The calendar year may have changed, but the budget issues facing the city of Clintonville remain the same.
When the city council passed the 2015 budget Nov. 18, it included language to have the Finance Committee work with departments, administration and citizens to replace the undesignated fund balance with like amounts by March 31.
When the Finance Committee met Monday, Jan. 12, interim City Administrator updated the committee as to what he has done so far regarding the budget.
Kell said he had discussions with Justin Mc Auly, director of the Parks & Recreation department, about the city’s outdoor swimming pool and the Rec Center building. He asked Mc Auly to prepare a report for the council that includes the pros and cons of closing those facilities. The report was also to include specific savings that could be achieved.
Kell also asked Mc Auly to contact the Clintonville School District about its aquatic facility. Mc Auly was to find out if the city and the school district could work together to make that facility available to the general public as a substitute for the city’s outdoor pool. Ways to subsidize the cost of using that facility for some of the residents was also to be explored.
Mc Auly was also to ask the school district about the potential of joint purchasing for copy paper and cleaning supplies if it would save both entities money.
The committee was also informed that Kell met with the city’s department heads last week to discuss the budget situation.
“There’s some concern by some of the department heads that some of the decisions that were made in the prior budget year that are causing a problem for 2015, mainly the fact we lost a significant amount of revenue by losing the expenditure restraint,” Kell said. “There’s concern that they’re now being asked to make cuts to address that shortfall in 2015.”
Kell said the department heads thought they couldn’t make any significant cuts unless it included city staff.
“That was a big concern there,” Kell said.
Kell said he told department heads to look at their budgets, as they may be required to come up with more cuts.
The discussion about the swimming pool referendum, that was scheduled to be discussed at the Tuesday, Jan. 13 council meeting, was concerning to Kell.
“That’s moving pretty fast right now, I think maybe too fast,” Kell said.
Food pantry
Kell said he met with representatives of the food pantry the prior week, but since that time he’s heard that there is a new option out there.
“They may agree to help fund improvements for the Rec Center for handicapped access and a new furnace and that type of thing for the ability to stay in the Rec Center,” Kell said. “If that’s the case, we’re not going to be closing the Rec Center.”
He said he didn’t know what to think about that situation.
“I was under the impression that the food pantry might consider moving out of there, and we’d be working with them on a site for a new facility. Then I find out just the opposite plan,” Kell said.
Committee member Phil Rath asked how the food pantry can afford to make improvements to the building when it said it couldn’t afford to pay rent for a downtown building.
Kell said he didn’t want to elaborate too much because the press was at the meeting, but he said there was a donor who is willing to either help the food pantry move into a different building or make improvements to the current building.
Health insurance
The city had also hoped to save money by switching to the state’s health insurance plan for its employees. That savings may not be available, Kell said.
City of Clintonville Clerk/Treasurer, Peggy Johnson, told the committee that part of the problem is the history of the city’s health insurance. She said there are also two levels of insurance, one for large employers and one for small employers.
She said the city is currently under the threshold to be considered a small employer. This would subject the city to underwriting to obtain insurance.
“The premium that was projected to us is only an initial estimate,” Johnson said. “Once we go through the underwriting process they may end up with a surcharge.”
There is a $250 charge to go through the underwriting process if the city is a small employer, Johnson said.
“If we are a larger employer, over 50 employees, then it would be $2,400,” Johnson said.
Johnson said there are some guidelines that could push the city into the large employer category. She said she will have to do more research to determine if the city is a small or large employer.
“I don’t know if the savings is going to be there,” Kell said.
2015 budget
With this new information, Kell said it looked like the potential cuts the city was previously looking at would not be available. This would create the need for potential cuts from departments, Kell said.
“I think it’s going to be darn difficult to come up with the number of cuts, at least for the entire amount,” Kell said.
Committee member Bill Zeinert summed up the new information, “The infrastructure reductions we had on the table are more or less off the table. The insurance savings we thought we might be able to squeeze out in the second half of 2015 is much more dubious than we previously thought. …And the department heads are telling us we really are talking about staff reductions and at this point nobody is willing to put forth a plan as to what those staff reductions would have to be.”
When discussing personnel cuts, Doornink said a loss of city services has to be analyzed before any cuts are made.
Zeinert added that no department should get a pass on having to make cuts.
Furlough days were also discussed.
Zeinert acknowledged that any of these cuts could be “dead on arrival” once they reach the city council, and he didn’t want to waste the department heads’ time by coming up with cuts if that was the case.
“Anytime it’s been a difficult decision, we as a group have not been of one mind and I don’t know that that’s going to change drastically in the next 60 days,” Zeinert said.
He added that he’s still against using the fund balance to balance the budget, but he’s more against wasting people’s time.
Doornink agreed, saying he made motions during the budget process that would cut the amount needed from fund balance, but each motion failed.
Committee recommendation
Kell asked the committee to come up with the dollar amount that needs to be cut from the budget.
Zeinert said there are three amounts. He said the first amount would be $176,000 if the city didn’t want to use any funds from the fund balance. The second amount would be around $47,000 if the city wanted to fund the one-time expenses in the budget with the fund balance. The third amount would be zero if the city doesn’t want to make any cuts and use the fund balance to cover the entire shortfall.
He said the impact on the fund balance needs to be analyzed, as well as the long-term and short-term ramifications of using fund balance.
“That comes as a cost of some sort as well,” he said.
Kell stated he hoped the departments wouldn’t get hit too hard with cuts.
“Unfortunately Chuck, the reality is that you are looking at the city getting hit really hard,” Zeinert said. “That is the fundamental problem that we have done as a council, a fairly empty job of avoiding.”