Council financial issues may cost 2 members their seats

Budget decisions possibly cost two members their seats in the Nov. 6 election.

Still, city officials said they met their established goal to address the city's financial woes head-on with a balanced budget instead of simply depleting reserve funds year after year on the thin hope of an economic turnaround.

Vice Mayor Jeff Cobb said Tuesday the City Council met the city's goal to end the year with black ink instead of red.

"It looks like we will be ending 2012 with a surplus," Cobb said.

Although an official audit of the 2011-12 budget will not be presented to the council until early 2013, Cobb said Tuesday the city anticipates ending $62,000 to the good.

City Manager Steve Holsinger said city expenses increased over the past decade by more than 60 percent, particularly in employee pension and health benefits costs, forcing the council to take drastic action the past few years.

The council faced a budget deficit of $200,000 at the beginning of the 2011-12 budget, which was whittled down by freezing a police positions, continuing the voluntary work furloughs of the previous year and by employees taking advantage of the city's early retirement buy-out package.

The council also chose not to renew the employment of police Chief Bill Spears when his contract expires at the end of the year, which will save about $86,000 in the 2012-2013 budget, officials said.

Holsinger said the council's goal was not only to balance the budget but begin restoring reserves that will put the city in a better position as it maneuvers through another year in a tough economy.

A considerable difference in next year's budget, however, will be the addition of the additional revenue from the increase in the transient occupancy tax on hotel rooms, which voters approved on Nov. 6.

On Tuesday, the council passed an ordinance to officially increase the transient occupancy tax on hotel rooms from 10 percent to 12 percent.

Finance Director Tim Sailsbery said he anticipates the increase will bring about $80,000 more into city coffers next year.

The tax will take effect in 60 days and hotel owners in Willows will be notified to begin collecting the increased amount.

The increase is about $1.20 per night on a $60 room, officials said.

When three newly elected council members take their place on the dais next to Cobb and Terry Taylor-Vodden, Holsinger said the council will begin pouring over the current year budget before the mid year budget review in February.

Larry Mello and Larry Domenighini will be sworn in on Nov. 27. Spears will be sworn in after the first of the year.

"It will be up to them if they want to continue the same goal or adopt new goals of their own," Holsinger said.