Millwood makes progress on 2012 budget

Finance issues dominated the agenda Monday night at the Millwood City Council meeting.

City Treasurer Debbie Matkin presented an updated version of next year’s budget incorporating saving measures that were presented during a special budget workshop in November.

“I implemented the options to balance,” Matkin said. “So when we add in the revenues and get rid of the expense, it’s pretty close… .It’s better than the last time we talked.”

Incorporating the options brings the city closer to a balanced budget next year, excluding the water fund. For example, in November Matkin reported a $14,000 deficit in the general fund. Following the changes, the fund now is projected to have an excess of more than $2,000.

The options included reduced nongrant wages for the assistant planner for an $8,800 savings, an estimated $21,300 comes from changing medical and dental benefits for employees, and a 25 percent reduction in the code enforcement officer’s salary and benefits reduces expenses by $6,000. The revised budget also eliminates capital expenditures and all nonessential overtime, saving an estimated $25,000.

Mayor Dan Mork said a decision regarding reducing employee benefits should be reached later this month. Following the decision, he plans to hold a special council meeting to review the benefits and adopt the final draft of the budget.

During the November workshop, Matkin noted the budget reflects an estimated $18,413 deficit in next year’s water fund. However, at Monday’s meeting the revised budget reflects a $43,000 deficit due to the revenue bond requirement.

“The difference is a charge we have to make for rate stabilization, which is a requirement from our revenue bond ordinance,” stated Richardson in an email. “That money will be available the following year in the fund balance.”

The city is in the process of evaluating its current utility rates. The rates are being reviewed by Andy O’Neill from Rural Community Assistance Corporation.

The council approved an ordinance allowing the city to levy a 2 percent utility tax for all natural gas subscribers. The increase will take effect 60 days after approval. According to City Planner Tom Richardson, this will make up for an estimated $12,000 loss of revenue.

The council also approved an ordinance amending the capital facilities chapter of the Millwood Comprehensive Plan. Projects such as the exterior painting of the water tower, replacing water mains throughout the city and replacing the boiler at City Hall were included in the six-year plan. The only capital expense in the 2012 budget is a lawn mower at $7,500.

Richardson presented a Water Utilization Efficiency plan drafted by Varela & Associates earlier this year.

Richardson said the city established two goals: reduce water usage by 1 percent annually over 20 years; and reduce distribution system leakage to 10 percent over 20 years.

According to Richardson, the city currently has 20 to 30 percent unaccounted distribution leakage.

Possible measures include rate increases that encourage efficiency, irrigation conservation information kits, consumer rebates for efficient appliances and pump pre-lube controls.

Councilman Kevin Freeman questioned the projected conservation outlined in the plan.

“What it’s looking like in this document, if we do everything, raise rates, put everything in, we are literally best going to save two-hundredths of a percent annually,” Freeman said. “I’m not sure what we’re doing.”

Richardson promised to follow up and request an explanation from the engineer.