TheDesertSun.com-DESERT HOT SPRINGS – The city’s general fund has dipped to $450, but leaders say they can make payroll through June 30 with incoming tax revenue and a contract prepayment from their waste hauler.
A sizable payment from property and sales and use tax — in the ballpark of $1 million — is due June 1, said Desert Hot Springs Councilman Scott Matas, and Desert Valley Disposal announced plans to prepay $150,000 of its $1 million contract with the city by the end of April to act as a cushion.
“We’re assisting the city with its fiscal emergency and at the same time protecting our investment in our contract,” said Bob Kuznik, the waste hauler’s special project coordinator. “We want to see the community develop and help with future
On March 18, the City Council approved an eight-year, $1 million contract extension with Desert Valley Disposal, but with a twist.
The hauler is forking over the $1 million for exclusive solid waste rights in the city and will annually reinvest $100,000 with an extra $10,000 added each year.
“The money will help us get through a time that’s pretty tough right now and be important in keeping the city afloat,” Matas said.
“Now we can move past budget talks with a safety net and with a new city manager coming in soon to take on the budget.”
Desert Valley Disposal’s contract, now good through 2029, provides for routine waste and recycling services, quarterly cleanups, litter abatement, school education, and document shredding events.
Additionally, demolition and building projects that enter Desert Hot Springs’ preferred waste hauler program and use Desert Valley Disposal for recycling and diversion will receive their waste permit at 2 percent of the project’s estimated value or $3,000 — whichever costs more.
Applicants must pay a $3,000 nonrefundable refiling fee to enter the preferred waste hauler program if they were previously admitted and failed to use Desert Valley Disposal as their hauler.
“For a business, if you have a long-term contract you can do advance planning, save money and tell your bank you have a long-term deal,” said Councilman Russell Betts. “Desert Valley Disposal got a heck of a deal, but it gave us stability.”
Kuznik said Desert Valley Disposal’s offer to prepay its investment payment will be made to Desert Hot Springs’ city manager in the next few days if it hasn’t been made already.
The remaining $850,000 of the hauler’s contract will be paid on June 30.
“I have no reason to suspect the city wouldn’t say, ‘Yes,’ today,” Kuznik said.
Desert Valley Disposal has operated in Desert Hot Springs since 1976, and Kuznik said company management began discussing how to help the city financially when City Council declared a fiscal emergency on Nov. 16, 2013.
Desert Hot Springs’ audited financials show a $3 million deficit in fiscal year 2013-14 and an ending general fund balance of $3.2 million, Amy Aguer, the city’s finance director, said at a meeting with The Desert Sun’s editorial board Tuesday.
That leaves $200,000 on June 30.
The city already has cut employee salaries 22 percent to 35 percent, cut police officers’ incentive pay and reduced staff by 56 percent.
There are 24 employees in City Hall and 41 budgeted police officers, Aguer said.
“So the good news was we covered payroll,” Aguer said. “The bad news was, as a finance person, that’s not OK if there’s an earthquake or some natural disaster. We should have more reserves.” Story Source>LINK
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