City proposes $23 million budget for fiscal 2014

A nearly $2.4 million grant request will increase Mountain Home's operating budget for the third straight year as city leaders outlined their $23.1 million budget proposal.

A public hearing on the fiscal 2014 budget will begin at 6 p.m. Aug. 12 at the city council chambers on South 3rd East Street next to city hall.

Like other communities, Mountain Home operates under a fiscal year plan that runs from Oct. 1 to Sept. 30. The proposed budget reflects a $640,000 increase --a jump of roughly 3 percent -- from the city's current operating budget.

Pending approval by the city council, the city's budget would mark another consecutive year of growth since the state's economic downturn in 2008. The city virtually eliminated all discretionary spending for nearly four years until the economy here began to improve.

According to city treasurer Paula Szafranski, most of the proposed budget shows just a very little change from recent years.

"When the department heads handed in their budget (requests), they didn't ask for anything more," Szafranski said. "They tried to keep them either exactly as it was the previous year... or decreased them a little."

For the first time in five years, the proposed budget plan would provide limited raises for city employees. During the economic downturn, the city was only able to provide its workers with two cost-of-living increases totalling less than 3 percent.

"We have fallen behind in regards to where we are with other communities in terms of what our employees are earning," said Mayor Tom Rist.

Even with the pay increases, it could take years for the city to match the amount other communities pay their employees, the mayor said.

Reviewing the specifics of the plan, the mayor emphasized that some budget line item changes are tied to grants and loans the city submitted and received to make needed improvements to local infrastructure.

For example, the city is working with the Federal Aviation Administration to secure approximately $2.4 million in grant funding to rebuild the runway and taxiways at the municipal airport here.

"It's a project we needed to have done," the mayor said.

While it's not known whether the city will receive the grant, the operating proposed budget for the new fiscal year needs to include it just in case.

In addition to the airport grant, the budget plan reflects a long-range plan to overhaul South 18th East Street, which includes installing a traffic light at the intersection of American Legion Boulevard.

While it's possible that project could start in the new fiscal year, it's possible that funding from the state could be delayed by at least one more year, the mayor said.

Meanwhile, the city's proposed budget will reduce enterprise funds by $1.2 million with a $900,000 decrease in capital improvement funds. However, the mayor emphasized that those decreases are not funding cuts but reflect the completion of two large-scale utility projects in recent months.

The first involved a grant from the Department of Environmental Quality to overhaul the water transmission lines running beneath the west side of Mountain Home. The other was funded by the Federal Emergency Management Agency to install a new storm water drainage system on East 8th North Street.

Looking at other aspects of the proposed budget, the city's general fund is expected to fall by roughly $141,000. Those funds cover everything from the city's police and fire departments to its administration and parks offices.

According to Szafranski, loss of money in the general fund actually represents a shuffling of expenditures in some city departments with a bulk of that money shifted to other line items.

Those changes will help the city make expected purchases in coming months, including a new vehicle for the city fire department.

Local civic organizations expect to receive continued support from the city in the coming year, although some of them will see fewer dollars when the new fiscal year begins. Among them is the Mountain Home Transit Service, which will take a $2,000 cut, leaving it with $20,000 from the city.

The Mountain Home Youth Center will also take a $2,000 cut in local subsidies from the $7,000 it received in the current fiscal year. However, it does restore a majority of its funding, which was entirely cut in fiscal 2012.

Meanwhile, the Mountain Home Senior Center will receive $5,000 in fiscal 2014. It's about $500 less than the center received during the current budget cycle, which is used to support Meals on Wheels and other programs for local senior citizens.

The budget plan comes as the city sees continued signs that the local economy is starting to improve after housing and commercial development came to a near standstill roughly five years ago. The number of building permits continued to increase this year, which is helping the city grow at a steady but considerably slower rate that it did prior to the 2008 housing market crash.

"We're cautiously optimistic with the way things are going," Rist said.

However, there are at least two factors that could seriously affect local funding, he added. The first involves changes adopted by the state legislature earlier this year involving personal property taxes paid by businesses and corporations. It's still too early to determine where those tax code changes will seriously affect local revenue, according to the mayor.

"It's our understanding that we're not going to be damaged that much," he said. "We will be getting the same (state revenue) that we got last year."

At the same time, the city is still concerned whether federal budget cuts at Mountain Home Air Force Base will affect the local economy. The city relies heavily on dollars from the local base, the mayor said.

While Congress restored money to allow the nearby Air Force base to resume training for its aircrews, a majority of the installation's civilian workforce are still dealing with mandatory furloughs. It essentially cut the salaries of approximately 420 government workers at the base by 20 percent.

"Sequestration is still looming out there," Rist said.

The mayor remains cautiously concerned regarding the city's economic situation when the new fiscal year begins in three months.

"You are never fully 100 percent certain on what's going to happen," he said.