Faced with a shortfall of $377,000 in the countywide ambulance service fund, Iola officials targeted a series of potential transfers Monday night. THE SPECIAL meeting was called by Mayor Joel Wicoff to further discuss the city’s proposed 2015 budget, which incorporates a 6-mill increase. The Council is scheduled to finalize its 2015 spending plan following an Aug. 11 budget hearing. HENRY’S concerns of raising the city sales tax sparked a deeper discussion among council members. THE COUNCIL discussed other ways to shore up the city’s budget, including generating electricity in the winter to sell to Westar, a hiring freeze and “an honest discussion with department heads” about staffing numbers.
Council members gathered for a special budget meeting Monday but did not vote on any specific measure.
Instead, they asked City Administrator Carl Slaugh to bring each proposal to their regular meeting next Monday for a series of up-or-down votes.
Also on the table will be the option of returning EMS back to the county, a “conversation that’s not gonna be fun for anybody,” Councilman Jon Wells said.
That suggestion came from Councilman Steve French, who said that if Allen County does not agree to renegotiate its contract with the city, that Iola consider giving a six-month notice it was pulling out of the pact — essentially handing the service back over to the county.
“I hate to suggest that,” French said, “but that is an option.”
Also up in the air is a request from USD 257 to have a citywide vote on a proposed half-cent sales tax, with a portion of the proceeds helping pay for construction of a new elementary and high school. The proposal has raised the ire of merchants from around town, including Tim Henry, owner and president of Twin Motors Ford.
Henry addressed the council with his concerns about sales taxes and the overall state of the city’s financial affairs.
“When the buckets go dry, everybody goes back to the sales tax,” Henry said. “It puts small businesspeople not in line with neighboring towns.”
Council members have the language for the November referendum ready for their signature, but said they wanted to find out how much USD 257 taxpayers’ levies would increase to fund the project without sales tax revenues.
“We need to hear more from our constituents,” Beverly Franklin said.
“We need to hear from the school board,” French added.
“The last few years we’ve had a flat line with our taxes,” Wicoff said. “Five or six mills is very significant. There may be nothing we can do, but I want everyone to think about it.”
Wicoff anticipated the school district and Allen County also increasing property taxes to support their respective budgets. And if USD 257’s school bond issue passes in November, “this could amount to a pretty good increase. We need to put our heads together and think about taxation in general.”
The proposed mill levy increase would deal with shortfalls in EMS service in future years, City Administrator Carl Slaugh responded, because they would not take effect until the first of the year.
The explanation rubbed Councilman Bob Shaughnessy the wrong way, who noted the higher tax would essentially mean Iolans are unfairly subsidizing a county service.
“The people of Iola have already paid their fair share,” Franklin agreed.
The city has requested Allen County release about $190,000 from its EMS fund reserves to help make up the shortfall. County commissioners decided a week ago to wait until October to decide.
“The challenge then is by waiting, we lose the opportunity to at least consider using sales or property taxes to make up the deficit,” Slaugh noted.
In response, Wells suggested the city make up the shortfall by using reserves from its general fund ($79,000), gas ($165,000) and wastewater ($50,000) budgets, while instituting a $5 surcharge on all electric customers, which if enacted by Sept. 1, would raise another $70,000 or so. “That brings us pretty close.”
Slaugh suggested the council consider using reserves from the electric fund instead of the wastewater fund because it could more easily withstand such a hefty transfer.
Wicoff directed Slaugh to bring in separate lists of proposed budget transfers, one with the $5 surcharge, and one without.
French also dismissed a suggestion by the county that if Allen hands over additional funds that the extra money be reimbursed if Iola later pulls out of the contract.
“Services are being rendered” for that money, French explained. “That money is being spent.”
Wells said he wouldn’t be opposed to the city handing over what money, if any, was left over each year.
“If they gave us an additional $300,000, and we spent only $250,000,” the remaining funds could be given back, Wells explained.
Councilman French said he is wary of supporting a sales tax for new schools, citing the burden diverting the quarter-cent sales tax to Allen County Regional Hospital is to the city.
“I’m all for new schools. We need it. But can we do it on the backs of the people in Iola. There is a lot of poverty here,” he said.
French also spoke about a study in front of the council that notes city employees are underpaid compared to other municipalities across the state.
“I thought our city workers were paid well, especially compared to what I make as a state employee,” French said. “In the 28 years I’ve been with the state, I’ve gotten a $4 raise.”
The city cannot afford to miss out on new schools, Wells responded.
“At some point, this school has to be built,” Wells said. “In the next 20 years, if we keep up with the current (trends) in education, they’re gonna start unifying districts. Where do you go to unify.”
Districts will go to the newest, nicest buildings in the unification area. Without a new school in Iola, the city has no shot to serve as the hub, Wells offered.
“That’s why I think it should be a straight bond issue,” Franklin said, with no city sales tax figured into the funding formula.
“Several merchants have called me,” Councilman Don Becker added. “Not one is in favor.”
City may drop EMS
