Archive for Tuesday, August 9, 2011

Mill levy jumps on discovery of mistake for City of Tonganoxie

August 9, 2011

What was supposed to be a routine action Monday to approve publication of the 2012 Tonganoxie city budget was complicated by the revelation there were two errors in the numbers shared with the city council last month as it worked on the budget.

City Administrator Mike Yanez shared that news with the council before it started consideration of the $7.15 million 2012 budget for publication. He explained an incorrect total city valuation figure was used in the earlier budget calculations and that the budget had no carryover funds. It has been the city’s practice to carryover 15 percent of its operating budget, but faced with a tight budget with the recession the city budgeted a $5,000 carryover in 2009 but was able to end the year with more than $100,000, he noted.

The valuation error will affect the proposed mill levy in the budget because the actual city valuation of $35.58 million is $330,000 less than the figure used during the council’s budget workshops. That means one mill would produce $35,583 in revenue for the city rather than the $35,913 assumed earlier. It also means the city would have to increase its mill levy to 37.816 mills to collect the $1.345 million in revenue in the published budget needs to support the general fund, library and debt obligations. The council had reached consensus the mill levy in the 2012 published budget would be 37.436 mills or a third of a mill more than that in the 2011 budget.

Should the published budget be approved Aug. 22, the city’s share of taxes for each $100,000 of assessed residential valuation would be $434.88.

The council approved publishing the revised budget, which will set the public hearing on the document for 7 p.m. Aug. 22, on a 4-1 vote with Councilman Chris Donnelly voting no. But that decision came after council members asked staff pointed questions about how the errors occurred, City Hall oversight and discussed Yanez’s recommended steps to include a carryover.

City Clerk Kathy Bard said she mistakenly entered the 2010 actual valuation figure provided by the county clerk rather than the 2011 valuation.

She also said she made an entry error while filling out a budget forms that eliminated the proposed 2012 carryover.

The errors were discovered when she worked through the state’s budget computer forms, which don’t allow further progress unless the errors are corrected, Bard said.

In response to a question from Councilman Bill Peak about City Hall’s fact-checking assurance process, Bard said the lesson she learned was to start preparing the computer forms earlier in the process.

Yanez, who admitted to be “panicked” and “humbled” on the discovery of the errors, said the lesson he learned was to keep carryover funds in mind throughout the budget process.

Mayor Jason Ward said he shared staff’s disappointment when he learned of the errors last week because of the warning the council had received from its financial advisers and citizens of the need for the carryover fund.

“I was very disappointed because over the last year I feel the council has been working to build our reserves so that we would have something in our carryover,” he said.

Yanez said he worked with department heads to find cuts to their proposed 2012 budgets that would allow the city to finish 2012 with a carryover of $242,584. Those actions would delay the hiring of a new full-time police officer until April 1, delay the hiring of a new public works equipment operator until July 1, forego hiring a new City Hall clerk in 2012 with the anticipated retirement of a present employee and use $80,000 from special highway funds for street maintenance rather than the same amount from the general fund.

City Supervisor Kent Haskett said he could adjust to the changes but that a mild winter would help. He added that his crew was already shorthanded and illnesses and vacations put a lot of stress on the department.

The situation was similar in his department. Police Chief Jeff Brandau said. The department would cover the shifts with part time officers until April 1, but that would consume half of his budget for part-time hours, he said. There was not much room for additional cost cutting, he said.

“I screwed it about as tight as it can get,” the chief said.

With Peak expressing concern the delayed hire could affect public safety, the council reached consensus to hire the new officer at the start of the year while agreeing to the other proposed adjustments.

Should the trend continue, the city’s valuation slide would present the council with the tough options of either cutting services or raising taxes, Donnelly said. If the council chose to do the former, it needed to inform residents that was its decisions so that department heads didn’t take the heat for lower service levels, he said.

Also attending the budget discussions at the request of the council were representatives of the Tonganoxie Public Library Board. Donnelly was among the council members asking they attend to further explain the library’s need for additional mill levy support.

Amanda Altenhofen, library board treasure, said she prepared the budget when former director Royce Kitts resigned shortly before the budget process started. She didn’t think it was her place to purpose cuts to the library’s operations to arrive at a lower mill levy, she said.

But, Altenhofen said new library director Kelly Fann, who was at the meeting, would look at the library’s operations for potential cost savings when she started Sept. 1.

“I have a pretty good track record with that,” Fann said.

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