The Sunnyside City Council last night allowed the stormwater fund to run a negative balance - essentially bankrupting the account - and decided to start from scratch on a stormwater budget.
Those were the results of a heated special meeting Monday night that in essence stretched into a three-hour accounting shout down.
City staff proposed a budget amendment that would allow loaning up to $476,000 from the general fund to the stormwater fund to keep it afloat since council last month did away with what were perceived as unfair stormwater fees for business and industrial land owners.
The $476,000 figure is the original estimate of what it would cost to operate the city's stormwater program this year.
But with about 60 percent of the work for 2009 already completed in the first three months of the year, Public Works Director Jim Bridges said the amount needed will be much less. He said the city's infrastructure is much easier to maintain related to stormwater than initially thought.
The city is spending about $21,000 to $23,000 per month on its stormwater utility, about half of the original estimate.
City Manager Eric Swansen last night said the city had no way of knowing exactly how much would be needed this year when the 2009 budget was written last winter.
Swansen said the city will actually be able to reduce its stormwater staff by one person, transferring the employee to a vacancy in the water department.
With it apparent that $476,000 wouldn't be needed this year, council balked at allowing staff to borrow up to that amount from the general fund in 2009.
Council floated some options besides the $476,000 figure, such as authorizing up to $20,000 or so per month or reducing the $476,000 amount by half.
Finance Director Jordan Arreola shot down each attempt, noting that it would bring the city's stormwater fund out of balance on paper since the $476,000 official budget figure still exists. She suggested the city would receive a finding from the state auditor's office if council did not approve the $476,000 loan figure.
Councilwoman Theresa Hancock countered that she spoke with the auditor's office and was told the city would not be out of compliance for approving fewer funds based on the need for less expenditures.
Mayor pro tem Jim Restucci suggested borrowing the funds from the city's street account rather than the general fund. Swansen replied that the general fund subsidizes the street fund, so it would still be the same effect.
Arreola said the $476,000 loan would be just a move on paper to keep the books balanced, that staff wouldn't be using the entire amount for stormwater.
Hancock replied that it sounded like a "shell game" to her.
Council eventually settled on a motion to allow staff to borrow money from the general fund for the stormwater fund, but only enough to bring it up to a zero balance each month to meet expenditures.
Councilman Jesse Hernandez was still concerned, though, and got Arreola to admit that staff could still be able to spend up to the $476,000 amount.
A majority of council - Restucci, Mayor Paul Garcia, along with councilmen Bill Gant and Tom Gehlen - voted for the zero balance loan to the stormwater fund.
Hancock, Hernandez and Councilwoman Carol Stone voted against the move.
Despite a 4-3 vote in favor, the proposal did not pass because as a budget amendment it required five votes for approval.
Garcia said council has essentially allowed the city's books to get hit with an audit finding since it is not funding the stormwater utility.
The move means the city will have to essentially stop work on stormwater improvements as the fund will run dry in about 10 days.
Since council last month repealed the stormwater fees, those fees already collected will have to be refunded.
Sunnyside will essentially be without any stormwater money until a citizen committee is formed to come up with a new rate structure.
Before the committee is appointed, though, the city first needs to find out exactly how much money is needed to run the utility.
Garcia, with council's backing, asked Swansen to bring back an expense budget for the stormwater program that starts at zero and is tallied up from there, essentially starting from scratch, so council can see exactly how much money will be needed for the stormwater utility.