Council approves $5.3 million budget hike

Mountain Home's mayor and city council approved the tentative budget for FY05 and set a public hearing on the proposal for Aug. 9 at 6 p.m. in council chambers.

From this point on the budget can be lowered but not increased. After responding to comments from the public, the mayor and council will consider the final appropriation ordinance at the Aug. 23 council meeting.

The FY05 proposed budget is $16,400,971 -- $5.3 million higher than last year.

In April when the mayor and council discussed priorities for the next city budget, there were a number of issues at the top of the list: maintaining adequate water for drinking, fire protection and irrigation; fixing an aging and inadequate wastewater collection system; increasing golf course revenues enough to meet balloon payments in the near future; and updating a five-year-old employee compensation plan and meeting staffing requirements caused by growth.

During budget discussions, another issue was added to the list. Officers from the fire department expressed fear that volunteer firefighter safety and the city's fire rating (which saves homeowners money on insurance rates) were at risk because three of the city's fire trucks are over 20 years old. They requested a lease/purchase of two new fire trucks.

The $5.3 million increase in the proposed budget includes $4.25 million in loan proceeds from the Department of Environmental Quality for improvements in the city's water and wastewater systems. The improvements were envisioned during the term of Mayor Dave Jett and are now ready to move forward. Loan proceeds and first payments caused an increase of $1,425,000 in the water budget and an increase in the wastewater budget of $3,310,000. The loans will fund major essential improvements to the city's aging water and sewer systems and will require fee increases in both water and sewer service to repay the loans. Options for fee increases are not complete at this time, but are expected to be considered by the council in early fall, after the final data on summer water use has been received.

"Another attention-grabber is the golf course," said city treasurer Leanna Taylor. She explained that total revenues and expenses for the course are projected to be $640,000 higher, "or more than double last year's." A major reorganization in the golf course operations, which is planned but is not final, caused the increase, she said. "The reorganization changes the golf course clubhouse from private contractor-operator to city-operated, under the management of the parks and recreation department, which means we'll pay out more in expenses but also receive more in revenues."

Under the plan the golf pro and clubhouse staff would become city employees. New staffing reflected in the budget includes the golf course clubhouse reorganization as well as new positions in the parks and recreation department.

Several other city positions will upgrade due to increased responsibility or changed duties and all employees will receive increases based on market adjustments made to the city's compensation schedule. All changes were made with input from an independent human resource consulting firm.

"Revenues from property taxes increased by $137,055, or 5 percent," said Taylor. "Of this, 2 percent was from new growth and construction." She explained that based on the level of increase in the city's market value, the levy rate may go up slightly, or not at all. "Citizens' city tax bill is dependent upon any changes in their property's assessed market value. Although the levy may increase slightly this year, it will still be lower than its peak of .008848, nine years ago." The city's property tax levy has declined almost every year over the past nine years because city taxes have increased at a slower pace than market values and new construction.

This year's budget includes additional items scheduled for purchase during the fiscal year -- the lease/purchase of two new fire trucks as recommended by the fire department officers; upgrades of law enforcement radios; two new police cars and mobile data computers; a security system at the library; money set aside for possible purchase and improvement of the old El Rancho property on Jackson Street above the underpass; plus various maintenance projects and equipment purchases.

Citizens who have questions or wish more details of FY05 budget, are invited to call the city treasurer at 587-2104.