Archive for Tuesday, August 10, 2010

Council vows to build reserve after approving 2011 budget

August 10, 2010

The pro and con debating points were familiar, and in the end the Tonganoxie City Council approved the 2011 $7.02 million budget as it was published July 28 in The Mirror.

The budget establishes the city’s mill levy for 2011 at 37.102 mills, up from 35.104 for the current year. A mill equals $1 of revenue for the city for each $1,000 of assessed valuation

At that mill rate, the tax on a residential home for $100,000 of assessed valuation would be $427, compared to $403 for 2010.

The budget’s approval on a 4-1 vote came after City Administrator Mike Yanez gave a computer-aided explanation of the budget and five of the about 35 residents in attendance questioned aspects of the document.

Yanez said declining city revenues contributed to the final budget’s 2.088 mill levy increase. Sales tax collections were flat, building permit fees fell sharply with housing starts, interest earning declined $90,000 since 2008 and the city assessed valuation decreased by $184,882 — meaning a mill produces less revenue for the city than last year, the city administrator said.

Also contributing was the decision of past councils to spend the city’s cash reserve rather than increase taxes. As a result the city would enter 2011 with a projected cash reserve of $5,000, Yanez said.

Finally, debt from city projects also played a role in the upward pressure on the mill levy, Yanez said.

The budget includes a 2.5 percent cost-of-living increase for city employees and longevity pay raises. Yanez said the cost-of-living increase was needed in a city notorious for having the lowest wages and worst benefit package in the region.

Yanez shared charts comparing Tonganoxie’s starting wages for various positions with those other of Leavenworth, Lansing, Basehor, Bonner Springs, Gardner, Lenexa, Roland Park, Lawrence and Shawnee. Tonganoxie was significantly lower than those municipalities with the exception of Basehor.

The list was questioned by a number of residents speaking at the public hearing on the budget. Charlie Conrad said most of the cities were large or wealthy enough to afford better wages. The comparisons were as sound as his comparing the price of a glass of tea at his West End Café to that charged at The Legends, he said.

Conrad suggested true comparisons could only be drawn if budgets were compared line item by item.

Lester Miller, too, objected to using other cities as a justification for wage increases.

“If people are not interested in your town or not interested in that particular job, let them go on,” he said. “I’m sure there are one or two people willing to take their place.”

Councilwoman Paula Crook, who voted against the budget, agreed the comparison list was unfair. Many of the cities had much more annual revenue than Tonganoxie, she said.

But Councilmen Burdel Welsh spoke for the majority of the council in defending the pay raises. Like it or not, the city was in competition with the cities on the list because city employees did leave for better paying opportunities in those locations, he said.

That carried a hidden cost not only in the training the city provided those employees but also in expense of background checks, interviews and other costs in the hiring process, Welsh said.

Council members were more attentive to criticism from Bill Peak of spending down the cash reserve.

That was a failing of the council in recent years as the reserve has shrunk from nearly $1 million at the start of 2008 to what Yanez termed “pocket change” for the start of 2011, Councilman Jason Ward said.

That number didn’t include a $50,000 contingency in the 2011 budget as a hedge against emergencies, Ward said.

But the council had to take steps to build reserves, Ward said. The 2011 budget did so by eschewing capital improvement projects in 2011 but still addressing ongoing maintenance issues that saved money in the long run, such as entering into lease to buy agreements for new police cars rather than buying used vehicles, he said.

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