Utility fee increases also discussed
City Council identified Hillsboro Family Aquatic Center and museums as possible places to cut city budgets Tuesday during a work session.
City Administrator Larry Paine said he is about $60,000 away from needing no tax increase in 2010. That is about a four-mill difference, and one mill is $1 of tax per $1,000 of valuation.
Reaching that point required using many one-time cash infusions, Paine said. He expects about a $400,000 loss of revenue in 2011. The 2010 budget also includes no raises, he said.
Easing into an increase would be better financially but would be a political problem for council members, Paine said.
Council member Bob Watson was surprised how little of the city budget comes from property tax.
Council member Shelby Dirks asked if the city could sell any unused or seldom-used equipment.
“I’m not convinced we’ve done everything to tighten our belts,” he said.
Selling equipment would narrow the gap but not close it, Paine said.
The budget projections include $62,000 expenses for the museums and no more than $1,000 revenue.
A museum isn’t expected to be a money-making endeavor, council member Byron McCarty said.
The museums could be better marketed to increase some revenue, but council member Kevin Suderman was skeptical.
“I don’t think you can market your way out of that hole,” he said.
The pool is another major loss for the city. In 2010 it is expected to cost $109,000 but only raise $44,000 revenue.
Minimum-wage increases have exacerbated the problem, Paine said. Raising entry rates would reduce some of the loss.
The pool also could cut costs, Mayor Delores Dalke said. Lifeguards are provided with swimsuits instead of providing their own. She also said the pool shouldn’t purchase concessions from Schwann’s, which are more expensive than grocery stores.
Municipal pools almost never pay for themselves, Paine said. Property taxes are used to subsidize the cost for low-income users.
Watson said he would prefer to see cuts to the museums than the pool. He said he enjoys museums, but children get more use from the pool.
Utility costs a possibility
Dalke suggested another possibility to improve revenue. Hillsboro has 1,148 electric meters at a hookup cost of $5 per month plus the cost of electricity. She said that rate is low compared to other places.
If the hookup fee was increased to $9 per month, the city would receive another $55,000 of revenue per year, as an example.
The city has another 968 water meters, at a base rate of $27.06 per month. If the fee was raised $1, the city would collect another $11,616 per year.
The city has taken several steps to cut costs before looking at revenue. As an example, water department employees receive time off instead of overtime pay.
The council will meet Aug. 4 for the public budget hearing. Time will be set aside at the meeting for a closed session to discuss personnel issues.