Before the open portion of the meeting begins at 6 p.m. in the council chambers at Clearlake City Hall, 14050 Olympic Drive, the council will hold a closed session regarding property negotiations for 14071 Lakeshore Drive, where ABC Hair Salon wants to locate.
Among several fiscal matters on the Thursday agenda, City Administrator Dale Neiman is proposing that the council not adopt the 2010-11 budget until later in the year, after an audit of the city's finances for the current fiscal year is conducted and following adoption of a new state budget.
In his report to the council, Neiman suggests there are two reasons for the recommendation.
First, he said the city needs to know exactly how much money it will have at the beginning of the fiscal year, information he said they should have by the end of September.
Second, he suggests the state likely won't have a new budget before Oct. 1.
“We need to know exactly what the State will do to us before the budget is adopted,” he said in his report.
The council also will discuss approving a resolution for a loan from the taxable housing fund bond proceeds.
Neiman said the city made a payment of just over $1 million of its redevelopment funds to the state in accordance with a court ruling approved earlier this month.
To make that payment, the city had to borrow taxable bond proceeds from the housing fund, which was authorized by state legislation, he said.
However, the city must repay the project fund with interest by June 30, 2015, Neiman reported.
Borrowing proposal meant to help city pay bills
In order to keep Clearlake financially solvent, Neiman is taking to the council a set of resolutions to approve borrowing between the city's operational and special revenue funds.
On July 1, the city's revenue fund is projected to have just under $13,000, with the city's Proposition P sales tax fund for the police department and the development review fund together expected to have a negative balance of approximately $415,350, Neiman reported.
“The only way to cover the deficit is to borrow money from other funds,” he wrote.
The city can't borrow redevelopment agency housing funds – that would breach the terms of a lawsuit settlement agreement – nor can they borrow from the agency's tax-exempt bond proceeds without becoming financially insolvent, he said.
The only remaining option is borrowing from special revenue funds, which include gas tax, revolving loan funds for the HOME program, housing rehabilitation and economic development, as well as street revenues, with total funds available totaling just over $672,000.
That would leave the city with just over $256,760 to cover short-term cash deficits during the year. “This is not enough,” Neiman stated in his report.
He's suggesting selling off a HOME fund-owned property, which already is under way. The property is reportedly valued at $125,000.
Because of its tough financial situation, Neiman also is recommending to the council that the city terminate its participation in the county's marketing program.
The annual cost is $10,000, and Neiman suggests ending participation “to save money to help us remain financially viable,” with the request that the county end the agreement immediately and allow the city to pay the cost for the current year within two years.
Neiman proposes that the city participate in the program in the future when its finances improve.
In other business, the council will consider assessing administrative penalties on one nuisance abatement case and hold nuisance abatement hearings on seven other properties, including 15416 Brannon St., 14830 Cresta Ave., 3687 Cypress Ave., 3412 Grey Ave., 3476 Harrison St., 14890 Laguna Ave. and 14537 Palmer Ave.
The council also will consider adopting the draft housing element.
E-mail Elizabeth Larson at
How to resolve AdBlock issue? 
