2012 budget to be tight, council told
As the Tonganoxie City Council started its 2012 budget considerations, it was warned to expect another tough year.
The council met in a special session Monday so that its new members could get an introduction to the services the city provides and different revenue sources and special funds within the city budget. It will be the first budget cycle for council members Dennis Bixby, Chris Donnelly, Andy Gilner and Bill Peak, all of whom were either elected or appointed to their seats since the 2011 city budget was crafted and approved in July and August 2010.
After City Clerk Kathy Bard, Fire Chief Dave Bennett, Police Chief Jeff Brandau and City Supervisor Kent Heskett presented the council with an overview of the services their departments provide, City Administrator Mike Yanez said the council could expect a replay of last year’s budget process in which the council struggled to reconcile recession-stunted revenues with needs.
Revenues won’t bounce back this year, Yanez warned. He predicted the city’s overall assessed valuation would be down 1 to 3 percent from the 2011 budget total.
“If so, that means 1 mill brings in less money,” Yanez said.
Sales taxes have also remained stagnant.
Kansas Department of Revenue figures show the city received $219,000 in sales tax through the first four months of 2011. That is $18,000 more than collections for the same four months of 2010. But nearly all the increase was from the March distribution, which was so unusually high that Yanez suspects some could have been from delinquent payments.
His budget would probably estimate sales tax revenue as the 2010 level, Yanez said.
“There’s just not much new retail,” he said. “O’Reilly’s (Auto Parts) will help, but there’s just not been much growth.”
The third city revenue stream to remain dry with the recession is development fees. Although the city has had six home starts this year, there are no new subdivisions that would push that number to or near the triple-digit numbers common before the recession, which not only brought in development fees but added to the city’s valuation.
“We were so spoiled by 5 to 10 percent valuation increases year after year after year,” Yanez said. “Once we hit the wall, we were like kids getting their allowance cut.”
The budget could be made more complicated by one current trend.
“One of the things we’re worried about is high fuel prices,” Yanez said. “This $4 per gallon is sucking up money.”
And although there are no large subdivisions on the horizon, Yanez said demand for building inspections was outpacing the one-day-a-week service the city offers through the sharing of Basehor’s building inspector.
“We may have to beef that up in 2012 just to meet demand,” he said.
Yanez said department heads would now start preparing their 2012 budgets to present to him, aware there would be a reluctance to raise the city’s current mill levy of 37.102 mills. He would then bring back a draft budget sometime near July 1 for the council to amend.