City faces $450,000 budget shortfall

Story has been updated.

BONNERS FERRY — Due to an Idaho Supreme Court case ruling, Bonners Ferry officials said the city now has a general budget shortfall of approximately $450,000.

The general fund consists of the police department, the street department, the fire department and several other departments.

Hill-Vu Mobile Home Park and Ed Quinn versus the city of Pocatello, the case sought to recover money unlawfully collected by the city from users of the city water and sewer system. This case took place in 2017, but the city was not made aware until this past August, Bonners Ferry officials said.

City Councilman Ron Smith said at the Nov. 1 council meeting that the city of Bonners Ferry has used money collected from city utilities to fund the general budget since the 1950s.

Mayor Dick Staples said the budget shortfall was added to the council agenda for public knowledge. With that source of funding gone, the mayor added that the council and city residents now have to decide what to do this fiscal year and in the future.

Council and city staff said they have already tried to make cuts in the road and street department.

In order to make up the shortfall for this year, the council has agreed to look at selling off city assets in order to not directly impact taxpayers at this time. They have directed staff to look into selling a 13-acre parcel of land that the city owns near Moyie Springs between Eillien Road and the river.

Staples said they received a quote that the parcel could go for $275,000 to $325,000. Due to the zoning code, he said the parcel cannot be split into separate parcels.

Staples said the city could cut the shortfall by $80,000 by not opening the city pool next season. Reopening could cost more with inflation affecting the cost of providing the service. Historically, the pool has been free for city residents.

Councilwoman Valerie Thompson said the city is trying to continue to provide the current level of services or else they wouldn’t consider selling assets.

Councilman Brion Poston posed selling the city pool to the county as an option. He added that he’d hate to see the pool closed since it saves lives by providing swim lessons.

Smith said the last resort would be to cut any personnel.

“We can’t cut our way out of it. [If we try,] we won’t have anyone working here,” he said.

City Administrator Lisa Ailport said there are limited ways the city can raise revenue. Fees can be raised, but they must represent service provided and can’t pay another department. As an example, she said a raise in permit fees could not then fund the police department.

The city could look into a local option tax in order to have the cost spread across different payers, she said. This could include a tax on liquor per drink, on temporary occupancy rentals like hotels or any taxable goods under Idaho Code.

In 2021, the city of Ponderay passed a local option tax of 1% on any taxable goods up to $1,000.

Staples said it is up to city residents on whether a tax is to be approved.

“We [city council] make cuts, but for a tax, city residents have to vote for it,” he said.

A super majority of 66% is required to pass a tax.

The council asked for additional public input and for the formation of an advisory committee of city residents to brainstorm ways to find revenue, whether that be a tax or not.

Ailport reminded the public of her open door policy and that she would answer any questions.

The next Bonners Ferry city council meeting is Tuesday, Nov. 15 at 6 p.m.