A scheduled final discussion of the city budget caused some dissent among the City Commissioners Monday evening.
A scheduled final discussion of the city budget caused some dissent among the City Commissioners Monday evening.
After completing their agenda, then going into executive session, the commission finally reached budget discussions at 10:30 p.m.
Mayor Mike Fagg suggested they postpone the budget discussions because of the time.
Other commissioners disagreed with postponing it.
Commissioner David Chapin said they should have told city staff, who had been at the meeting all evening, that they were not going to hold the discussion, rather than keep them there so long.
Other commissioners also agreed although it was late, they should have told staff they could leave and, since they were still there, they could discuss any questions.
Fagg said he had a number of questions he had highlighted in the budget and felt another time would be better for the discussion.
The problem was they were almost out of time to hold discussions in order to get the state budget forms submitted by the required date. The commission will have to approve the budget at their first meeting in August.
Tammy Schaffer, finance director, said they did hold a workshop last week where only two people showed up.
"We're running out of time," she said.
Chapin said he was at that meeting, as was Commissioner Bill Young, and they sat there for 30 minutes before canceling the meeting.
Fagg said he was on his way out the door when he got a call at 4:10 p.m. that day and told him not to come over because there wasn't a quorum.
He was concerned there had not been more public meetings regarding the budget.
"I'm just saying we need to be very pro-active on the budget," Fagg said.
He said he had just received the final budget recently, but was told it had been in his drop box for three weeks.
"I'm willing to listen to any questions you have to ask," Chapin said. "Send the questions to Herb and let him research them."
Fagg said he did not have time during the work day to type out all of his questions, but said he would meet any evening to do city business, which is why he was elected.
"We have not had one evening meeting outside regular meetings," he said. "I said we need to start on this early."
Schaffer said they started on the budget in December with the CIP process.
"The City Commission has been getting information from staff from when we started," said Herb Llewellyn, city manager.
He said if Fagg didn't like they process, they needed to change the charter.
"The city manager will present a budget to the city commission," he said of that charter ordinance. "We've tried to schedule meetings, you know that. We scheduled last Monday's meeting that you didn't make because you gave us a list of days you could make."
Fagg asked the staff what the total expenditure was, but was told they did not have that number.
"It is all staff driven," he said of his concern with the budget. "I have got a lot of stuff marked in here. Herb, when you were hired, you said you were conservative. I would like to know where we're conservative in this thing."
Locke asked what changes there were to the budget and if they could listen to those.
"The budget reflects an increase in the amount we charge for water, sewer and trash," Llewellyn said. "Those will require ordinances in your code."
Fagg still had concerns about the actual expenses which were about $20 million compared to the budget set at $27 million, and wanted to know why there was such a difference.
"The state has a cap on the amount of money we can have in the bank," Llewellyn said. "That number is lower than what the city has. The City of El Dorado has forever budgeted to spend cash so they are not in violation of state law. We budget to spend all of the industrial revenue funds every year. I can spend it to nothing tomorrow if I choose to. However, normally there's a trust here that says I'm not going to spend that money without you all knowing about it. We budget to spend a lot of money that we have no intention of spending to stay in compliance with the laws of Kansas."
Fagg asked why they have a budget then.
"You can start shifting funds once it is set," he said. "I say trust but verify."
"When we budget $27 (million) and spend $20, that's not verifying?" Llewellyn asked.
"I think there is something wrong if there is that much difference," Fagg said. "I have a problem with how we go into that. The numbers in here are jacked up."
"You find me a line in there," Llewellyn said, "and I will tell you it's not jacked up."
Fagg said he wanted to know why the $7 million difference.
"The Industrial Mill levy is one," Llewellyn said. "I'm going to tell you that is one jacked up and you tell me how to make it better. We budget like every position in the city if full and know that is not going to happen. If you just budget for what you have and if it works out every employee is here all year, you're screwed. We budget for health insurance for everyone; if a position is open we budget for family."
Fagg said he could live with a 5 percent difference, but not a 35 percent difference in budgeted and actual.
Schaffer said the difference was in the contingency reserve funds that go along with each department.
"That's your fluff," she said. "That's your fund balance. That's what we will not spend."
"So the commission knows about how we're hiding stuff," Llewellyn said. "We added that line and that description last year. We wanted to make it more overt."
"I'm not saying you're hiding something," Fagg told Llewellyn.
Llewellyn said they have talked about the contingency reserves in their workshops, which are open to the public.
Commissioner Chase Locke brought the discussion back to the changes in rates, asking if they needed to go over those.
"If you don't want to raise the rates, then we need to adjust the budget and lower it," Llewellyn said.
Chapin said he would like to hear the rate increases, and the other commissioners agreed.
Kurt Bookout, public utilities director, talked about the increases in water and sewer, saying they have not had a rate increase since February 2006.
El Dorado is currently the fourth lowest city of similar size in the state for sewer rates. With a proposed 8 percent increase, that would move the city to eighth lowest out of the 30 similar sized cities.
Bookout said water was similar, although it is tougher to do rankings because of conservation rates and rate tiers.
"We've always had a declining block rate structure," he explained. "The more water you buy, the cheaper it gets. We're the only city I know of in the state that still has that."
In fact, cities are encouraged to have an inclining block rate structure.
Several years ago the city dropped off the lowest rate tier and now they are proposing dropping off the second tier so it is a flat rate. That would have some effect on the large water users, primarily impacting the rural water districts and the El Dorado Correctional Facility.
The rates will increase 8 percent for potable and raw water, as well as sewer rates.
On a $50 utility bill, residents will see about a $5 increase.
This is necessary due to expense of repairs.
"We're spending twice as much on infrastructure repairs and replacement and trying to get ahead of that deterioration of our infrastructure," Bookout said. "We're replacing more valves, we're replacing two-inch pipe and getting rid of the red fire hydrants."
All of this work is spending the reserves down though, as well as increasing fuel costs from $100,000 a year to $340,000 a year, which they had just been absorbing up to this point.
Like water and sewer, the last refuse rate increase was in 2006 as well. The system became automated in 2009, at which time the commission was told if they did not implement a fully automated system, they would have to increase rates.
"We assured the commission we would go three years with no increase (after automation)," said Brad Meyer, public works director.
They actually went four years.
Now the rate is going from $12.60 to $14.11 a month. In a survey of similar communities, El Dorado's current rate is the lowest. There will not be more than a 10 percent increase for commercial.
"We've had these work sessions; we've had opportunity to get numbers presented to us by staff," said Commissioner Nick Badwey. "Having time to review the budget and with the increased cost of doing business, it became apparent to me that each department head worked diligently along with Herb to find ways in their department to keep their expenses low to not ask for a mill levy increase from taxpayers. I appreciate that."
He thought Meyer's and Bookout's departments had done great to keep costs down.
"It speaks a lot to the work we do as a city and the staff does that we are still at the bottom of those lists on costs to end users," Badwey said. "Tammy and Herb, I appreciate the work you have done to keep expenses as low as possible."
Llewellyn responded by saying, "The big thing is your staff is a reflection of the services you want to provide. You don't have to do a thing. The budget that was presented was based on what my interpretation of what you're telling me you want, which is staffing levels and services about how you have been doing it. It's a reflection of your desires. I agree with Tammy. I pay taxes. I've got a home. It's my money too."
Badwey said they all needed to be commended for it.
"I would say that too," Fagg said, "but as commissioners we have a responsibility. We sign the budget. As it is presented to us, we need to come back with suggestions. That's our job to sit down and go through these type of things as a check and balance for the taxpayers in this town. Nothing against the staff; I know they do a good job."
Fagg said one of his concerns was economic development. He said the actual in 2012 was nothing; 2013 was budgeted for $295,000 and revised to zero; and the proposed 2014 budget is $345,000.
"That fund is budgeted," Llewellyn said. "What you looked at is what we spent. It's your verification of what I told you. We budgeted to spend all we had; we spent zero. I didn't spend a penny, you authorized it. The authorization is for staff to do it so you can react to an opportunity. We are trying to operate in a world created by other people. We budget to spend it all, but your staff chooses not to. So the revised is telling you that we don't anticipate spending a penny."
"Then why are we doing a 35 percent override in the budget?" Fagg asked again.
"If you don't want cash reserves, we don't have to do it," Llewellyn said.
He said some cities don't have that high of percentage in reserves, but they are larger cities so that percentage is a higher dollar amount.
Schaffer also pointed out the work that goes into the budget.
"Before you had even seen the first draft of the budget, these guys out here (department heads) cut 8 mills before it even came to you," she said. "That's doesn't mean we don't want to explain it to you or share the process, but it takes time and you all are busy."
Chapin then suggested a motion to meet from 11 a.m. to 2 p.m. Tuesday to go over the budget.
"I have a job tomorrow," Fagg said. "I can't do that."
"I've got a job too," Chapin responded.
"What's wrong with evenings?" Fagg asked. "I'm a public servant."
He said it wasn't right to hold meetings during the day when the public couldn't attend.
"I made an offer," Chapin said. "It wasn't about you."
"I can't be here in the day," Fagg responded.
"I can't be here in the evening," Chapin said.
"You can't be here any evening?" Fagg asked Chapin.
Chapin said he could not.
"If you are all happy with the budget, let's go that way and it's 4-1," Fagg said. "If you guys are happy with it, I would say congratulations."
"I wouldn't say that's the way to handle it," Chapin said.
Young suggested since Fagg had requested a meeting from 7 to 10 p.m. Tuesday night he use that time to e-mail his questions to Herb, so Herb could send out answers to everyone.
"If we can't all meet together and discuss it, I don't think we need to do it," Fagg said.
"I don't understand why you don't want to present questions to staff," Chapin said, saying he talked to Llewellyn several times to get his questions answered.
Fagg said it was their job to go over the budget.
The budget will be submitted on the state forms, then come back before the commission in August.