Tempers flare as city talks budget

A grueling, two-day budget workshop for Iola City Council members ended Tuesday with verbal sparring between council members and city staff.
Tempers flared near the conclusion of the five-plus hour workshop, which began Monday and wrapped up Tuesday afternoon, as council members discussed the city’s major projects fund.
Iola dedicates half of its one-cent sales tax for capital improvement projects, a policy that has been in place since the sales tax was renewed in 2009.
At issue, for Councilman Kendall Callahan, was the insertion of items such as a spray park and water park into the city’s 2011 spending plan when it wasn’t a part of the budget approved by former city commissioners last year, nor was it included in a separate budget prepared to the council members when they were seated in April.
The insertion, Iola City Administrator Judy Brigham replied, came while former commissioners discussed major projects last fall, after agreeing to dedicate a portion of the city’s sales tax revenues to startup costs for a new Allen County Hospital.
That discussion, Brigham explained, came shortly after the city received a report from Vision Iola, an in-depth planning process looking at such things as improving Iola’s parks, signage and city trails and sidewalks.
Such expenditures would not be spent without the council’s approval, Brigham said.
The explanation did not sit well with Callahan, who had queried Brigham and other city staff about differing numbers from the 2012 budget and those presented in previous years.
“I’m sensing distrust,” Brigham said.
“You’re right,” Callahan responded, a comment that triggered a rebuke from council member Scott Stewart.
Stewart, a former city employee, repeated a comment of support voiced seconds earlier by fellow Councilman Jim Kilby: “I trust our city staff.”
Stewart then opined that Callahan should apologize for his comments. “Can you honestly tell me you don’t trust somebody who has given more than 25 years of her life serving the city of Iola?” Stewart asked Callahan.
“I didn’t say I didn’t trust city staff,” Callahan responded. “I said I don’t trust their numbers.”
When asked for further comment, Callahan said, “all I’m saying is that some of these numbers have changed” from previous budget submissions.
The final curve ball came at the end of the workshop  after Callahan and council member Ken Rowe presented figures that pointed out since 2006, the city’s overall spending has increased more than 13 percent while revenues are up only 4.45 percent.
“That’s not sustainable,” Rowe said. “We can’t afford to have spending outpace revenues.”
Rowe asked Brigham and other department heads to look again at their 2012 budget and cut more spending.
The spending plan developed for the council members included total expenditures of about $24 million, down 1.6 percent from this year’s budget. Rowe said the spending cuts should equal the total revenue loss for this year, 4.43 percent.
Brigham said the spending plan as presented would rely on an ad valorem tax levy of about 38 mills, on par with this year.
The spending plan presented to council members this week puts in place a $4.3 million general fund, down about $200,000 from this year. The general fund relies on about $1.6 million in utility transfers, the bulk of which comes from Iola’s electric fund. The city has annually supplemented its general fund to keep property taxes stable.
“But we don’t have a revenue problem,” Rowe said. “We have a spending problem.”
“I figured you would say that,” Brigham replied.
Brigham said she would seek more input from council members at their regular meeting Monday evening to determine whether more cuts should be made.