Facing a possible deficit in the general fund of more than $344,000 by the end of 2013-14 fiscal year, the Smithville Aldermen Monday night voted 3 to 2 to adopt a new $7.8 million budget ordinance on first reading without any new paid full time firefighter positions.
Aldermen Tim Stribling, Jason Murphy, and Danny Washer voted for the budget. Aldermen Shawn Jacobs and Gayla Hendrix, who wanted to include funding for one new firefighter, voted against the budget. Second and final reading will follow a public hearing at the next meeting on Monday, June 17 at 7:00 p.m. at city hall.
(CLICK LINK TO PDF BELOW TO VIEW PROPOSED BUDGET AS ADOPTED ON FIRST READING MONDAY NIGHT)
fye 63014 budget.pdf (557.29 KB)
Two versions of the budget were presented to the aldermen for consideration Monday night. One of the proposed budgets included another full time firefighter at $41,000 (salary, payroll taxes, and insurance benefits). The other did not include the position.
According to the city's financial advisor, Janice Plemmons-Jackson, the proposal with the firefighter would have put the projected budget deficit by year's end at $385,000. Without the firefighter, Jackson said the anticipated deficit is $344,105. During the budget workshop with the mayor and aldermen last Tuesday night, Jackson had projected a break even budget or a slight deficit by June 30, 2014. But since then, she discovered an error in which she failed to account for expenses related to a mostly grant funded fuel farm project for the airport. " I have found a math error and made a correction so the numbers are worse in the general fund. We're now projecting a $344,000 deficit in current revenues to current expenses but if you do the additional firefighter it's about a $385,000 deficit," said Jackson.
What this means is that unless spending is held in check during the year, the city will have to appropriate $344,105 from the general fund surplus to balance the budget by June 30, 2014. Meanwhile, the proposed water and sewer fund is also showing a projected loss of $62,280 by the end of the fiscal year June 30, 2014. Funds to make up for the anticipated loss would have to be appropriated from the city's water and sewer fund surplus. City officials point out that the projected water and sewer fund deficit could be reduced or erased when it's known what new rates will be charged the DeKalb Utility District beginning January 1 under a new contract between the city and the DUD, which has not yet been negotiated or agreed upon.
The proposed budget includes a 1.5% pay raise for all city employees including salaried personnel. Some employees will also get step increases depending upon where they fall in the wage scale for their departments. The budget increases funding for the chamber of commerce from $5,000 to $10,000 and includes a total allocation of $5,000 to be divided among members of city boards and commissions, such as beer board, planning commission, etc. for attending those meetings.
During Monday night's meeting, Alderman Tim Stribling made a motion to adopt a new budget without another paid firefighter saying the city does not have a revenue source to fund it. "I would like to add a fire fighter, or two, three, four, five or however many. But it's got to have a funding source. It's a recurring expense every year. I just don't see where we're able to take one on at this time so I make a motion that we adopt the budget with no additional fire employee," he said. Alderman Jason Murphy seconded the motion.
Alderman Shawn Jacobs, who is also the city's police and fire commissioner, advocated making further budget cuts where possible to help fund another firefighter. " We are the only town our size anywhere in the area that doesn't have full time firefighters. At least partial full time firefighters. Baxter has several. Six or something like that. Tiny towns smaller than us have part time firefighters that are being paid. I think you can be a penny wise and a pound foolish. There's not all that much difference in the deficits (of the two proposed budgets). I just wish we could find somewhere to cut a little bit more to make them (proposed budgets) closer together," he said.
"Shawn, I'm sure those towns that do have full time fire departments are funded," replied Alderman Stribling. " They've got a way to fund it. We've got to have a way to fund this every year. You're basically going to have to find $40,000 in new taxes. I mean we've got the surplus to cover it but how many years do we have a surplus to cover it?," asked Alderman Stribling.
"I'm just advocating for the fire department because I'm the fire and police commissioner and it's my job to be their advocate and I think we need it," responded Alderman Jacobs.
"I agree with Shawn in this matter," said Alderman Gayla Hendrix. " We've had lengthy discussions in our budget workshops and I know we've gone through and trimmed a lot of the excess. But I think we are all aware there are always items budgeted that are not spent. Even with the way its trimmed there's a lot of places to cut. I think it boils down to the fact of what's more important to you. I hate that we're showing a deficit. It's better than last year. Better than the year before. We're making progress. But we've also made some major improvements to our community. We talk about needing more jobs and bringing in more jobs. These improvements to the airport are going to look favorable to industries. This ladder truck and at least one hired firefighter is going to look favorable to industry. The disaster that happened with Moog cost us jobs and cost us tax revenue. It hurts me to think that could ever happen again. I think the fire chief has explained to us that if we had two staff members that could be ready to respond immediately in the middle of the day or any time of the day to our factories, to our industries as well as people's homes, we could save a lot. It would reduce our ISO rating. I don't like to have to look at a deficit. But in the grand scheme of things I think this budget has a lot of places we could cut. This (another paid firefighter) is something I think is very much needed," said Alderman Hendrix.
While admitting there could be other places in the budget to cut, Mayor Jimmy Poss said the proposed budget is not bloated and that the city is going to have to keep a close eye on spending this year. "We're going to have to watch what we spend to make this thing work. Hopefully we don't have to buy a lot this year," he said.
Secretary-Treasurer Hunter Hendrixson said the major problem is that revenues have not kept up with expenses. " Revenues have stalled. We have found some other sources of revenue but we won't know what that will be until a year from now. We may say a year from now we're bringing in more in certain taxes to fund a fireman or that could fund this or that recurring. That's the thing, it's not just funding it for a year or two, it's got to fund it year after year. Of course, we all want to do this without raising property taxes I assume. I think that's where we're at on this budget. Expenditures tend to creep up and revenues are kind of flat lined right now," said Hendrixson.
The budget calls for no increase in the city property tax rate (.6490 cents per one hundred dollars of assessed value) and no increases in water or sewer rates.
Water customers will continue to pay $5.00 for the first one thousand gallons of water usage plus $5.00 for each additional one thousand gallons of usage. Outside city rates are $7.50 for the first one thousand gallons of water usage plus $7.50 for each additional one thousand gallons of usage.
The rate for city sewer customers, under the new budget, will continue to be $5.00 for the first one thousand gallons of usage plus $5.00 per thousand gallons thereafter. In addition, all sewer customers will continue to pay the $3.62 cent per month flat rate usage fee.
The rate the city charges the DeKalb Utility District for water is $2.05 per thousand gallons but will increase beginning with January 1, 2014 sales. The rate will be determined in a new contract between the city and the DUD, which has not yet been negotiated or agreed upon.
Proposed capital outlay expenditures in the general fund for the new year come to $ 2,070,670. This expense is due to mostly grant funded projects at the airport.
Specific projects are as follows:
$5,000 for computer upgrades and equipment
Parks and Recreation:
Public Works/Buildings and Grounds:
City Hall Building:
$20,000 for a chipper truck
$20,000 for a vehicle
$25,000 for a police car
Airport: (Mostly grant funded projects with local city match)
$1,516,670 for the runway and apron overlay
$347,000 for a fuel farm
$95,000 for PAPI Infrastructure
Proposed water and sewer fund Fixed Asset Additions: Automatic meter readers project- $410,000; Capital improvements-paint water tank- $80,000; Sewer plant improvement study & engineering fees- $18,000; Sewer plant updates- $250,000; Sewer rehabilitation camera- $125,000
Although these capital outlay projects are budgeted, they all may not be funded during the year.
The proposed budget breaks down as follows:
General Fund: $4,703,270
Special Revenue Fund-Sanitation: $263,330
Water & Sewer Fund: $2,424,500
Drug Fund: $10,025
Appropriation of Surplus- General Fund: $344,105
Appropriation of Surplus-Drug Fund: $5,225
Appropriation of Surplus-Water & Sewer Fund: $62,280
Total Revenues: $7,812,735
General Fund: $5,047,375
Special Revenue Funds Sanitation: $263,235
Water & Sewer Fund: $2,486,780
Drug Fund: $15,250
Surplus in Sanitation Fund:$95
Total Expenditures: $7,812,735