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In a bit of financial legerdemain the West Wendover city council passed an ordinance that allows the city to charge itself about a quarter of a million dollars a year for the city’s used of its own water and sewer line right of way.
“Water rates won’t go up because of this,” explained City Clerk Anna Bartlome. “What it does is that it permits the city to charge the water and sewer enterprise fund the use of its right of way.”
According to Bartlome this year alone the ordinance will generate $215,000 from the enterprise fund that will be transferred to the city’s general fund.
The charging one fund to pay into the general city coffers will help alleviate West wendover “massive” budget deficit at least this year.
Hit by a combination of over building, the Great Recession and an ‘unexpected’ 10 percent drop in population West Wendover is facing a sea of red ink, that must be drained before the start of the next fiscal year and cannot be fixed by printing more money.
“By law we have to balance our budget,” said Mayor Donnie Andersen. “And we have to work together to do it.”
At the heart of the city’s fiscal woes is the mortgage payments on the new city hall.
Originally slated to cost $5.5 million when first proposed four years ago the building was let out to bid for $7.5 million last year and since then additional cost is pushing the total cost of the project to the $8 million mark and perhaps beyond it.
But as the cost of the project increase the revenues projected to pay off the building loans either fell or were not realized at all.
With the onset of national recession two years ago, an estimated steady long term increase in tax revenue looks at least overly optimistic.
According to projections the General Fund revenue growth was expected to generally increase for the next 11 years.
In addition to those fiscal woes the city was hit with even more bad news this month when the US census reported that there are now 4,410 people in Wendover a drop of 6.6 percent from the 4,721 counted in 2000 and more importantly a drop of more than 10 percent from its estimated population of a bout 5,000 from the state demographers office.
West Wendover share in a number of state funds is either directly or indirectly determined on a per capita basis. Fewer people mean fewer dollars and the city is already strapped for cash.
In other words the hole West Wendover dug itself got a lot deeper.
While past commitment cannot be forgotten or forgiven the only options the city may have to balance its budget are to either to cut the pay of all its employees, layoff some of its employees, or raise taxes.
West Wendover has one of the largest staff and the biggest payroll of cities its size in the state.
West Wendover city workers make about the same as their counterparts in Elko.
The base salary of West Wendover City manager Chris Melville is less than $2,000 from being six figures and when benefits are taken into account, West Wendover has almost a dozen employees making in excess of $100,000.. The top three salaries paid in the West Wendover Police Department total about $400,000 in wages and benefits a year.
The West Wendover city employees union reportedly rejected a ten percent across the board pay cut proposed by the city administration to a plug massive deficit in the city’s budget informed sources told the Advocate two weeks ago.
No matter where the hike is implemented it will hit the fragile Wendover casino industry, including the city largest tax payer, the Peppermill.
Like the rest of the Nevada gaming industry Wendover was devastated by the recession and while the rest of the nation begins an albeit feeble recovery gaming is still struggling.
Any new tax even one on consumption such as gasoline is sure not to be welcomed by the industry which has already cut expenditures to the bone.
A new consumption tax may also not be effective with Wendover, Utah across the border. If say a new gas tax pushes the price of a gallon above what could be had a block away in Utah most drivers could make a run for the border.
The only tax sure to increase city coffers would be a property tax hike. West Wendover has not increased its share of ad valorem in ten years but the expected opposition from the gaming industry and the populace at large could make that move just as unpalatable as a salary cut.
But while the charge to the water and sewer fund will help this year, the robbing Peter to pay Paul concept could be felt in water rate payers for sometime to come. The water and sewer fund cash was supposed to be reserved for spending on updating and expanding the city’s water system.
With about a quarter of a million less every year the current rate charged to consumers may not be enough to keep the taps running sometime in the future.
“This ordinance won’t effect water rates,” Bartlome insisted. “But rates have gone up every year I have been here and they probably will this year too.”