Little to no discussion has occurred between the council and mayor concerning the proposed budget that has been drawn up by Mayor Gene Zick. A first reading was held last week. The second reading of the proposed budget is to occur Thursday as well.
Zick said he is required by statute to submit a proposal for consideration by the council then it is up to them on what they do with it. “If they don’t pass one, the city will operate on the old budget until they come up with one,” said Zick.
Several months ago it was noted on more than one occasion by Zick and city clerk Bob Riggs that a $280,000 shortfall was almost sure to occur in the 2010-2011 budgeted year unless either additional revenues could be found or more trimming done to balance out the financial downfall. Zick has stayed steadfast to the opinion that there wasn’t much to trim; however, members of his council have disagreed despite their silence in open session.
This year Zick scheduled budget workshops that were different than had been done in the past, calling special sessions to have each department head present its needs to the council. According to Zick, there was barely any discussion.
Zick’s proposal includes cutting six non-profit organization's funding including Good Samaritan, Russellville Arts Commission, Mayor’s Youth Council, Special Olympics, St. Vincent DePaul and the Humane Society. This would save the city $17,273.
Other cuts Zick has made in his proposed budget include cutting two full-time positions and one part-time position at the street department, one full-time position at the Inflow and Infiltration (I&I) department and one co-op position which is filled by students. It is estimated that one full-time position with benefits costs $40,000. With these calculations the savings from those cuts comes to $140,000.
There will be an increase by one in the police department due to the Justice COPS grant, while overtime will be cut in the fire department.
Employees are to receive a 2.0 percent cost of living raise in the proposed budget. Zick said is has been a few years since the employees have received any type of raise and he feels they are due. They will not; however, receive a merit raise.
Zick said he has seen where the city’s occupational tax revenue could generate more than he had first thought.
“I have been inquiring about employee retention and increase from businesses and industry in Russellville and have been hearing good things,” said Zick who believes and is banking on the rise of the economy to help save the city financially. In his budget message Zick says occupational tax revenues are increased by $44,402.
According to Zick’s numbers, expected revenues for the General Fund are $5,748,613. This includes the Rockwell grant.
“Each department’s budget has been reviewed several times and the assigned council persons were given the opportunity to be involved early on in the budget process and preparation,” said Zick in his budget message.
One of the revenue builders Zick had wanted from his council was to put back on the insurance tax to health and life insurance premiums within the city limits. This generated $100,000 before the council voted to take it off last year. Zick’s request was not granted by the council nor was his request to pass on all or a portion of the 13 percent increase the city was hit with by the Logan Todd Regional Water Commission in March.
Even though the tax on health and life was not going to be a reality, the tax on other insurance premiums will generate $433,242 for the fiscal year 2010-2011.
The city has $644,745 in debt payments for the general fund for the 2010-2011 fiscal year. They include a 1997, 2004 and 2006 Carpenter Center Bond payment totaling $225,532; a 2006 service center payment for $25,114; a 2006 general fund projects payment for $44,858; a 2008 fire truck payment of $51,155; a 2008 old hospital payment of $156,000; a 2009 Herndon Road payment of $29,179 and a $112,907 payment for a general fund project.
Debt payments for water and sewer include: a 1991 USDA 68/80 bond payment of $8,726; a 1998 sewer bond payment of $427,987; a 1998 Lewisburg Bank loan of $5,338; a 2006 water meter lease payment of $86,862; a water meter payment of $44,858; a 2006 water/sewer project payment of $51,580; a 1992 KIA Spa Lake loan payment of $97,677, and a 2007 Manshart payment of $51,943 for a total of $774,971.
Zick says medical insurance cost for city employees are predicted to increase to $505,797 and they will be looking at alternatives to minimize any increase to the employees.
Revenues for the water and sewer operations are estimated at $4,472,879 including the Rockwell grant. Zick says the decrease is due in part to not passing the Logan Todd Regional Water Commission rate increase and not taking a COLA increase even though recommended by the federal and state governments along with the Moody Bonding Company.
“We are taking a very conservative approach on these revenues because we believe conservation on the part of the public will continue to impact usage,” said Zick who is concerned about the age of the system and continued water loss. “The lack of capital may well impact the replacement of old galvanized lines in the south eastern section of the city,” said Zick.
According to the Zick’s proposed 2010-2011 budget the following are the anticipated appropriations:
Administrative- $727,097
Police- $1,542,873-$71,016 incentive
Fire- $759,028-$41,208 incentive
Streets- $457,073-$130,942 Municipal Road Aid and LGEAF
City Parks- $391,463
Service Center- $119,997
Civic interests- $404,206-$4,800 Municipal Road Aid and LGEAF
Recreational park- $57,842
Water- $2,297,987
Sewer/I&I- $1,774,892
Carpenter Center- $584,452
There are also numerous projects involving grant monies.
The following are anticipated revenues for the 2010-2011 budget:
Property taxes- $998,229
Fines and Forfeitures- $3,548
Occupational Taxes- $2,520,389- $417,135 Carpenter Center Fund
Insurance Premium fee/tax- $433,242
Governmental Revenues/Transfers- $21,864- $135,742 Municipal Road Aid and LGEAF and $112,224 incentive
Code Enforcement- $1,271
Interest- $2,100
Charges for services- $252,159
Alcohol License Fee- $177,171
Previous year carryover- $11,041
Franchise Taxes- $61,682
Note Proceeds/Sale of Asset Proc- $190,000
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