Finance committee votes to recommend 10-percent cut to general fund for remainder of 2010
Lead Summary
By
Brandy Chandler-brandychandler@gmail.com
The finance committee of the Hillsboro City Council has voted to
recommend the general fund be cut 10 percent across the board for the remainder of 2010.
The committee met Wednesday to discuss the pending financial situation the city is in. Committee chairperson Peter Pence said the committee had to reassess the budget after Hillsboro Mayor Dick Zink announced last week that the layoffs of three city employees had been "cancelled."
Pence said that, "The recent events, which we all read about in the paper, which was the administration has decided not to follow through with layoffs as told to us by the mayor and safety service director (Ralph Holt)."
Holt and Zink were not present at the council meeting, and according to Pence they were out of town, and had a previous engagement, respectively.
As reported in The Highland County Press, three city employees were
told June 25 they would be laid off after 30 days. One employee found
a job and left city employment two weeks early. At the end of last month, Zink said he told the other two employees they would not be laid off.
Zink said July 26 that, "We're going to wait and see where we are at the end of the year. There are some things happening to improve our cash flow. We're going to go month to month and see what happens."
On Wednesday, Pence said, "I would like to ask the auditor (Gary Lewis), these claims of improved cash flow for the city for the year 2010, do you see that being the case?"
"Nothing has changed since the last time I talked to you," Lewis said. "I'm going to have to say 'no.'"
Finance committee member Dave Shoemaker said that he spoke to Zink
regarding the situation and, "He indicated the money is going to be there but he did not indicate where it was coming from for 'obvious security reasons,' as he put it. So, the point of the matter is that, that is speculation. And when I asked him that question about speculation, he brought up the point that every time we do a budget it is speculation. However, we do have history to look at upon looking at a budget, whereas this cash flow increase, to me, is still speculation."
"I certainly don't think we're in a 'wait and see' position," Pence
said. "I guess I wish there had been more transparency where this is coming from, and I'm not seeing that. We met for a month and a half to try to get the 2011 tax budget squared away, and I'm not sure why that information wasn't shared in those meetings. Because we've talked and talked and talked and given everybody a chance to present their side and their figures, and that has not happened."
The city of Hillsboro, according to Lewis, is facing a potential deficit by the end of 2011. In recent months, as the requested budget
has changed, and cuts have been made, and other expenses added, the projected deficit has been as low as $164,000 and as high as $730,000. During the July council meeting, council voted to have Lewis prepare the city's tax budget to end 2011 with a carryover into 2012 between $400,000 and $450,000. Lewis said a ballpark figure of the projected deficit is around $200,000 as of Wednesday.
Lewis said that the cost savings generated by the layoffs were figured in to the tax budget, and the numbers will now have to be re-worked. He told the committee that the layoffs would have generated an estimated $20,000 in savings through the end of 2010, and approximately $80,000 in 2011. If the city should go through with the layoffs, the longer time period the employees are still on staff, the savings decreases. For example, Lewis said if the city would go through with the layoffs this week, there would be a savings of approximately $17,500 through the end of the year and approximately $75,000 next year, due to the amount of unemployment the city would have to pay.
Lewis said, "Speculation occurs every day. You never know what tomorrow brings, but you have to rely on the history that you have with regard to making your speculations."
Shoemaker said that as council members there are two people the city has to rely on for information, "The law director for legal issues and the auditor for our figures. That's what I have to look at, black and white figures. Now had the mayor been able to document or verify where this money was coming (from), then it could have been looked at a little differently. However, without that, I don't think we can take a chance with the city's or the citizens' money, the tax money, to look at speculation as far as income. I would certainly like to be able to do that, but I don't feel comfortable doing that with citizens'
money."
"My way of thinking is, the mayor and the safety and service director told us they were going to make layoffs," Pence said. "We based our decisions off what they said they were going to do. They've not followed through with what they said they were going to do. And, as far as I am concerned, if they want to keep their 2010 appropriations at the level they are at, they need to show where this money is coming from."
"Considering everything we've heard, all these things we've talked
about, all these meetings in the past," Shoemaker said, "the administration chose not to go forward with what they told us they were going to do, which effected our 2011 budget. Therefore, I recommend that we submit to council as a whole at the next meeting that we amend the 2010 budget and that we cut the general fund for the rest of 2010 by 10 percent, in order to help balance the budget in 2010 going in to 2011. And that is not an easy motion that I have just brought up ... I don't see a light at the end of the tunnel."
Pence said before he made such a decision, he wanted to see more figures. Shoemaker said, "We've seen figures."
Alexander asked Lewis how much a 10-percent cut would save, and Lewis said he didn't immediately know and began calculating figures.
Council member Mary Brown Turner prompted a line of discussion regarding ways to increase revenue for the city, asking if there was a group of citizens who could explore ideas to raise funds. Lewis said that the options through which the city could generate income was limited. Committee member Bill Alexander asked Lewis if grant writers for the city had explored all stimulus funds and other grants. Lewis said that he was not kept apprised on such information. Turner asked if the city could get a cut of the funds made from the Festival of the Bells celebration, and that she would like to see the festival organizational committee's financial figures. Lewis said the festival was not a city function, that the committee paid the city for services and that it was a not-for-profit organization. Shoemaker said a good portion of that budget comes from sponsorships and private donations.
Shoemaker said it had previously been discussed that the city could
potentially charge for certain services provided by Hillsboro Fire and Rescue, and the committee asked Pence to gather further information.
Going back to Shoemaker's motion, Pence said he wanted to know if 10 percent was the proper figure to cut by. Shoemaker said that if the city's financial standing changes and there is a new stream of revenue, the city can always do away with the cut.
Lewis then said 10 percent would cut approximately $150,000 to $175,000.
Pence seconded the motion for a 10 percent cut across the general fund, from September to the end of the year.
Pence said he would have Hillsboro Law Director Fred Beery write up
the legislation for presentation to a full council on Aug. 9.
The finance committee of the Hillsboro City Council has voted to recommend the general fund be cut 10 percent across the board for the remainder of 2010.
The committee met Wednesday to discuss the pending financial situation the city is in. Committee chairperson Peter Pence said the committee had to reassess the budget after Hillsboro Mayor Dick Zink announced last week that the layoffs of three city employees had been "cancelled."
Pence said that, "The recent events, which we all read about in the paper, which was the administration has decided not to follow through with layoffs as told to us by the mayor and safety service director (Ralph Holt)."
Holt and Zink were not present at the council meeting, and according to Pence they were out of town, and had a previous engagement, respectively.
As reported in The Highland County Press, three city employees were told June 25 they would be laid off after 30 days. One employee found a job and left city employment two weeks early. At the end of last month, Zink said he told the other two employees they would not be laid off.
Zink said July 26 that, "We're going to wait and see where we are at the end of the year. There are some things happening to improve our cash flow. We're going to go month to month and see what happens."
On Wednesday, Pence said, "I would like to ask the auditor (Gary Lewis), these claims of improved cash flow for the city for the year 2010, do you see that being the case?"
"Nothing has changed since the last time I talked to you," Lewis said. "I'm going to have to say 'no.'"
Finance committee member Dave Shoemaker said that he spoke to Zink
regarding the situation and, "He indicated the money is going to be there but he did not indicate where it was coming from for 'obvious security reasons,' as he put it. So, the point of the matter is that, that is speculation. And when I asked him that question about speculation, he brought up the point that every time we do a budget it is speculation. However, we do have history to look at upon looking at a budget, whereas this cash flow increase, to me, is still speculation."
"I certainly don't think we're in a 'wait and see' position," Pence
said. "I guess I wish there had been more transparency where this is coming from, and I'm not seeing that. We met for a month and a half to try to get the 2011 tax budget squared away, and I'm not sure why that information wasn't shared in those meetings. Because we've talked and talked and talked and given everybody a chance to present their side and their figures, and that has not happened."
The city of Hillsboro, according to Lewis, is facing a potential deficit by the end of 2011. In recent months, as the requested budget
has changed, and cuts have been made, and other expenses added, the projected deficit has been as low as $164,000 and as high as $730,000. During the July council meeting, council voted to have Lewis prepare the city's tax budget to end 2011 with a carryover into 2012 between $400,000 and $450,000. Lewis said a ballpark figure of the projected deficit is around $200,000 as of Wednesday.
Lewis said that the cost savings generated by the layoffs were figured in to the tax budget, and the numbers will now have to be re-worked. He told the committee that the layoffs would have generated an estimated $20,000 in savings through the end of 2010, and approximately $80,000 in 2011. If the city should go through with the layoffs, the longer time period the employees are still on staff, the savings decreases. For example, Lewis said if the city would go through with the layoffs this week, there would be a savings of approximately $17,500 through the end of the year and approximately $75,000 next year, due to the amount of unemployment the city would have to pay.
Lewis said, "Speculation occurs every day. You never know what tomorrow brings, but you have to rely on the history that you have with regard to making your speculations."
Shoemaker said that as council members there are two people the city has to rely on for information, "The law director for legal issues and the auditor for our figures. That's what I have to look at, black and white figures. Now had the mayor been able to document or verify where this money was coming (from), then it could have been looked at a little differently. However, without that, I don't think we can take a chance with the city's or the citizens' money, the tax money, to look at speculation as far as income. I would certainly like to be able to do that, but I don't feel comfortable doing that with citizens'
money."
"My way of thinking is, the mayor and the safety and service director told us they were going to make layoffs," Pence said. "We based our decisions off what they said they were going to do. They've not followed through with what they said they were going to do. And, as far as I am concerned, if they want to keep their 2010 appropriations at the level they are at, they need to show where this money is coming from."
"Considering everything we've heard, all these things we've talked about, all these meetings in the past," Shoemaker said, "the administration chose not to go forward with what they told us they were going to do, which effected our 2011 budget. Therefore, I recommend that we submit to council as a whole at the next meeting that we amend the 2010 budget and that we cut the general fund for the rest of 2010 by 10 percent, in order to help balance the budget in 2010 going in to 2011. And that is not an easy motion that I have just brought up ... I don't see a light at the end of the tunnel."
Shoemaker noted he did not think the city was in a position to ask the taxpayers for funds.
Shoemaker noted he did not think the city was in a position to ask the taxpayers for funds.
Pence said before he made such a decision, he wanted to see more figures. Shoemaker said, "We've seen figures."
Committee member Bill Alexander asked Lewis how much a 10-percent cut would save, and Lewis said he didn't immediately know and began calculating figures.
Council member Mary Brown Turner prompted a line of discussion regarding ways to increase revenue for the city, asking if there was a group of citizens who could explore ideas to raise funds. Lewis said that the options through which the city could generate income was limited. Alexander asked Lewis if grant writers for the city had explored all stimulus funds and other grants. Lewis said that he was not kept apprised on such information. Turner asked if the city could get a cut of the funds made from the Festival of the Bells celebration, and that she would like to see the festival organizational committee's financial figures. Lewis said the festival was not a city function, that the committee paid the city for services and that it was a not-for-profit organization. Shoemaker said a good portion of that budget comes from sponsorships and private donations. Turner also asked if the owners of empty houses were paying their taxes and Lewis said most property taxes go to the county, and that the bulk of the city's tax revenue comes from income tax.
Shoemaker said it had previously been discussed that the city could potentially charge for certain services provided by Hillsboro Fire and Rescue, and the committee asked Pence to gather further information.
Going back to Shoemaker's motion, Pence said he wanted to know if 10 percent was the proper figure to cut by. Shoemaker said that if the city's financial standing changes and there is a new stream of revenue, the city can always do away with the cut.
Lewis then said 10 percent would cut approximately $150,000 to $175,000.
Pence seconded the motion for a 10-percent cut across the general fund, from September to the end of the year. The motion was carried 3-0.
Pence said he would have Hillsboro Law Director Fred Beery write up the legislation for presentation to a full council on Aug. 9.
[[In-content Ad]]