Grace Kirchner Leader Correspondent
Clintonville’s interim city administrator says the city is in good enough financial shape to use some of its fund balance to balance its 2015 budget rather than cut staff or services.
Chuck Kell told the city Finance Committee on Tuesday that using $177,000 from the $1.7 million fund balance would prevent further budget cuts.
The latest budget proposal includes a total levy of $1.98 million and tax rate of $8.62 per $1,000 of equalized value, up from last year’s rate of $8.58 per $1,000 of equalized value. The owner of a home valued at $100,000 would pay $862 in city taxes under the proposal, compared to $858 this year.
The fund balance is money that has been levied over the years but not spent. It has been tapped in the past to balance the budget.
“This is an excellent fund balance,” Kell said. “Most communities carry a 25 percent fund balance and yours is 46 percent. You could take from the fund balance to balance the budget or make it up in cuts.”
Acting Mayor Jeannie Schley said without using the fund balance, the city would need to cut three employees.
“Using the fund balance may be short-sighted, but it may be the fiscally responsible thing to do for the citizens and the employees,” Alderman Greg Rose said. “This is a one-time budget and has to be looked at as a whole. … It could straighten out a lot of problems.”
Several aldermen spoke against tapping the fund balance.
“You’re not balancing the budget,” John Wilson said. “You are taking from savings.”
“You have to look at salaries and positions,” Bill Zeinert said. “You cannot run a structural deficit as a city or we will be back next year. It is time to get serious. Stop talking about flowers.”
Cuts that have been discussed include eliminating the city flower baskets, cutting or eliminating pay for council members, closing the outdoor pool, eliminating a squad car, asking the Clintonville School District to pay a larger percentage of the liaison officers, not plowing streets until there is more than 2 to 3 inches of snow, and reducing the city’s share of health insurance expenses. There might be no cost of living raises for the employees.
“I’ve been involved in some of the same kind of problems and it took staff cuts, salary and benefits,” Kell said at the Oct. 21 committee meeting. “I don’t see a lot of staff here. It is going to be difficult.”
The city lost $89,000 in shared revenue this year because it had exceeded the state-imposed expense restraint cap, Kell said.
General fund expenditures are estimated at $3.74 million in the latest 2015 budget plan. To receive the “expenditure restraint” payment of about $89,000 from the state, the city would need to cut an additional $8,884.
Also contributing to the city’s problems is a projected increase in health insurance costs.
“With health insurance changes with Obamacare and the makeup of the group being insured, the costs are going up over 30 percent,” said Mark Doornink, chairman of the Finance Committee, at last week’s meeting.
Police Capt. Jim Beggs urged the city Tuesday not to implement proposed changes in the health insurance plan that could cost the 44 employees $2,000 a year. Premiums are projected to increase 27 percent.
Kell said officials were still evaluating the insurance plan.
A public hearing on the proposed buget will be held Nov. 18. The council is expected to approve the budget Nov. 25.