Proposed city of Tonganoxie 2011 budget present difficult decisons
Tonganoxie City Council members won’t start working on the 2011 budget until next week, but they now know how tough is the task ahead of them.
City Administrator Mike Yanez gave the council the bad news Monday in the form of a 2011 budget proposal.
But even as he went over the basics of the proposal with the council, Yanez characterized it as a starting point. He said it would be up to the council in the next month to make tough decisions that could mean eliminating positions or services or approving a mill levy increase, such as the 4 mill hike requested in the budget proposal.
A mill equals $1 for every $1,000 of assessed valuation.
The reason for such dire circumstances is the city's revenue and financial picture in the recession.
Yanez explained assessed valuation decreased one-half of 1 percent from $36.09 million in 2009 to $35.9 million in 2010, sales taxes and other revenues continue to be depressed and the city enters 2011 budget cycle with no reserves in the general fund.
Overall, the city will receive $1.28 million in general fund revenue from non-ad valorem tax sources in 2011, Yanez estimated. That is $815,00 less than department heads are requesting from general fund support, and that gap will have to be plugged with revenue from property taxes
The general fund shortfall exists despite department heads requesting $168,000 less in funding for 2011 than the $2.1 approved in 2010. Seven of nine general fund departments requested less money for 2011 with adminstration reducing spending by more than $49,000 and the street department cutting back $12,000.
Yanez estimated the 4 mill increase would mean $72 in additional taxes on a home with an assessed valuation of $150,000.
The 4 mill increase in the proposed budget assumes the city would use its share of the countywide sales tax to help with its 2011 debt obligations. That use of the sales tax allowed Yanez to decrease mill levy support for debt service from 6.77 mills in 2010 to 5.267 mills in 2011.
However, Mike Kelly, city counselor, told the council he would have to review countywide sales tax's language to ensure that was an allowable use.
The 2011 proposal would staff no new positions and would leave open the building inspector/codes enforcement officer position eliminated in last year's budget.
Moreover, the 2011 proposal has no cost-of-living increases for employees. Yanez, however, does recommend 2.5 percent merit pay increases to those with satisfactory or better performance evaluations and longevity pay bonuses so that senior employees can meet increased heath insurance and cost of living expenses.
The council will start budget deliberations at a special meeting starting at 6:20 p.m. Tuesday at the council chamber.