‘Tight’ budget proposed at workshop
After shaving more than $4 million off the initial $5 million budget shortfall, the Minden City Council met Tuesday morning for its second budget workshop for the 2018-19 fiscal year.
The first workshop on May 31 brought the deficit down to roughly $855,000. This time, City Clerk Michael Fluhr and Mayor Tommy Davis presented the council with a budget more strict on expenditures. In fact, Fluhr said the proposed budget would leave roughly $109,000 in usable funds for the city to hold back as “savings” for future needs.
“It’s a very tight budget this year,” Davis said. “We have scrubbed it very close. We still left in some big projects that need to be done, some equipment purchases, and some street projects that desperately need to be done. But there’s no fluff in it at all –it’s very, very tight.”
Despite a few changes and at least one cut still under debate, the proposed budget emerged from the workshop still roughly $168,000 in the clear.
The only revenue increase mentioned was budgeting $300,000 for annual true-up refunds from SWEPCO. Fluhr began the meeting by telling the council that other than that, they could not expect to balance the budget through the revenue side.
“There is no room for additional money to spend,” he said. “The revenue resources for the city are exhausted. We cannot tax more. We cannot raise utility rates. There is no additional resource money.”
One of the most talk-about cuts of the workshop was the topic of health insurance benefits for city employees. Health insurance expenses have increased by the maximum five percent each year for several years. However, Fluhr said this year that increase was taken out of the budget, introducing a savings of $52,000 for the city.
“What this means though, when next year comes around, the talk with the health insurance people must go one of two ways: lower the benefits in order to keep the rates, which means changing to a different plan, or go with the actual increases, which would mean going into our reserves,” he said.
The council discussed for some time the plausibility of moving employees to a cheaper plan with fewer benefits.
“That’s what the private industry does – every time the insurance goes up, we cut benefits,” Councilman Mike Toland said.
Other options were also discussed, such as lowering the percentage of health insurance covered by the city. Fluhr said lowering to 60% from the current 75% would save the city half a million dollars.
The council kept the removal of the 5 percent increase in the budget as proposed. The city’s health insurance will be renewed April 1, 2019.
“In April they [the mayor and council at the time] are going to have to take a hard look at what’s going to happen with health insurance,” Davis said.
Another roughly $50,000 cut that garnered much discussion was the proposed removal of economic development funds for a fiber optics consultant and associated legal fees.
While this item has already been on this year’s budget, no one at the workshop knew exactly for what it was being used. The council brought in Economic Development Director James Graham to explain.
“A lot of small communities now know that fiber optics is the new infrastructure of the 21st century – it’s no less important than a new road or bridge or airport,” Graham said. “We interviewed several fiber optics technicians, looking for one to advise us on a franchise agreement. Right now we have a network specialist waiting to see if we’re going to move forward.”
This agreement was initially in partnership with Camp Minden, but Graham said Camp Minden had to back out for legal and financial reasons.
Several concerns were raised about the fiber optics plan and the need to spend money on a consultant. Toland said as many as three private companies already have fiber optics infrastructure installed in Minden, and some department heads present were concerned that there is simply no more room for additional fiber optics in the city infrastructure.
Graham said there is always the possibility that the city could enter into an agreement with one of those companies instead of needing more fiber installed.
“If you continue down this path of not having a fiber optics network that you can get revenue from, it’s one more difficulty to attracting manufacturers, because it’s too expensive for them,” he said. “Plus you don’t control your own infrastructure.”
In the end, it was decided that Graham should come back for a workshop with the council where he can further explain the need for the aforementioned funds. Until then, they will remain out of the budget.
As previously reported after the first workshop, pay raises for the mayor, chief of police, and council members have been proposed, and each of these made it through the new budget.
“Without these, there will be police officers making more than the chief, and there will be city employees making more than the mayor,” Davis said. “And I don’t think that’s right.”
These raises will not affect Davis himself, who will not be running for reelection.
The city council pay will be raised from $10,800 a year to $12,600.
The previously reported increases in recreational sports fees were kept in the budget, and previously suggested increases to facility rentals, such as the Civic Center, were not included.
“When we start talking at length about $1,500 items, you know it’s a tight budget,” Davis said after the workshop had been adjourned.