Council approves midyear budget changes, moves Gilton franchise fees amid debate over new administrative charge

The Livingston City Council on Feb. 4 approved midyear adjustments to the fiscal‑year 2024‑25 budget and voted to move the franchise fee owed by Gilton Solid Waste back into the general fund to cover a budget gap.

City Finance Director Happy Baines told the council that the midyear package increases general‑fund expenditures by $281,007.05 and non‑general‑fund expenditures by $650,004.73, with uncommitted reserves proposed to cover additions. He said moving Gilton’s franchise fee to the general fund would increase general‑fund revenue by about $305,000.

The vote followed lengthy debate about two separate charges tied to the city’s new Gilton contract: a 15% franchise fee the city imposed on the hauler and a proposed administrative fee meant to reimburse staff time spent on refuse billing and related services.

Councilmember O’Paul and others pressed staff for detail on how the administrative fee was calculated and how long the sanitation (solid‑waste) fund could sustain the current city subsidy. Baines said the most recent estimate of the administrative fee would be roughly $588,000 annually — about $14.02 per account per month — but that estimate did not yet account for franchise‑fee revenue that the council voted to redirect earlier in the evening.

Councilmember U’Pal (Council recorded as Oppal/Upal during the meeting) urged a measured approach: move enough franchise‑fee receipts now to balance the current fiscal‑year shortfall and place the remainder into the sanitation fund. Council ultimately voted to move sufficient franchise‑fee receipts to cover the general‑fund gap and to place remaining franchise receipts into the solid‑waste fund; staff were directed to return with concrete options — including phased rate approaches — for approving an administrative fee going forward.

City Manager Christopher Lopez and Baines warned that continuing to underfund the sanitation fund would deplete reserves and force larger increases later. Baines told the council that if the city does not offset administrative costs the sanitation fund reserves could be exhausted in fiscal year 2025‑26 unless rates or other revenues change.

Councilmembers discussed several mitigation options: shift some administrative responsibilities to the hauler (which could raise contract costs), conduct a rate study, subsidize the fee from one‑time reserves while phasing in a smaller monthly charge, or require other operational changes. Staff said they would model phased increases (examples: $1–$2 per month steps) and present formal proposals at the next feasible meeting.

The council also approved a separate midyear action to add personnel and operating funds in several departments, including a temporary police sergeant position to cover patrol needs and funding for audits and planned capital improvements.

In the motion to move franchise‑fee receipts, council specified that the portion needed to balance this year’s general‑fund shortfall be transferred immediately and the remaining franchise revenue be set aside for solid‑waste costs. The council asked the finance department to return with a report on timing and exact dollar amounts to be transferred and with options for a phased administrative fee. Staff indicated the earliest feasible return date would be the second regular meeting in March if analysis and public notice timelines are met.

The council did not adopt an administrative fee on Feb. 4; instead it directed staff to prepare a clear revenue/expenditure comparison and present options for how a fee might be phased in to avoid a single large rate shock for customers.