Water rates for Iolans will go up 10 percent starting January in an effort to further replenish the city’s water fund reserves.
The higher water rates — approved with a deadlocked vote that required the tie-breaking vote by Mayor Bill Shirley — should also be enough to allow the city to resume transfers from water reserves to the city’s general fund.
A spirited debate preceded the vote.
Those against the increase noted rates had already increased by 18 percent in November. The only way to sway their vote was if the 10 percent increase — about $200,000 — would have been directed to repairing the city’s aging water system. Instead, the money will be transfered to the general fund.
Slaugh said without the $200,000 transfer, the city would be required to look at painful spending cuts to balance the budget, such as further deferring equipment purchases or cutting other services. Another option would be to raise property taxes about 6.5 mills to make up the difference.
Without the transfer, the city’s general fund expenditures would be on par with what was spent in 2010, Slaugh said.
Councilmen Ken Rowe made a motion that the city not transfer funds from water reserves to the general fund, a motion that died because it was not seconded.
Rowe and Kendall Callahan spoke about avoiding spending increases, instead favoring cuts in spending.
Slaugh said some spending cuts already had been approved, particularly when compared to inflation, pointing to the city’s ever-shrinking employee workforce. Iola has 95 employees, including two vacant positions, compared to 120 employees 10 years ago.
The city already has an austere budget, Slaugh continued. Further spending cuts would likely lead to cuts in services.
“We just can’t keep piling these charges on the citizens,” Callahan responded.
Councilmen Joel Wicoff said he understood Rowe’s and Callahan’s concerns, but also noted the need to shore up the city’s budget and provide added funding for infrastructure improvements.
Wicoff’s motion to accept Slaugh’s recommendation for the water rate hike drew four “yes” votes: his as well as Don Becker’s, Scott Stewart’s and Beverly Franklin’s. Voting against were Rowe, Callahan, Steve French and Jim Kilby.
When asked for his tie-breaking vote, Shirley said simply “I vote for the motion.”
COUNCIL MEMBERS heard further explanation of the city’s 2011 audit from Scot Loyd of the McPherson-based accounting firm Swindoll, Janzen, Hawk and Loyd, LLC.
In a letter to council members last week, Loyd identified the city’s unresolved ambulance issues from 2009 and 2010 as a “material weakness” in the city’s budget.
