By Lucy Perry
Mayor Duke Bennett assured the The Terre Haute City Council during the meeting last night that the 2016 budget is fundable and balanced. In fact, it exceeds the council’s recent requests for additional reductions and no longer includes the proposed trash service user fee.
"I really appreciate everybody's efforts here to make this a very fundable budget. It's a balanced general fund; and the bottom line on all the funds you're approving here have a $5.5 million revenue over expenses for all the funds you're approving," Bennett said.
After Bennett explained the latest changes to the council, and accountant Gary Malone of Umbaugh & Associates answered questions about the comprehensive financial plan, the council approved the $91.6 million budget with a 5-3 vote.
“When we gave you the original budget, before we had our two meetings to discuss -- from that time, until last week’s meeting -- we brought you updated financial documents related to the budget. We had cut $1.27 million out of a variety of different funds” Bennett said. “Since last Thursday, then what you have there on the two -sheet piece of paper, are the additional, specific detailed cuts for the additional $800-plus-thousand.”
The five council members voting in favor included: Norm Loudermilk, Amy Auler, Jim Chalos, Bob All and George Azar. Council members opposed: Todd Nation, Neil Garrison and John Mullican. Councilman Don Morris was not present.
The three council members voting against the proposed budget all said they weren’t given sufficient time to review the last minute changes submitted yesterday afternoon. Garrison made it immediately known he would not vote in favor of passing it. He added that he found issue with costs for 9-1-1 service not specified on the budget.
Garrison and Nation both stated they didn’t believe the city can afford the budget, noting earlier in the meeting that they had problems in particular with the appropriations for police and fire salaries, which were approved just before the council considered the overall budget.
“I’m not comfortable amending the budget, I’m not comfortable voting on the budget, I’m not comfortable with any of this,” Nation said, adding that he felt the new information was given to the council on short notice.
Mullican agreed with Nation and Garrison, saying it was “frustrating” to get the report handed to them at the last minute.
Loudermilk and Azar both pointed out that additional reductions were made by administration as the council had previously asked.
“I’m a little confused because we wanted the cuts, we got the cuts. We want revenue, but we’re not going to vote for revenue,” Azar said.
Councilman Jim Chalos joked that he was glad the city was saved from "the brink of disaster," and the mayor replied that was a recent exaggerated allegation made by a local newspaper regarding the city's financial situation.
Audience member and city council candidate Earl Elliott questioned the budget prior to the vote, calling the latest numbers "suspect." Another audience member, Pat Goodwin, also spoke out against it.
Now that the city council made it over the budget hurdle, it still needs to keep new revenue sources in mind.
Malone suggests the council seek out those additional sources soon. Possibilities include a trash user fee, additional taxes in partnering with county council or creating public safety alliances or a storm water utility. Currently, he said because of increased property tax caps, the city only collects about 68 cents -per -dollar levied in property taxes.
“It is a significant factor you need to think about,” Malone said, noting circuit breaker taxes are putting much stress on the city budget. “There’s going to be a point you’re going to have to consider other revenue sources, and that’s not unlike other cities.”
In other business:
The council approved the following ordinances:
By Lucy Perry
After a series of budget hearings, Mayor Duke Bennett is optimistic as the Terre Haute City Council is set to vote on the 2016 budget next week during the regular meeting.
“The cuts we’ve made going into those meetings, get us to the point where we don’t have a deficit with all of our funds,” Bennett explained to the council at last night’s Sunshine Meeting. He noted that there are some funds that will have a negative balance to them for planning purposes.
He suggests the possibility of creating additional revenue for the city by implementing a trash user fee for residents, in which households could expect an approximately $10 bill each month.
“We have cut to the bone as far as we could go in all these general fund areas,” Bennett said.
Reportedly, contractual services, such as those for a 12-year trash service and miscellaneous legal fees hit the budget hard each year.
“As we know, we started this year with a $5.5 million dollar deficit. So we’ve got to deal with that, obviously,”Bennett said, explaining that with a new revenue source of $2 million- from charging the possible trash fee--the balance would be positive for next year at $1,751,436.
He added that other options can be considered as well to fill the gap.
Councilman Norm Loudermilk suggested asking union officials to consider delaying contracts for one-year.
“They’d rather have their contract delayed by one year, than to have potential layoffs or loss of employees” Loudermilk said. He also said he’d like for the city redevelopment commission to submit a budget report publicly.
Councilman Todd Nation said cutting overtime hours for city employees and limiting contractual services could bridge the gap. Another suggestion was to work with Vigo County government to implement additional sales tax.
Bennett presented a revised budget to the council members to consider, saying the 2016 general fund balance is expected “to be in the black.”
Total 2016 budget equals $93,766,008, with $88,141,523 disbursements and a variance of $5,624,485. One page of the mayor's two-page report included information on “the most stressed fund,” the general fund -- with assumption of $32, 915,851 total revenue. Total expenses in the general fund are projected at $35,814,425.
One page of the budget summary Bennett handed out to the council members to reveiw covers operating funds, summarizing total controlled funds revenue of $59,449,008 for 2016 and disbursements of $57,091, 822 with a variance of $2,357,186. This is a snapshot of money for the general fund, motor vehicle highway, local road and street, parks and recreation, cemetery, transit, cumulative capital improvement, cumulative capital development income tax, fire pension and police pension.
Other funds -- for Rea Park non-reverting, engineering non reverting, fire training non -reverting, wastewater utility, EMS non-reverting, fire non-reverting, HAZMAT non-reverting and parks non-reverting-- is projected at $34,317,000 with expected disbursements of $31, 049,701. The variance is $3,267,299.
“We have no choice but to find additional revenue to fill in some of the $9.9 million we lose per year because of the property tax caps. We’re going to have to find another piece of revenue soon to deal with the general fund issues,” Bennett said.
Council members present at the meeting included Loudermilk, Nation, Amy Auler, Bob All, Neil Garrison, George Azar and President John Mullican. Councilmen Don Morris and Jim Chalos were not present.
Mullican announced his resignation from the city council and will also be withdrawing his name from the city election ballot in November, because he is reportedly moving out of state.