City continues work on budget
City departments have turned in their budgets for the coming fiscal year. Now City Administrator Bill Kelly has the same challenge he does every year – finding the money to cover those expenses.
Designing this year's budget is proving to be more difficult than previous years, since Osceola is lacking a city clerk. Kelly sits at the former clerk's desk with papers strewn around him and crunches numbers out loud.
Assembling the budget has fallen on the shoulders of Kelly and deputy clerk Carrie Benda. The two are currently working to get a draft plan together. Usually, work sessions with the city council start in January, but they have been pushed back.
With the budget plan still in the works, the city council will be left with weeks to evaluate the city's expenses.
Kelly said he isn't worried about the council making it through the work sessions in time to hold a public hearing and finalize the budget.
"We're a little bit behind schedule," Kelly said. "But I have a highly experienced council."
Councilman Jim Kimball said he also isn't concerned.
"I think we're in good shape right now," he said. "The majority of what we have to do is already in place. We have bonds that have to be paid back and personnel that need to be paid."
Council member Peggy Mateer said the budget is one of the council's main jobs. At a city council's meeting Jan. 19, Mateer said she was concerned the council wouldn't have enough time to look over the budget.
WHERE THE BUDGET STANDS
Exact numbers aren't known, but according to Kelly Osceola might be better off than some governments around Iowa.
Despite an economic downturn, the city's financial situation is nearly unchanged from the previous year.
The city's total budget is an estimated $10 million.
"It's about what it was last year," Kelly said. "We're not anticipating any major changes. We're hoping to get through this year and the next year without any major modifications or changes."
The city did lose some revenue from the state, but this didn't dramatically affect the budget.
"Some of these state revenue programs have been phased out over the years," Kelly said. "It's a minimal impact to us."
Kelly estimates the city will lose $3,600 from the cut of the Homestead Tax Credit.
"Is it the end of the world? No, it's not a big loss," he said.
The general fund will see a decrease of $69,000 after the city's taxable value fell $5 million.
"I was somewhat surprised by that," Kelly said, adding some capital projects will have be cut in order to make up for the loss.
The city's water treatment plant is requesting $448,000 for improvements to the facility. The street department asked for $118,000 for a project. Kelly said these numbers will most likely be reduced.
Kelly said he is also concerned about health insurance premiums, which increased by 13 percent. This translates into an estimated extra $50,000 a year, Kelly said.
"We were anticipating rate increases from 25 to 35 percent," he said. "So it was less than what we anticipated so that was good."
Health insurance is estimated to cost over $370,000.
The city picks up 90 percent of its employees insurance, depending on what type of coverage the employee selects.
Kelly is in the process of looking at alternative health plans – a suggestion made by unions.
With the added position of the city's building inspector, the city has started to see an increase in revenue from building permits and enforcing codes.
BUDGET MAKEUP
Property taxes make up the majority of the city's $3.2 million general fund, but the city also sees revenue from the casino, sales tax and other smaller taxes, Kelly said.
Kelly said he will use staff meetings to go through the departments' budgets to see where expenses can be cut.
"It's important for them to know what the other departments' budget needs are," he said. "That gives them a bigger picture. They need to understand it's kind of a balancing act of measuring those competing requests because we know there isn't enough dollars to go around for all the requests."
Osceola's budget is made up of 14 major departments or expenses and many smaller items. The police department has the largest budget with an estimated $700,000.
This year, the department asked for a 5 percent increase for two patrol cars.
The biggest expense for the city, personnel costs, makes up 80 to 85 percent of the budget.
"That's typical of any government," Kelly said.
But the ultimate questions is whether employees will see an increase on their paychecks. Kelly said the council will have to look at that through multiple work sessions.
Although he isn't expecting to freeze wages, he doesn't foresee a huge increase in employees' pay.
Work sessions are scheduled throughout February. A public hearing is scheduled for March 9.
