Jeramy Chapdelaine agreed: “It’s good to see it moving forward.”

Mayor Ashley Hernandez said, “I’m excited for this. I always love something that we can offset costs for the city.”

Since this was an informational item, no council action was required.

City Council next considered the quarterly write-off of past due water and sewer accounts to be sent to collections. The 10 delinquent account holders were renters, and their accounts total $3,547.71 in unpaid sewer and water charges. Notices were sent to these account holders but there has been no response. 

City Council voted unanimously to send the delinquent accounts to collections.

Councilmembers then reviewed the proposed budget for Fiscal Year 2024-2025, which was presented by Interim City Manager Mark Scott and Finance Director James Ramsey.

The proposed budget totals $13.9 million in spending, with $4.9 coming from the General Fund and the remaining $8.9 million coming from enterprise funds and restricted special revenue funds. The city expects to have a balance of $9.34 million in funds available at the end of this fiscal year, with $2.64 million of that available in the General Fund.

“It’s encouraging that we have a fund balance…but that’s just barely enough to say we’re doing an emergency fund at all,” Scott said.

As a small city, Scott said, Live Oak needs a larger emergency fund.

“So, this is not a great situation but it’s our reality right now,” Scott said.

“The real issue with this budget isn’t so much line-item detail; it’s where are we going to go in the future?” Scott said. “Because we’ve got a situation where the Water Enterprise is literally taking funding from the General Fund. We can’t do that very much longer. The council is aware of that.”

City Council has already directed staff to bring forward a proposal for a wastewater study, Scott said, so staff is looking for grant sources to cover that cost.

“So, as we look at this, we can see that we have to stop the deficit from the water fund and we’re going to need to start looking seriously at future growth of our economy,” Scott said. “We’re just not in a city in a situation where we can expect our local population to pick up the difference. People haven’t got that kind of disposable income.”

Over the coming years, Scott said, the city needs to look at “building our economy and building our tax base,” because the current level of tax revenue cannot continue to cover the level of service the city wants to provide.

For example, this proposed budget has increased costs for the police and fire service contracts. The city will be allocating some one-time funding to cover it this year, including the last $850,000 of the city’s federal American Rescue Plan Act (ARPA) award. But the City will need to figure out how to fund those costs in coming years.

“We’ve got a revenue issue,” said Scott. “We’ve got to have strategies going forward.”

The city needs to be looking at commercial investments to bring more fees and sales tax revenue to Live Oak, Scott said: “We’ve got to build our economy. … Aggressively, we need to change our position in the world as a place to do business.”

He recommended that the City Council establish policies to guide what types of development and investment will be best for the city and ensure it is an attractive place to do business. “It may take us 10 years to make this happen,” said Scott, “but this needs to be the year you start.”

In order to ensure a balanced budget this fiscal year, Scott said that many significant capital projects were not included in the budget. “We’re not going to put what-ifs in there. … And frankly, if we hadn’t left that out, you’d be looking at a negative fund balance.” But Scott said that they always put very conservative estimates into the budget, and typically the expenditures won’t hit 100% of what was budgeted. So, there will likely be room to make amendments as the year progresses, once the Council has identified their priorities for additional spending.

Councilmember Woten thanked staff for their hard work on the report.

“It’s a very positive budget,” he said. “I think that it’s a great place to start and moving us forward from where we’ve been.”

Councilmember Chapdelaine said, “it’s really lean,” and he appreciates the effort to dial back on projects and expenses. 

The council voted unanimously to approve the budget for fiscal year 2024-2025.

There won’t be a meeting on July 3, so the next meeting of the Live Oak City Council is scheduled for 6 p.m. July 17 at 9955 Live Oak Blvd.