Projected deficit less than $164,000

After facing a projected deficit of more than $700,000 the city of Hillsboro has been able to pare down expenditures, leaving a projected deficit of less than $164,000 by the end of 2011.

On Tuesday evening, Hillsboro Auditor Gary Lewis presented the Hillsboro City Council's finance committee with a month-by-month breakdown of the overall general fund revenue projection, tax income projection, ambulance service revenue projection, and general fund expense projection. There was also a list of several cuts that have recently been made, such as not replacing two retired patrolmen, with a transfer of $7,400 to police pension, a savings of $62,582; replacing a retired firefighter with with part-time firefighters, with a transfer of $6,584, a savings of $46,354; a savings of $100,000 if contingency money is not utilized; a reduction of $5,000 in street lighting; the layoff of the deputy tax commission, $14,056; layoff of the assistant grant writer/administrative assistant, $9,200; layoff of an IT/public access employee, $14,300.

"These are savings for this year?" asked council president Lee Koogler.

"For 2010," Lewis said. 

The committee also looked at a breakdown of the proposed 2010 budget, and additional cuts that had been made, presented with a side-by-side comparison of the 2009 expenditures. Lewis had footnotes of the cuts made, which totaled approximately $250,000.

The city, according to Lewis, is anticipated to have an ending balance of $323,447 for 2010.

The committee then looked at the proposed 2011 budget and projected revenues. 

"It brings that projected deficit for 2011 down to $163,658," Lewis said. "Obviously there are some other things we did in there, some cuts here and there as well, to help bring that down within the 2011 budget. By and large, a big portion of that is carrying through the changes that were made last week. That brings that (deficit) down from where we put everything into the budget, around $730,000. Now it's down to under $164,000. So that is where we stand today. So, having said that ... the big question is, as you have heard quite often before, I sit here knowing you gentlemen are the ones who control the purse strings. The question is: 'What's council's wishes.'"

After a long pause from council members, finance committee chairperson Peter Pence said, "I think the bottom line is we have to work to get to zero."

Pence asked what else there was left to look at, and Hillsboro Mayor Dick Zink said, "There are three offices in there that we don't control: the auditor's office, the law director (Fred Beery), and the (Hillsboro Municipal Court) judge (David McKenna). So, we've made cuts. I guess my question is, 'Where do they stand?' I guess I don't know what Gary is going to do yet, I don't know what the judge is going to do, or the law director. "

Lewis said he has some plans for cuts, which he probably will implement within a week. Lewis said he was not certain exactly which approach he would take. He told The Highland County Press last week that he was looking at a reduction in hours for all employees in his office, up to 8 hours a week. 

Pence asked that Beery and McKenna be contacted prior to the next finance committee meeting, scheduled for July 6 at 5 p.m., to discuss cuts they could make in their offices. 

Out of the six city departments that make up the general fund, Lewis, Zink and Hillsboro Safety and Service Director Ralph Holt have to meet with the street, fire and police departments, administration and auditor's offices. Zink said, "We've taken care of the tax office."

Holt will also contact American Electric Power about turning off a number of street lights throughout the city. Holt said the current bill is projected to cost around $59,000, and there is only $50,000 budgeted. Zink said if they don't contact AEP to turn them, the electric company may do it anyway when the city can't pay the bill. It was noted that there may be costs associated with shutting the power off to the lights. 

Pence asked if there was some sort of relay device, so the city could rotate which lights were turned off that way, so each light could remain on for a portion of the time, rather than just turning off every other one. Holt said there was not. 

Finance committee member Bill Alexander asked if to shut the lights off if an act of council was necessary. 

Zink said it was not, but, "We'd like to get some input from council, but we're going to do what we have to do to meet budget. If the residents want to give somebody heat, well, they're going to have to give it to us (the administration). If you guys don't want to make a decision on it."

The finance committee will ask for input from the street and safety committee before making a final recommendation to a full council on July 12.

Koogler asked Lewis, regarding revenue, "Our income tax projection, you said we have been fairly close to our projection at this point. At this point do we anticipate any other revenues from any other sources?"

Lewis said, "Not anything extraordinary," unless there would be something in the area of estate taxes, which is a difficult area to project. Lewis said those numbers usually come in around August/September. 

"The reason I ask, I know there should be about $45,000 from one estate coming," Koogler said. "So there should be some other money coming in."

"There's our street lights," Zink said.

Pence asked where the city stood on health insurance, and Zink said he had asked Doug Wagoner, the city's insurance agent, to "work something up." Lewis said he had projected an increase of 10 percent. Last year the projection was a 15-percent increase, he said, but it ended up being 8 percent. The year before it was 4.9 percent, Koogler said. Several committee members noted that it was not unrealistic that the increase could be well above 10 percent. 

Lewis said that all the cuts that have been made thus far are reflected in the numbers he presented. Zink asked if the new fire contracts with surrounding townships were reflected, and Lewis said they were, at an increase of $91,000. Shoemaker asked if the fire contracts had been completed and Holt said they were not. Lewis said the $91,000 was a reflection of a conservative increase, when Zink said he thought the increase should be higher. 

Lewis asked council members if they had any other questions they wanted answered. 

"I think you've done a fantastic job with what we've seen in front of us," Shoemaker said. "I don't know what else there would be to see. You projected the revenue plus expenditures, and we're pretty much on target for our projections for 2010."

Pence said that at next Tuesday's meeting the committee would review turning off street lights, the discussions with general fund department heads, and discussions with municipal court and the law director's office.