Sean C. Morgan
Of The New Era
Thanks to a variety of cost savings, the city of Sweet Home is carrying over more than $1 million from this year to next, accounting for a large part of an increase in the size of its 2006-07 budget.
The current budget year ends on June 30. The 2006-07 budget year begins on July 1.
City Manager Craig Martin presented a budget proposal to the city’s Budget Committee on Thursday, April 27.
The overall proposed budget is $22.9 million for all funds, including the general fund, temporary levies, special funds and enterprise (utility) funds, an increase of approximately $1.5 million.
The largest portion of the increase is a direct result of a 34-percent increase in beginning fund balances, Martin said.
Beginning fund balances are funds that are not spent in a budget year and carried forward to the next. Each year, the city budgets some monies to its ending fund balance, which becomes the next year’s beginning fund balance. For 2005-06, the city budgeted some $711,000 in its general fund ending fund balance, but it is now projecting a larger carryover, approximately $1.15 million. For 2006-07, it will spend down that total by $200,000, budgeting an ending fund balance of $902,000 for 2006-07.
The larger beginning fund balance and ending fund balance both help drive up the size of the budget, although those funds are not necessarily spent on anything.
The larger carryover is a “result of savings and cost-cutting measures implemented three years ago to ensure an adequate carryover that is necessary to help fund the Police Department through the final year (2006-07) of its expiring levy,” Martin said. This year, the general fund will transfer approximately $300,000 to the Police Department.
While the budget outlook has improved significantly, Martin said, “the city has been deferring necessary capital purchases as part of the effort to save for this coming year. Deferred capital purchases and improvements usually are not a good thing to continue indefinitely. For example, police cars need to be replaced, facilities need preventative maintenance, computer systems fail or need upgrading and older equipment cannot continue to be repaired indefinitely.”
The carryover is large enough to begin addressing those needs, Martin said.
“The result of the attempted catch-up in this critical budget area is evident throughout each budget as is seen in the form of an increase in capital expenditure requests,” he said.
Among the highlights, the budget will increase personal service spending, including salaries and benefits, by approximately $237,000.
Materials and services will appear to decrease by about $645,000 because the city has reallocated nearly $1 million from that fund to capital outlays in the water construction fund to begin work on a new water treatment facility.
Inter-fund transfers will increase by about $394,000, largely recognizing the increase in transfers from the general fund to the Police Department, which had a transfer of about $90,000 in 2005-06.
The budget sets aside about $332,000 for future expenditures in reserve funds.
Personnel costs will not be as affected by rising health insurance costs as they have been, Martin said. The budget plans for an increase of about 5 percent, down from the double-digit increases of recent years. Contract negotiations provide for 1-percent salary increases in 2006-07.
The proposed budget adds one new full-time police officer. It increases the city’s park maintenance position from .5 full-time equivalent to .75. It also adds two Public Works employees, one position in the street maintenance program and the other in the wastewater collections system.
Three part-time positions, reduced in Public Works over the last two years, are proposed to be reinstated at full time.
“All of these areas are needing additional resources in order to meet customer service expectations, established work standards and, in the case of our wastewater collection system, both state and federal permit requirements and mandates,” Martin said.
“The proposed 2006-07 budget demonstrates that the planned cuts, reductions and spending freezes and implemented over the past three years have been successful in making the city financially stronger for this coming year,” Martin said, but, especially with a growing city, “the current reductions in funds and services are only a short-term fix and should not be continued indefinitely…. We no longer have the luxury to continue past funding reductions in coming budget years.”
The Budget Committee appointed Josh Victor to serve as chairman and Kim Lawrence to serve as vice chairwoman. The committee includes councilmen Bob McIntire, Jim Gourley, Tim McQueary, Dick Hill, Rich Rowley and Jim Bean; Mayor Craig Fentiman; and community members Al Culver, Harold Haight, Lawrence, Scott McKee Jr., Victor and Mona Waibel.
The committee was scheduled to meet this week on Tuesday, May 2, to examine the general fund in detail. On Thursday, May 4, it will look at the police and library funds. On May 11, it will look at the Public Works budgets in detail.
An additional meeting is planned for May 16. All meetings are at 6:30 p.m. Meetings are held in the City Hall Annex, behind City Hall, 1140 12th Ave. For more information, call City Hall at 367-5128.