As is the norm at this time, the Newton City Commission's attention is focused on setting the budget for the coming fiscal year — a lengthy process that continued in a work session prior to Tuesday's regularly scheduled commission meeting.
"We're kind of pecking away at this budget issue," said Newton city manager Bob Myers.
Making the issue more complicated this year is the tax lid that was thought to be in flux throughout the year, with the legislature ultimately taking little official action to change it (save for a few amended exemptions). Myers lined out how the lid applies to the city's budget, though, in regards to what officially is exempt — like increased revenues produced by new construction, personal property, changes of property use, expiration of tax abatements, etc.
Included in the list of exemptions as well are increased revenues that will be spent on expenditures mandated by federal/state law, special assessments and bonds — with Myers using the potential new police facility as an example. Were the city to pay cash for such a project, it would not be exempt from the tax lid, though if Newton were to utilize a bond issue on said project — and make a one and a half mill raise to pay for the potential bond — then it would be exempt. As stated, Myers and the commissioners saw that as encouraging local governments to borrow money and accrue debt.
Other issues Myers brought up with the current process as pertaining to the tax lid included the budget calculation worksheet released by the state department, seeing some issues with the processes it recommended — like the proposal to not factor the fire, EMS and police departments into the overall budget.
"I don't think it's a valid approach," Myers said.
Among the issues Myers sees with the entirety of the process, he stated a belief that the tax lid is open to a lawsuit, but he does not necessarily want the City of Newton to take up that banner. For the moment, Myers noted he is trying to work with all the computations laid out and create a legal budget at the same time.
Currently, the budget lined out has a deficit the commission will have to try to correct. Identifying where there are increases in cost that push the city over what the projected revenues will pay for will be crucial to that process. While Myers noted the city has avoided a deficit budget the past two years based on projected increases coming in under budget, he noted the entity still has to plan for the "worst case scenarios."
Projected increases on personnel expenses, employee benefits and health care costs were some of the factors adding to the deficit on the budget worksheet Myers presented Tuesday night. To get expenditures to match revenues and eliminate that deficit, at least theoretically, Myers noted the projections could be decreased and some other funds could be shifted into the general fund — with those recommendations helping bring a projected $823,308 deficit down to $316,072 at the current phase of budget planning.
Hypothetically, Myers said it would take about one mill to make up for that deficit, but that, too, is in flux at this moment and can't be known for sure until the final figures on assessed valuation and other financials are received.
"That's the next piece of the puzzle," Myers said.
Drawing from equipment reserve funds — given some key needs among city entities — and moving funds from other departments was not something the commission was in favor of, especially in regards to shifting money out of the Street Division and into the general fund.
Commissioner Glen Davis raised the question of what would happen if the proposed $200,000 in Federal Fund Exchange Funds for that department were shifted and the city had another scenario like the sewer issues on Meridian to deal with in the coming year. Mayor Barth Hague also stated concerns mirroring a practice the state government has taken up in recent years.
"That's not good fiscal management," Hague said.
Questions were also raised about the final decision on the process regarding what happens in the case of the city commission increasing the budget over the amount allowed by the tax lid, with Myers noting the increase would then have to officially be put to a vote.
"It's just not a good scenario," said commissioner David Nygaard.
Once Myers has the necessary calculations — which he noted is the goal by the next commission meeting — there will be a clearer picture of what needs to happen with the 2018 budget.
Already known is the fact that with the tax lid, the deficit the city is facing and the staffing needs that remain, there is a lot for the commission to try to work around in balancing the 2018 budget.
"We're trying to be tighter with our budgeting now," Myers said, "which means we're not going to have quite the room for error."
In other business, the city commission:
Approved the consent agenda, including the minutes of a previous work session, a requested street closure for the Headin' for Home 5K and Fun Run and the appointments of the following: Sgt. Mike Yoder to the substance abuse board, Gloria Arellano, Fabiola Flores and Shafiqu Hason, as well as Aaron Austin, to the law enforcement advisory panel and Willis Heck to the Newton Recreation Commission.
Was notified of a ceremony scheduled for 7 p.m. June 21 at the Meridian Center to recognize the accomplishments of Newton High School athletes in spring sports (i.e. soccer, track).
Approved the transfers of land for the Prairie Fire and Cottonwood Crossing Rural Housing Incentive Districts.
Approved a lease agreement with Midwest Aircraft Services for Hanger B at the Newton City/County Airport.
Learned of plans that were approved by the Public Building Commission to renovate bathrooms at both Kelsch Field and Centennial Park, with a request for a loan from the city to help the PBC move those plans forward and begin construction in 2017. The Newton City Commission approved the PBC's revised master plan and proceeding with the design and funding agreement, while also awarding a bid to Dondlinger (the lowest bidder) for additional work on the sewer at Centennial Park.
Received a draft of revisions to cemetery rules and regulations, with Director of Public Works Suzanne Loomis noting changes have already been proposed based on feedback from local funeral homes and the final proposal will be brought back for action at the next city commission meeting.
Heard an update on the progress of the water and sewer master plan, with Loomis noting a list of projects will be included on the plan she will bring before the commission in July based on several capacity issues gauged with the sewer lines and other items to be addressed.