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Ongoing budget questions faced in Manzanita


During the June 5 meeting of the Manzanita City Council, former city manager Randy Kugler raised questions about how the city water fund is used to support the administrative payroll.

Reading from prepared remarks, Kugler shared concerns about the proposed city budget, which includes paying 50 percent of the salaries for the city manager and a proposed assistant city manager with revenue from the water fund. He read from a summary; a longer document detailing his concerns was provided to City Manager Cynthia Alamillo.

Having inspected the proposed budget for the coming fiscal year, Kugler emailed questions about the budget specifics to Alamillo prior to budget hearings. He said the response came after budget hearings were completed, and not all of his questions were answered. However, some of the answers left Kugler more concerned about how the budget is allocated.

Kugler said paying the city manager through the water fund is a perfectly acceptable overhead allocation if there is an objective measure of how responsibility translates to administrative time spent. He questioned the believability that the city manager and an assistant city manager would spend four hours of each workday directly managing city water operations.

“The examples given by the city manager justifying four hours of daily oversight of billing, construction projects and related issues including intergovernmental agreements lacks any basis in reality,” Kugler said. “Having been Manzanita city manager for eight years, a generous allocation of overhead funding from the water fund would be eight to 10 percent.”

Kugler said in a city that employs a full-time public works director with three full-time employees who are funded by water revenue, it would be problematic if the city manager and an additional assistant city manager needed to spend four hours a day administering water operations. He cited Oregon law and ethical standards regarding the negligent spending of public money, which carries personal civil liability.

“This council plans to request millions of dollars in additional property taxes in November and wishes citizens to believe that you have, and will continue to be, good stewards of our money,” Kugler said. “Perhaps the City has come to believe no one is watching, citizens do not care, or no one has asked the right questions. I am watching and am not persuaded that the answers are making any sense.”

Mayor Mike Scott responded to requests from the audience for further explanation of city water operations, saying the matter was discussed at length in three recent budget meetings, adding that the budget allocations had been in place for the past 11 years. An audience member who attended the budget hearings disputed that topic was discussed at length in those meetings.

It was explained that until 2001, the city manager’s salary was comprised of 75 percent funding from the general budget and 25 percent from the water budget. At that time, the city manager was spending a lot of time on the water system, and it was suggested that a 50-50 split would be a more appropriate representation of how administrative time was divided. Kugler later said that once the temporary situation had ended, the overhead allocation should have been reduced to its previous level. He also took issue with the explanation that the water utility is a business that would require a manager if it were not operated by the city.

Alamillo said she oversees the water department as well as the other departments of the city, and though she may not be in the field inspecting water operations, she is responsible for supervising major projects and making sure everything runs smoothly. She added that she oversees the billing staff as well, though she could not provide an hourly breakdown of how her time is spent.

“There might be sometimes when I don’t spend too much time on water because we don’t have big projects, or there are no issues in water, but that’s an ongoing thing,” Alamillo said.

As the meeting was ending, Councilor Steve Nuttall expressed his feelings about the discussion of the city manager’s salary composition. He said while he did not disagree with concerns about funding ratio for the position, there should be a process for reevaluating how administrative time is spent by staff members before any adjustments are made. Nuttall added that he made note of the need to examine the salary breakdown during the budget hearings.

Nuttall cited his professional experience in handling budget matters and said adjustments are not made arbitrarily without going through a process to identify time commitments from staff for each aspect of city operations. In defense of Alamillo, he said it would be unrealistic for a city manager with six months on the job to know exactly how much time is dedicated to each line item of the budget.

“I think people who’ve dealt with budgets in the past probably understand that,” Nuttall said. “There’s a process, and we’ll go through that process. And I really didn’t appreciate so much the attacks that I felt were foist upon the city manager and the public works director. It’s not their fault – we’re the responsible people and we’ll deal with it.”