The Smithville Aldermen Monday night adopted on first reading an $8.2 million dollar budget ordinance for the 2012-13 fiscal year which includes cost of living pay raises for employees, larger pay hikes for the police chief, secretary-treasurer, and airport manager, the creation of one new full-time fire department administrator position, addition of a part-time court officer position for the police department to relieve overtime, and funding for a new fire department ladder truck. A new eight step wage scale would also be established for employees in the police department, while all other city employees would remain under the current four step wage scale
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The budget ordinance passed on a 4 to 1 vote. Alderman Steve White voted no saying he wanted more time to study the budget. Second and final reading will be scheduled following a public hearing at the next meeting on Monday, June 18 at 7:00 p.m. at city hall.
Prior to the vote, Mayor Taft Hendrixson asked that action be delayed until another workshop could be held to address the new spending, which will require an appropriation of $975,233 from the surplus to the general fund, just to balance the budget without a property tax increase. Mayor Hendrixson pointed out that while $646,000 of the $975,233 to be taken from the surplus is going to pay for the ladder truck and the local grant match for an airport runway and apron overlay (paving) project, the city will be using $329,233 of the surplus to fund recurring expenses, and that, he said is a concern. "If we spend everything in this budget, it's coming out of reserve, or there is another alternative, raise taxes and I don't think anyone wants to do that. I certainly don't. Normally we don't spend everything that's in the budget, but its in there, and we might. I don't know. I hope not. But its not prudent business to take out of your savings account (surplus/reserve) and do daily spending," said Mayor Hendrixson.
Alderman Shawn Jacobs said he felt comfortable going ahead and approving this spending plan, since budgets in the past have projected red ink and actually ended up in the black, due to sound financial management practices during the fiscal year. "This board, especially you (Mayor) and Hunter (Hendrixson) have done a tremendous job in holding the line on spending and it seems that you always return money to our surplus account so because of that I am comfortable with showing a deficit because I don't think we will spend it and if we do we can certainly address it next year," said Alderman Jacobs.
According to the budget, the city's general fund ended the 2011 fiscal year on June 30th last year at $221,830 (actual) to the good and was $579,593 (actual) in the black by the end of the 2010 fiscal year on June 30th two years ago.
"What's happening now is our spending is going up and our revenues are not," said Mayor Hendrixson. "We're probably not going to add anything to the reserve this year," he said.
Janice Plemmons-Jackson, the city's financial advisor added, "sales taxes and property taxes have been fairly constant for the last few years but they have not been increasing so revenues have been fairly stable. You're probably going to end up (the 2013 fiscal year) with a deficit because of the fire truck payment," she said.
Alderman Gayla Hendrix asked how much money the city has in the reserve account.
Hunter Hendrixson, Secretary-Treasurer, said "the general fund, in our checking account today, and it has stayed roughly the same for the last several months, I think its around $3.5 million dollars and then we have $400,000 in cd's for the general fund," he said.
If the city discovers later in the year that changes need to be made in the budget, Alderman Hendrix said amendments can be adopted. "We can make amendments to the budget after its passed. If we get six months down the road and realize we have made a huge error we can come back and make amendments," she said.
Alderman Jacobs agreed, saying cuts could be made later if necessary. "I would prefer to go ahead and pass it as it is and make cuts later on in the year if we have to. We're certainly going to try and hold the line on spending the best we can. There are a lot of improvements in this budget that I think we can be proud of. I am very proud of this budget. I think it is a very good budget," he said.
"Even though it (spending) is a little higher than usual, we are making some great improvements in this budget," said Alderman Hendrix. Some of these improvements won't have to be made again for many years to come because we're doing it now while we have the revenue to do it. Its nice to save every penny we make but its not nice to never make improvements," she said.
Under the budget, a new fire administrator position would be created. The salary is to be set at $35,000 plus benefits. No other full time fire department positions have been included in this budget, but others may be considered if a grant is obtained to fund them.
The budget also increases the salaries of three other department heads or managers as follows: Secretary-Treasurer: regular pay to be increased from $49,896 to $56,000 per year
Police Chief: regular pay to be increased from $48,204 to $55,000 per year
Airport Manager: regular pay to be increased from $29,818 to $35,000 per year
Each of these four positions, fire administrator, secretary-treasurer, police chief, and airport manager, like all other city employees are budgeted to receive a one percent bonus at Christmas time, and they receive a health insurance benefit equating to $7,905; along with an $85 life insurance and $276 dental insurance benefit, paid by the city.
All other city employees are to receive any step pay raises due them, plus a 3% cost of living increase, under this budget.
Step increases will be given on the hire anniversary date, rather than July 1 of each year, beginning with this budget.
New employees will receive the full amount of the starting pay for their positions when put to work, instead of their pay being increased after a sixty day probationary period.
A part-time court officer to work twenty hours is to be added to the police department, with overtime reduced for the other officers by approximately 52 hours per officer.
The aldermen are also seeking to adopt an eight step wage scale for just the police department, upon the recommendation of Police Chief Randy Caplinger. Currently, all city employees are set up on a four step scale. Employees with up to four years of service get their automatic step pay increases as defined in the wage scale plus a yearly cost of living increase, as approved by the aldermen. City employees with more than four years of service, who have topped out on the wage scale only get the cost of living increase.
Chief Caplinger has compared what Smithville pays its officers with law enforcement agencies in surrounding towns and found that the city is falling behind. Smithville has lost officers in recent years to departments in other cities for better pay, and Chief Caplinger is concerned that his department may lose more personnel, unless the city keeps wages competitive.
Chief Caplinger has proposed a new wage scale for Smithville police officers, which would have them top out after eight years, rather than four years in the city's current wage scale. Chief Caplinger said he came up with a plan for his department, after surveying other towns, averaging the starting and top out pay for each position in their police departments and using that as a model "I took each city's starting salary and their top out salary (for each position of rank in the department) and I combined those together, including ours. That gave me an average starting pay and an average top out. I just took it from the middle, kept our starting pay the same, and then took the difference from that starting salary and the averaged middle and put it in an eight step between that," said Chief Caplinger. "It doesn't make us the highest paid but it doesn't make us the lowest, we're just in the middle of our surrounding area. It puts us comparable with our competition around and gives an incentive for the officers to stay," he said.
The city budget will not be drastically impacted, according to Caplinger because the raises are spread out over eight years instead of four. "It really didn't hurt the budget of the city because the raises were basically the same, it just extended it out further but gave a higher top out, which is an incentive to keep employees. Nobody is getting a big raise. In fact, a couple of officers may be getting a little less raise (under the new plan) than they would otherwise have received July 1 (under the current wage scale)," said Chief Caplinger
The proposed new eight step wage chart for the police department (including a 3% cost of living increase) this year is as follows (hourly rate) and (Annual Pay-No Overtime)
$13.88 (Step1)- $28,879
$14.98 (Step2)- $31,150
$16.07 (Step3)- $33,421
$17.16 (Step4)- $35,692
$18.27 (Step5)- $38,006
$19.36 (Step6)- $40,277
$20.46 (Step7)- $42,548
$21.63 (Step8)- $44,990
$15.30 (Step1)- $31,814
$16.71 (Step2)- $34,749
$18.12 (Step3)- $37,684
$19.53 (Step4)- $40,619
$20.94 (Step5)- $43,554
$22.35 (Step6)- $46,490
$23.76 (Step7)- $49,425
$25.17 (Step8)- $52,360
$21.83 (Step2)- $45,397
$23.24 (Step3)- $48,332
$26.06 (Step5)- $54,202
$27.47 (Step6)- $57,137
$28.88 (Step7)- $60,072
The proposed budget, totaling $8-million 297-thousand 195, calls for no increases in water or sewer rates or the property tax rate, of .6190 cents per one hundred dollars of assessed value. But in order to balance the budget, the city is appropriating to the general fund $975,233 from the surplus. The city property tax rate generates approximately $790,000 a year.
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 $2.00 per thousand gallons but will increase to $2.05 per thousand gallons beginning with January 1, 2013 sales.
Proposed capital outlay expenditures in the general fund for the new year come to $2,382,667.
Specific projects are as follows:
Parks and Recreation:
$5,000 for a fence
Public Works/Buildings and Grounds:
$15,000 for a trailer
City Hall Building:
$496,000 for ladder truck payments
$20,000 for a chipper truck
$20,000 for a vehicle
$15,000 for traffic lights
$25,000 for a police car
$1,666,667 for the runway and apron overlay (90% of that funded by grants with a 10% local match by the city)
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: $4,424,570
Special Revenue Fund-Sanitation: $283,000
Water & Sewer Fund: $2,378,000
Drug Fund: $7,050
Appropriation of Surplus- General Fund: $975,233
Appropriation of Surplus-Drug Fund: $11,750
Appropriation of Surplus-Water & Sewer Fund: $217,592
Total Revenues: $8,297, 195
General Fund: $5,399,803
Special Revenue Funds Sanitation: $282,927
Water & Sewer Fund: $2,595,592
Drug Fund: $18,800
Total expenditures: $8,297,195