GREENFIELD — City officials won’t be able to pay for quite everything they had hoped for this year because of cuts that had to be made to the 2014 budget.
The Greenfield City Council Wednesday agreed to a plan that removed a new mechanic position from the budget, dipped into cash reserves for employees and chopped funds from street construction to make ends meet.
Clerk-Treasurer Larry Breese has been working on the plan for the past month, ever since he received word from the Indiana Department of Local Government Finance that the revenues the city had projected will not be as high as they thought.
The biggest blow to the city’s budget was in the fire territory fund. The city had planned for nearly $4.8 million in expenses, but the state only approved $3.7 million – a difference of $753,000.
Breese said the cut was because of the 2011 decision to reduce the tax rate for Center Township residents. The city objected to the cut in 2012, but an Indiana Tax Court judge still hasn’t rendered a ruling on what Greenfield Fire Territory’s tax rate should be.
The cut to the city’s fire territory is especially confusing to city officials because there was no reduction in 2013.
“I don’t know why they didn’t touch it last year and did this year,” Breese said.
Still, he said there’s enough money in the city’s Local Option Income Tax fund to make up for the difference.
“The last thing we wanted to do was cut personnel,” he added.
The income tax fund has a balance of nearly $506,000 and brings in an additional $81,500 a month. Breese said there will likely be money left on hand in the fund to pay for new police vehicles this year, but no proposal has been made yet on new cars.
Another large budgeting change happened to the city’s general fund, which was reduced by nearly $483,000.
Breese said the city will drop a new mechanic and associated equipment; the council had wanted to open up the new position and department within municipal government to maintain and repair vehicles. The cut saves a total of just over $149,000.
But Mayor Chuck Fewell points out that city and county officials have been talking about collaborating on such a position, so the cut made sense.
“Any time we can partner and have the advantage to go to the taxpayers, I think it’s worthwhile,” Fewell said.
Also making up funding cuts in the general fund is a reduction in the insurance line. Breese said the city had planned for a 10 percent increase, but the actual increase in insurance costs this year was only 2.9 percent. The city will also dip into a cash reserve in employee medical insurance to make up the rest of the general fund cut.
A small cut had to be made to the city’s street maintenance fund. Breese said $5,500 will be slashed from maintaining streets this year, but Fewell points out that the city will have more money on hand this year than usual anyway because the state Legislature passed a law to provide more funding for local infrastructure.
The council unanimously approved the budget changes. Fewell said afterward that while it’s disappointing the cuts had to be made, he’s glad the city has cash reserves on hand to make up the differences.
Breese said he will meet with a representative from the state later this year to better understand why the changes had to be made. For the most part, hard-to-project revenue was the most vital flaw in the budgeting process this year, and Breese said it’s difficult to know how to plan.
“You’re wanting to maintain and provide services, and you want to do it as reasonably as you can, so you’re not grossly affecting the taxpayers,” Breese said. “Every year seems to be difficult because legislation changes, and funding formulas change. It’s become more complicated and more intricate than it used to be.”