With revenue steady, city to hold budget

With revenue holding steady from a year ago, so will the expense budget for the city of Hillsboro in 2012.

That means essentially no mill-levy increase for the coming year, according to City Admini?strator Larry Paine.

?We?re generally going to be in the same mill levy neighborhood that we are for the 2011 budget, which is around 41.7 mills,? he said.

Paine said he is making final tweaks to his most recent draft of the budget following another work session with city council members last week.

?Right now, 45.685 is my current adjustment point (for the mill levy), and we?re going to get back to the 41.786 neighborhood,? he said. ?I?m not going to get there exactly, but it?s going to be pretty darn close.?

Holding firm on the mill levy takes into account the council?s request for the first pay increase for employees in three years. The salary line for staff will increase by 2 percent next year?about $30,000.

?It won?t be a cost of living increase, it will be adjustments on the merit side,? he said. ?(Council members) wanted to say that those folks who have been really working hard...will be rewarded, and those that are not generally working real hard by comparison won?t be awarded as much.

?That?s not saying they?re bad employees, that they?re not doing their job,? he added. ?But it is saying that their level of effort is less than others, and we want to recognize the level of effort that?s positive as opposed to not.?

Paine said dividing the salary pie based on merit will be a management challenge.

?From my perspective, to be able to justify (decisions) at the end of the day to the council without having an employee revolution will be a tribute to the ability to deal with things diplomatically,? he said.

Status quo

 

Beyond the salary increase, the city?s budget for 2012 will maintain the status quo during these financially challenging times.

?The things that we?ve been doing in the past are the things we?ll be doing in the future,? he said. ?The level of work we?re doing in maintenance is never enough, but we?ve changed the approach over the last five years, from minimal attention to where we?re doing what we can with every bit of dollars we?ve got there.?

Paine credited his department supervisors for managing their work with an eye on the bottom line.

?Basically, the budget preparations the departments have given me this year recognize there?s not an awful lot (of funds) to play with,? he said.

?I didn?t have to do an awful lot of cutting and slashing to start out with. The expectations were around what existing budget have been in the past.?

Paine said the things department supervisors are asking for is equipment they feel is necessary for them to do their jobs better.

?One of the biggest elements of that need comes in the street department, where there are very expensive pieces of equipment that are needed for the work that they do,? Paine cited as an example.

?I can see it, but on the other hand, we just don?t have the cash to do that.?

Paine said residents in 2012 will see the reconstruction of Adams Street from First Street to U.S. 56, as well as First Street itself, from Adams to Ash Street. But those projects will be paid for with bonds, not the city?s general budget.

Last year, the council eliminated employee salaries for the city?s museums. That will not change for 2012 because a clear plan for museum management into the future has not been developed yet, Paine said.

?If we put salaries back in there, that was roughly $50,000,? he said. ?At $16 per mill, that would be about 3 mills worth of expense just to replace that.?

?Steady? revenue a luxury

Paine said having steady revenue is a luxury not every city in Kansas is enjoying this year.

?Right now I?m thrilled because I?m watching my colleagues on Listserv talking about doing things that are more drastic in their budget this year than they did in the past,? he said.

City sales tax is up for Hillsboro, and property-tax delinquencies have not been as high as anticipated.

?What that?s telling me is that we have some awfully responsible property owners,? Paine said. ?It would be remiss on my part not to say thank-you for paying your taxes, because that is in fact how we pay for the services that we deal with.?

He said citizens may be surprised to know that sales tax supplies more revenue for the city than do property taxes. About $240,000 is generated through sales tax for the general fund and $201,000 more goes to pay for the aquatic center.

Added to that is about $220,000 from franchise taxes paid by outside utility companies that provide telephone, natural gas and electrical services.

Meanwhile, property taxes generate just under $500,000 a year.

The biggest revenue producer for the city are the utilities it owns. Paine said the electrical utility generates about $465,000 a year, water about $85,000, sewer about $52,000 and refuge almost $28,000, for a total of about $630,000.

Paine said if the city had to raise that much more revenue through property taxes, the rate would have to be raised 80 mills.

?That?s one of the challenges of doing a small-community budget, where you have two things happening,? he said. ?One is that people expect urban kinds of services?and how do you pay for them?

?Then, having these larger numbers of revenues transferred from the utility funds that help subsidize the property tax to keep it lower.

?There?s a lot of different ways to play that game,? Paine said in reference to a city?s revenue formula. ?This is just the one that Hillsboro does.?

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