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Lebanon city budget in red again - Genderal fund saddled with $700K deficit
Sep 05, 2006 12:00 am
Lebanon's general fund finished with a deficit for the second year in a row, which councilors and Mayor Don Fox blame largely on unexpected expenses such as $1 million in cost overruns on the landfill remediation project.
The city finished $700,490.39 in the red for the fiscal year ending June 30. And despite the $1.3 million in overspending noted in the city's budget, luckily higher than expected revenue kept the deficit below the million-dollar mark.
And while the past year's deficit is significantly lower than the $2.2 million in overspending racked up the year before, councilors describe the deficit as a problem which needs to be addressed.
Ward 6 Councilor Kathy Warmath bemoaned the unexpected expenses thrust upon the Council.
"You can only have so many catastrophies before it hits your bottom line," Warmath said Tuesday.
Ward 3 Lebanon City Councilor William Farmer also pointed out the general fund loss does not include hundreds of thousands of dollars in deficit spending in the gas department. He, in fact, warned the city's cash reserve fund could be in trouble if the city continues to spend more than it takes in each year.
A total of $1.3 million was removed from the city's general fund with $1 million paying for the landfill remediation, which city officials later admitted they knew about for several months before informing councilors.
"The real problem was we didn't have open accountability for several months after the supervision knew there was a problem," Farmer said.
The remaining $300,000 settled smaller accounts of overspending including almost $100,000 to pay for fuel overruns.
One account remaining unresolved is a potential gas rate hike.
The Council is re-addressing the situation after Fox's comments in June on WANT-FM's "The Coleman Walker Show" saying the city does not need to raise rates stopped the move for an increase. While final gas department figures were not available, officials say the department could experience a $300,000 loss this fiscal year if a rate increase is not approved.
But Fox did not seem to think the city spending more than it received in one year was a problem, especially since overruns came largely from unexpected expenses.
"I didn't feel bad about it at all because virtually every year you will have a surplus," Fox said. "Every year the surplus is added for that year. Is a surplus for burying with you in your casket?"
Finance Commissioner Hal Bittinger said Tuesday the general fund reserve sits at $3 million. He has said in previous months $5 million would be a comfortable balance.
However, Ward 1 Councilor Alex Buhler is not as comfortable with the excess expenditures.
While acknowledging some costs – such as the rapidly rising cost of fuel over the 2005-2006 fiscal year – can't be avoided, Buhler said keeping councilors informed could help them get a better handle on finances before having to vote on a particular item.
"Ever since I've been up there, it's been, 'we've got to do this,'" Buhler said. "… Of course, we don't know about it until we have to vote on it. It's frustrating because I'm trying to save taxpayers money, so I'm looking for waste.
"… If you find four or five places the money's just being wasted, if you cut that out. It may be $5,000 or it may be $500,000 by the time you add all that up."
"We have a lot of waste in city government like the debacle of hiring felons and what that has cost us," Farmer said. " … (T)hen we had to go and look how many felons we had and how many we're going to have, and there's been thousands of dollars spent finding out how bad that situation was and how to fix it."
Fox said imposing higher fees on developments and installing sewer and water taps could make up some of the difference.
"We're the best deal in the state, and that's why everybody's flooding Wilson County right now," Fox said. "… There just comes a time when fees have to be increased, and developers … are going to have to make a little bit more of an investment to make money."
Staff Writer Jason Cox can be reached at 444-3952 ext. 45 or by e-mail at firstname.lastname@example.org.