HUMBOLDT — Humboldt City Council members said Monday that cuts are necessary to the city’s 2011 spending plan.
The city’s proposed budget was discussed at a special meeting, in which council members also toured the new city hall building that should be open sometime in September.
Council members took issue with the proposed budget, and its proposed expenditures of $3,503,615 in 2011.
That number should be cut substantially, said council member Sean McReynolds.
“Our primary goal should be to ensure that what’s coming in and what’s going out remains equal,” McReynolds said, noting that the plan presented Monday relied too much on utility reserves and transfers.
McReynolds noted that since 2007, Humboldt has brought in only $200,000 in added revenues, while the city’s expenditures have increased about $1.2 million.
At that rate, all of the city’s reserves will be depleted by the end of 2011, McReynolds contended.
“We should ask now how we plan on paying for 2012,” McReynolds said. “We need to look further into the future.”
McReynolds and council members Vada Aikins, Don Walburn and Dan Julich ran through a list of potential cuts they’d like to see Humboldt City Administrator Larry Tucker institute before the city’s Aug. 9 budget hearing.
One example they provided was delaying purchase of a number of new gas meters — expected cost $53,000 — that would eventually make it easier for city employees to accumulate monthly readings by using an electronic scanner.
But any savings in time and energy to read meters would not be realized until the city also replaced its water meters so they could be scanned as well, McReynolds noted.
The upcoming budget year is not an ideal time for such expenditures.
McReynolds also suggested the city think again about purchasing a new truck and hot asphalt patch machine for Humboldt’s street and alley department.
Council members also discussed briefly instituting a freeze on salaries before agreeing that the added monies for salaries — Tucker had recommended a 2 percent increase, which would cost $20,000 next year — be negated by cuts elsewhere.
A FEW NOTES:
— Due to declining revenues, budget cuts are required for Humboldt’s water and sewer funds, Tucker said, largely because customers simply are consuming less. Transfers will be needed from the gas fund and sanitation funds to cover the lost revenues. Another usage rate increase will eventually be necessary.
— Without added revenues, such as a sales tax increase, there will be no new money for street improvements, Tucker said. In addition, the money the city collects from the state in fuel taxes for road maintenance also has dropped this year.
— The city will need to transfer more money to the city’s swimming pool fund because attendance has dropped 35 percent so far this summer. That can be accounted to the opening of new pools in Chanute and Iola recently.
— Sales tax revenues are up about 5 percent from 2009, but still down about 9 percent from 2008.
TUCKER SAID he would look at paring some of the expenses, which will not affect the city’s budget authority.
The city’s budget will be supported in part by an ad valorem tax levy of about 64.3 mills, which will bring in about $394,000. Those numbers may be adjusted once Humboldt’s final assessed valuation is determined this fall.
Using those figures, the owner of a $100,000 home would pay about $740 annually in property taxes to the city, not counting taxes spent to support USD 258, the county or Allen County Community College.
