City increases 2004 mill levy
The De Soto City Council agreed to publish a proposed 2004 budget that will essentially maintain current spending levels while increasing the property tax levy a projected 1.05 mills.
The process that led to the $5 million published budget started with City Administrator Greg Johnson presenting the City Council with two different proposed budgets last month. One budget slightly decreased this year's mill levy at the cost of freezing employee salaries, eliminating the part-time fire department employees hired this year to give the city 24-hour coverage, and budgeted no contingency funds.
"The Council all agreed that wasn't a desirable option," Johnson said. "We were able to avoid major cuts in several areas and maintain the part-time positions in the fire department."
The published budget has a mill levy of 24.918, compared to a 23.861 levy in the 2003 budget. Those living in the part of the city served by Johnson County Rural Fire Department No. 3 will actually see their mill levy drop from 18.92 to 18.616. The 2004 city tax bill would equal $430 on a $150,000 home in the part of the city served by the De Soto Fire Department.
To keep the mill levy increase as small as proposed, the Council had to dip into a $2.5 million utility account created when the city sold its electrical distribution system. The account was used to supplement the law enforcement fund by $200,000 and fire department fund by $60,000, Johnson said. The Council agreed the fire department, which does not serve the entire city, should repay the electrical utility fund in coming years.
The law enforcement fund presented the Council with difficulties because of a mistake made on official state budget forms last year, which financed the department about $100,000 less than proposed. Unaware of the reporting mistake, the Council agreed to an $84,000 increase in the level of service contracted from the Johnson County Sheriff's Office for 2003. The agreement added an eight-hour "power shift" that guaranteed an officer would be in the city, not just in a district that included much of Lexington Township.
As a result of the budget squeeze, the Council was forced to end the enhanced Johnson County Sheriff presence for 2004, Johnson said. The sheriff's office and the city were discussing ways to provide needed coverage for the city, he said.
Other belt-tightening measures include less than anticipated employee pay raises and cutting the wages of the part-time fire department employees by 50 cents an hour, Johnson said.
While the proposed 2004 budget maintains this year's spending, it looks much different on paper. For example, no property taxes will be used to finance debt reduction in 2004. Johnson explained the debt fund was healthy enough that the Council agreed this spring to retire some of the city's outstanding debt early. In addition, the Council determined the water and sewer departments should pay off debt they incurred, Johnson said.
But most significantly, the city's 3/4 cent sales tax and other revenue sources are now designated to specific accounts created with the Council's approval of the capital improvement program, the city administrator said.
With that reform, the city's excise tax and CDBG grants funds no long pass through the city's general fund. That change, Johnson said, made it more difficult to develop a budget that didn't significantly raise the mill levy. The official state budget form basically arrives at the mill levy by subtracting all non-property tax revenue from general fund expenditures, Johnson said. Therefore, the more non-property tax revenue sources in the general fund, the less property tax needed to support it.
That problem was compounded by a $600,000 decrease in the city's assessed valuation because of the late approval of several abatements, Johnson said.
Council members expressed satisfaction in Johnson's efforts on what was his first budget as administrator. Councilman Emil Urbanek said the changes that made the budget more difficult were overdue.
"Really this was the first time we did a budget that I felt like I understood what we were doing -- I felt like I did in the past, but this year I really did." he said. "I think we'll be able to look at it in eight months and see where we stand. Before, everything was in the general fund and it was hard to track.
"I think if citizens want to keep track of the budget, they will be able to do that, too."
Councilwoman Mitra Templin, who won her seat in April, was without an historical perspective but agreed with Urbanek's assessment.
"You would like to reduce the mill levy and offer more services, but I think it was a good effort considering the circumstances," she said. "I think Greg did an excellent job."
The Council will have a public hearing on the published budget at its Aug. 21 meeting before taking final action.
The published budget does not set mill levys. Those become official in October when the Johnson County Clerk's Office figures mill levys based on the county appraiser's final assessment figures.
The published budget does establish expenditure limits that can't be exceeded without Council approval of a republished budget.