With the public budget hearing only a week away, the city of Clintonville is still wrestling with its 2015 budget.
When the Finance Committee met, Monday, Nov. 10, it was informed by interim City Administrator Chuck Kell the key factor in the budget is how the city closes the deficit between expenses and revenues.
Kell said as of Monday afternoon, the deficit was at $180,189.
Kell presented three suggestions to help close that gap. He admitted they would not close the entire deficit.
His first suggestion was to reconsider the employee health insurance. He presented the committee with three options.
As of Friday, Nov. 7, the health insurance cost in the budget was $423,790. It includes employees paying 15.5 percent of the health insurance premium, and the city paying 100 percent of the HSA and HRA costs.
The first option he presented was the same as the current plan expect employees would pay the first $500 of the HSA portion. This option would save the city $12,000 in the budget.
The second option included employees paying the same percentage of the premium, but employees would also pay the first $500 of the HSA portion, as well as the first $500 and last $1,000 of the HRA portion. This option would save the city $24,599 in the budget.
The third option included employees paying 20 percent of the health insurance premium, as well as the first $500 of the HSA portion. The city would continue to pay the entire HRA portion. This option would save the city $22,340 in its budget.
Kell said when the HSA was first introduced quite awhile ago, the theory was that the city would pick up the entire cost initially, by over time, employees would pay part of that cost.
“That hasn’t been implemented to date,” Kell said. “Today the city has continued to pay that entire amount.”
Kell’s second suggestion was to impose an across the board cut to departments. He said this couldn’t be done to all the funds because of required obligations for some departments.
He said if the council implemented a five percent cut to all the major departments, which include fire protection, public works, park and rec, general government and police protection, it would allow the city to apply about $174,000 to the deficit in the budget.
“Some of those cuts are going to be tough for departments to find. They’ve already made some fairly significant cuts in their budgets,” Kell said.
He warned that a cut like that to the police department could mean the loss of an officer or dispatchers. A cut like that in general government would probably mean the loss of a staff person in city hall.
The third suggestion Kell offered was the closing of city facilities. He said closing city facilities would not close the entire deficit but it would get the city part of the way there.
Council member Bill Zienert asked if it was possible to use the undesignated fund balance to fill in the deficit amount with the stipulation that it would be for a short period of time. He said this would give citizens time to provide input regarding cuts to the budget and city facilities.
“In a perfect world, let’s be candid, we would have started six months ago with this discussion,” Zienert said.
He said if the fund balance was used to balance the budget for only the first part of next year, it would buy some time for department heads to figure out how to restructure services. He said that cuts will require cuts in services.
Zienert added that citizens deserve time to be involved in the budget process.
Kell said Zienert had a good idea. He said the idea would give the city time to study the options that are available and provide the public with the opportunity to give input on those decisions.
“With community input, I think that would be a great way to handle it,” Kell said.
He added that if the council went with this suggestion, it would have to start doing the research as soon as the city’s budget is passed.
The tax rate was also discussed. The current proposed budget includes a tax rate of $8.62, which is a four cent increase over last year. Committee chairman Mark Doornink said he thought there were ways the city could raise its general fund levy that would be in line with what the city previously did. Going this route would increase the levy by 28 cents over last year. He said this represents around $64,000.
“What I’m saying is let the people of 2015 pay for 2015, not move it forward. Using fund balance moves it forward,” Doornink said.
Near the end of the meeting, Doornink made a motion to put the first employee health insurance option back in the budget to save the city $12,000. Zienert seconded the motion.
“This plan has been in place for 20 years to implement some kind of changes to the HSA. I think this is a modest one (change),” Doornink said.
He said he’d rather see all employees pay a little more instead of seeing an employee lose their job.
The motion passed the committee 4-1. Council member Jeannie Schley voted no.
The public budget hearing is scheduled for Tuesday, Nov. 18 at 5:30 p.m. at the Clintonville Community Center.