Oak Harbor ratepayers may get relief
July 3, 2008 · Updated 12:30 PM
"A couple of bills that are still alive in the gridlocked state Legislature may translate into a healthy rate reduction for Oak Harbor utility customers.Right now there are parallel bills in the House and Senate, either of which would mean lots of money for Oak Harbor and other cities that lost state sales tax equilization funds when the voters passed Initiative 695 last November.The city lost around $780,000 a year, or about 10 percent of its budget, because the initiative capped the program's funding source, the unpopular and inflated Motor Vehicle Excise Tax, at $30.The City Council raised its utility rates by 7 percent last year to help offset the revenue loss. Because of a clause the council passed with the increase, though, any financial bail-out from the state must be used to lower the rate increase.Interim City Supervisor Doug Merriman, who doubles as the city finance director, said the House bill would mean about $300,000 for criminal justice and other specific programs in the city.The Senate version would mean about $390,000 in general fund money for the city. Merriman said the bill is aimed at making sure the cities don't lose more than 5 percent of their budgets because of I-695. While Merriman said it's encouraging that both the House and Senate are looking at helping the cities out, there are also still a lot of unknowns. He has no idea when the city may get the financial relief or if it will be a one-time bailout or a recurring program.Any money from the state must go straight back to the rate payers. When the City Council passed the 7 percent rate early this year, which raises about $400,000 a year, they added a condition that any financial relief from the state would be used to decrease the tax.Under another self-imposed condition, the rate increase automatically ends at the end of the year unless it goes on the November ballot and is passed by the voters. If the rate increase ends, the city can keep the state money for its general fund budget.But even with money from the state, the city may still have cuts to make.Last week, the City Council passed the final budget adjustments needed to balance the budget for this year. To get to that point, over the last four months the city raised the utility rates, nearly killed the city summer recreation program, eliminated firefighter positions and cut $100,000 worth of overtime from the police department.There are even more cuts to come next year since the city won't get the fourth-quarter MVET money that helped the city survive this year.Merriman said the city administration has started reorganizing some city positions in order to increase efficiency and save money. For example, Economic Development Coordinator Krista Janes-Blackburn has moved upstairs to become Mayor Patty Cohen's administrative assistant while still performing performing economic development work.By wearing the hats of both the finance director and the city supervisor - without a salary increase - Merriman is also saving the city about $7,500 a month. He took over the supervisor position after Cohen fired former Supervisor E.T. Silvers earlier this year. The future of his position, Merriman said, hasn't been decided.The City Council and city administration is set to hold a workshop on the year 2001-2003 budget on May 9. They are also likely to discuss it at a City Council retreat planned for April 27 and 28 at the Captain Whidbey Inn."