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Budget meetingLew Levin, right, Unified Government chief financial officer, went over UG revenues at a budget workshop July 18 at City Hall. (Staff photo)
The Unified Government Commission on July 18 changed the proposed maximum county mill rate in order to move funds around at a later time, but commissioners said they eventually wanted the total amount to remain the same as previously proposed.
In a unanimous vote, the commissioners increased the maximum mill levy rate for the county from 36.45 to 39.45 mills, but they said their intent is that the total county mill levy rate will remain at 36.45. They increased it in order to have flexibility and to later consider moving money around inside departmental funds, according to commissioners. The 3-mill change is equivalent to about $3 million.
While the commission may reduce the mill levy rate that was set July 18, it cannot increase it over the maximum set without going through additional budget hearings and republishing the budget, according to UG officials.
The change occurred after Commissioner Jane Philbrook asked if the commission could increase the amount of money within individual departmental funds listed in the budget, such as increasing the parks department fund, after the maximum is set.
Jody Boeding, UG chief legal counsel, said the statute refers to maximums set on funds, that no amount could exceed the amount levied. Each department fund is listed by a dollar amount and a mill rate in the budget.
Commissioner Hal Walker said the commission had not had enough time to go over the budget yet.
UG Deputy Administrator Doug Bach suggested adding more mills to the general fund, which could allow the UG to distribute funding to any one of the department funds during the year.
The change was reflected in the revised budget, not in the parks fund, but in the general fund.
If there is an increase in one part of the budget, and the commission keeps its intent of maintaining the originally proposed mill levy rate, then that could mean another area of the budget might be cut if there are no new other sources of revenue. However, there were no discussions about areas to cut at the July 18 meeting.
The commission left the city portion of the UG’s budget the same as proposed on July 15, at 45.415 mills.
Mayor Mark Holland told the commissioners that on Aug. 1, they should pass all 11 budget actions, including separate motions for the Community Development Block Grant program, the Board of Public Utilities payment-in-lieu-of -taxes (PILOT) fee, the sewer service rate, the budgets and several other items. One of the new budget actions is a resolution of intent committing to fund the YMCA downtown community center.
Holland said that if they did not pass all of the items, then the funding mechanisms would not be there for the budget. “If you vote against the funding mechanisms, you are voting against the budget,” he said.
Commissioner Ann Murguia pointed out that a commissioner could be against the sewer tax increase, but be in favor of another way to get the funding.
The commission has not really reached consensus on the PILOT fee, Holland said. If the majority votes for the budget and not the PILOT fee, he said, then they really didn’t vote for the budget, as there would not be funding in place for the budget.
The UG Commission is tentatively planning to hold a joint meeting with the BPU board on Thursday, July 25, at which time the PILOT fee may be discussed. There is a budget work session scheduled at 5 p.m. July 25.
UG staff members stated at the July 18 meeting that had the UG not had new revenue sources the past several years, the revenue situation would be much worse.
Lew Levin, UG chief financial officer, said a significant portion of the UG’s loss in property valuation was attributed to the loss of machinery and equipment tax revenues. The machinery and equipment tax funding was 17 percent of the UG’s budget in 2006, and is only 8 percent now, according to UG officials.
UG officials said that between 2006 and 2013, there has been an estimated $40 million loss from the machinery and equipment tax; a $20 million loss in real property valuation since 2008; an $8 million loss in the state not funding the local ad valorem tax; and a $7.4 million loss in the state eliminating funding for the machinery and equipment slider reimbursement.
Valuation of property declined during the recession years, affecting tax revenues. The loss of the machinery and equipment tax revenues was offset by the increase in valuation in the Village West area, according to staff. The Village West area now makes up more than 10 percent of the county’s valuation, according to UG officials.
The increase in the sales tax a few years ago has really stabilized the finances, according to UG staff.
During a discussion July 18 on CDBG funding, Commissioner Tarence Maddox criticized CDBG funds as going too much to salaries and demolitions.
Commissioner Murguia said she had been trying to get a project from her district for a CDBG grant, but had never figured out how to get the system to work. Also discussing potential projects from their districts were Commissioners Maddox and Townsend. One commissioner noted that several projects were brought to the commission at the earlier public hearing, but the projects were not put into a format for the commission to evaluate.
Commissioners discussed how they had brought up projects but had been told funds were already allocated, and were unable to find out information about it.
Commissioners decided to further discuss the issues of setting procedures for CDBG projects at a Standing Committee meeting.
On Monday, July 22, the UG Commission plans a budget work session after the Standing Committee meeting, to discuss public safety budget issues.
The UG budget is scheduled to be adopted at 7 p.m. Aug. 1. The last public hearing before the budget adoption, with a time for public comments, is scheduled at 5 p.m. Monday, July 29, in the Commission Chambers, City Hall, lobby level, 701 N. 7th St.
The commission also met in a closed meeting July 18 to discuss litigation.