May 06, 2002 11:00 pm

By Ray Linker

Observer Staff Writer

The city staff's recommendation that a 5 percent fee be added to water bills did not sit well with some La Grande budget committee members as the group began deliberations on the 2002-03 budget Monday night.

City Manager Wes Hare told the committee it needed to add the fee to the water bills fairly soon and a similar fee to sewer charges sometime in the future if the city is to be able to tackle needed projects without issuing bonds.

Hare called the 5 percent charge a franchise fee, saying several other cities also have such a charge.

But several of the 14-member committee, which includes all seven city councilors, called the fee by other names.

Darin Larvik, saying that Ballot Measure 50 was passed to try to restrict increases in property taxes, said the principle of the fee was "an end run; I'm against it."

Committee member Vern Crouch called it "a double tax. In August, you'll see a lot of brown yards."

Councilor Art Rhodes added, "I'm against another tax on people right now. That's what it is. I don't think this is an appropriate time to put a 5 percent tax on people. I don't think people want another tax."

Councilor John Bozarth said he was "adamantly opposed."

"We've just added a $60,000 increase in building permit fees. We should be up front that there'll be an increase in water rates now and in sewer fees down the road," Bozarth said.

Councilor Steve Clements added, "I'm against it as a short-term, stop-gap measure."

Budget committee chairman Dan Stark said the fee represented "a significant policy change for the city."

Stark said the matter should have been addressed by the city council before the budget committee meetings started so that the budget committee would know it was a policy the council would accept.

Stark asked Hare, "Wouldn't it have been better for the council to have decided before the budget committee meetings?"

Hare, who disputed the suggestion the issue was an "end run," said the entire council served on the budget committee and that putting the fee into the proposed budget was a way for the public to hear about it.

"This is a good way to bring it to the public's attention. If the council feels this is an inappropriate fee, they can change it."

Hare said there was a considerable reserve in the sewer fund "and there shouldn't be a need for a 5 percent fee in the foreseeable future, but the water fund is a different story. We need to pass on the fee within six months."

He said the city had a $1 million reserve fund for future projects. It has been the city's practice to build up funds over several years so as not to have to depend on bonds (and the interest in their payoff) to get projects done.

Hare said the franchise fee "is one strategy to help maintain the health of the city's general fund. I don't consider it an end run. It's a very direct rate."

The manager said the choices are to impose the fee or make cuts in services.

Mayor Colleen Johnson, who brought about 25 of her Eastern Oregon University economic students to the meeting, said the committee's choice was to agree with the fee or make $160,000 in cuts to the budget.

"Closing the pool would make up the difference, but maybe we're not willing to make the cuts," said Johnson, a professor at Eastern.

Clements said, looking into the TV camera broadcasting the meeting, "People need to come here and tell us what types of services they want. Things are getting tighter and tighter."

Stark said, "Sometime down the road, we're going to have to face cuts — this year or the year after."

The committee will continue meeting at 6 p.m. at City Hall today and Wednesday and later if necessary to review and approve the $42.3 million budget.

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