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City makes final budget proposal adjustments
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By CHUCK CLEMENT, Staff Reporter
| 08/25/2009 |
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The city commissioners made final adjustments Monday night to Madison's 2010 budget, which brought expenses in line with projected revenues and will prepare the city for operating under an $18 million budget next year.
The commissioners held a budget meeting after Monday's weekly session to discuss cutting some proposed expenses and transferring others to fall under the umbrella of the second-penny sales tax.
The cutting started last week when the commissioners decided they need to start making budget adjustments to eliminate an estimated $730,000 budget shortfall. They agreed to reductions in some areas, such as some annual payments into reserve funds used to purchase new equipment.
Monday night, City Finance Officer Jeff Heinemeyer told the commissioners that last week's shortfall was reduced to $75,000.
Commissioner Scott Delzer made a proposal to balance the budget by placing $50,000 for rock wall repairs in Memorial Park and $35,000 for sidewalk construction under second-penny sales tax revenue. Delzer said he had reviewed some city projects with City Engineer Chad Comes, and they had determined that the rock wall repairs and sidewalk construction fell into the category of capital improvements.
During the initial round of budget cuts, the commissioners agreed to not make annual payments in 2010 to some reserve funds, including ones for improvements to storm sewers, the restricted-use site, tennis courts, playground equipment and ballfields. They also cut the reserve fund payments for some capital projects such as street bridges and curb & gutter.
The city has penciled in support payments of $63,000 to the Madison Area Chamber of Commerce, $140,000 to the Lake Area Improvement Corporation and $100,000 to the Forward Madison program.
The commissioners discussed how much support they should provide to the electric fund partly to prepare for future electricity rate increases. Madison's electric utility was required this year to adjust to a 13 percent rate increase from the Western Area Power Administration and a 6 percent rate increase from Heartland Consumers Power District.
Commissioner Karen Lembcke brought up a proposal to transfer $81,000 from the sewer enterprise to the electric fund and raise electricity rates by 9.5 percent. Commissioner Dick Ericsson said a 9.5 percent increase would just cover the increased expense for buying electricity and would not pay for any improvements needed for the city's electrical system.
"I think right now we just can't run at a loss," Ericsson said.
Lembcke outlined two other choices in which the 2010 budget could contain a 10 percent electricity rate increase and an $81,000 sewer fund transfer or a 10.3 percent rate increase and no transfer.
Ericsson told the other commissioners that he preferred explaining to Madison residents that the city was maintaining a viable utility system instead of looking for stopgap measures to keep electricity rates low.
Delzer said that by enacting the $81,000 transfer, "We're budgeting for a loss this year."
Ericsson submitted his opinion that a 10.3 percent electricity rate increase with no fund transfer was the better direction to take -- a proposal to which the other commissioners did not object.
During next week's budget meeting, the commissioners plan to review an updated budget summary and prepare for the first reading of the 2010 municipal budget in early September. The city has the responsibility of passing a final budget before the end of next month.
Mayor Gene Hexom pointed out that none of the budget numbers are final and city officials could make amendments during the next 30 days.
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