Archive for Wednesday, July 8, 2009

De Soto takes added hit

City Administrator Pat Guilfoyle gave the De Soto City Council his proposed 2010 budget days after new valuation numbers showing more than a 5 percent loss in the city's valuation .

City Administrator Pat Guilfoyle gave the De Soto City Council his proposed 2010 budget days after new valuation numbers showing more than a 5 percent loss in the city's valuation .

July 8, 2009

City Administrator Pat Guilfoyle last Thursday presented the De Soto City Council with an historic 2010 budget.

The $7.52 million budget was noteworthy in two aspects: It was the first without a city fire service, and it was prepared in very challenging economic times.

Those times got even more challenging July 1 with the Johnson County Appraiser’s Office’s most recent valuation estimates. The estimates revised the city’s overall valuation down from the 2.3 percent decrease estimated in March to a 5.7 percent decrease.

That new estimate reduced with value of 1 mill to $54,931, Guilfoyle said. The value of a mill in the 2009 budget was $58,251.

The valuation decrease and a downturn of nearly all the city’s revenue sources increased pressure on the mill levy, with would be 19.247 mills should the city council approve the budget as recommended.

However, there is more to the story because of the merger of the De Soto Fire Department and the Johnson County Rural Fire District No. 3 into the new Northwest Johnson County Consolidated Fire Department. In 2009, the mill levy for that part of the city served by the De Soto Fire Department was 27.335 mills, with the fire service fund contributing 10.128 mill to that levy (the city’s mill levy in the part of the city served by the rural fire district was 17.207).

The committee coordinating the fire service merger also prepared a budget for publication with the release of the valuation estimates. The consolidated department’s first mill levy will be 9.666 mills.

Guilfoyle said that confirmed the assumption those in the current city fire service area would see a slight benefit on their property tax bill from the merger and those in the current fire district would pay a bit more.

With the elimination of the fire service fund, the property taxes the city collects now supporst three different funds — the general fund, law enforcement fund and debt service fund.

The general fund budget would increase from $349,349 in 2009 to a proposed $549,147 in 2010. Guilfoyle said the increased cost of utilities, particularly the city’s electrical bill, accounted for much of that increase. Mill levy support for the general fund in the 2010 proposed budget was 9.997 mills.

Although the actual dollar amount of the law enforcement fund is projected to decline from $394,000 in 2009 to 385,000 in 2010, its mill levy would increase from 6.745 to 7 mills because of the city’s loss of overall valuation. That budget was based on discussions with the Johnson County Sheriff’s Office about its 2010 contract, Guilfoyle said.

“The sheriff’s office has been very good to us,” he said.

The city’s debt service fund was scaled back from $261,000 in 2009 to $124,000 in 2010, with a corresponding reduction in mill levy support from 4.475 to 2.25 mills.

The city adopted a continuous five-year capital plan three years ago that allows the city council to adjust projects on a yearly basis as conditions warrant. With capital fund sources such as the excise taxes, water and sewer development fees and building permits down significantly in the current recession, Guilfoyle’s proposal would only fund $448,000 of the $1.495 million in capital projects previously envisioned for 2010. Of those proposed, $250,000 would be debt funded and $198,000 — including the use of the $100,000 2010 Community Development Block Grant to replace downtown waterlines — would be paid for in cash.

Programmed street repaving and chip and seal account for most of the remaining CIP spending.

His budget left about $86,000 for other possible projects, Guilfoyle said. He purposed the council with two new members review what to do with that money and the CIP list, which he listed as one of four goals of the proposed budget.

One of the other goals anticipated a comment from Councilman Ron McDaniel that the city needed to move forward with needed improvement at the Sunflower water treatment plant.

When the city council voted in February to upgrade the Sunflower water plant, water department supervisor Clarence Brunk said the critical needs were the replacement of water lines from the plant to the Sunflower water towers and from the towers to 103rd Street, the installation of new electrical transmission lines and purchase of a backup generator.

City engineer Brungradt estimated the cost of the improvements Brunk identified at $1.7 million.

Since that time, Rep. Dennis Moore succeeded in getting a $500,000 earmark for the water plant’s improvements placed on an appropriations bill now working its way through Congress.

The other two were to protect the city’s financial stability and monitor and respond to changing economic changes.

The council will review the proposed 2010 budget for suggestions at its July 16 meeting. Numbers will be tweaked based on council comment with the budget set to be approved for publication Aug. 6. A public hearing on the 2010 budget and its final adoption is scheduled for Aug. 20.

One bright spot in the budget review was the performance of the city’s utility funds, which Guilfoyle said were performing well.

A 3.5 percent increase in water rates and 6.2 percent increase in sewer rates were penciled in for Jan. 1, 2010, but the city administrator said with a strong second half to the year those increases could be revisited.

There would be no need to increase the refuse rate, Guilfoyle said.

The council will review the proposed 2010 budget for suggestions at its July 16 meeting. Numbers will be tweaked based on council comment with the budget set to be approved for publication Aug. 6. A public hearing on the 2010 budget and its final adoption is scheduled for Aug. 20.

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