City finance committee submits budget fix
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The Havre City Council and one of its committees met Thursday night, both in an attempt to iron out the $139,200 budget shortfall the city faces for the year.
The city's budget problems come from a state law which restricts the amount of money they can levy in taxes for one year, Lowell Swenson, city finance director said today. If the finance committee's proposals get council approval, the reported budget shortfall will be eliminated.
At the Council meeting, the group transferred $88,000 from a backup fund into the general fund, putting a major dent in the budget shortfall. This special meeting was finished almost as soon as it started, with the council unanimously approving the only resolution on the agenda without discussion.
The $88,000 came from a revolving fund set up to match any expenses made for special developments or improvements in Havre.
A special improvement district fund is created whenever something is developed or fixed by the city. When something large, like a subdivision, is created, or when a basic improvement, like paving a street or fixing a curb, is done, the city creates a special improvement district. Money is raised for the district by levying higher taxes in the area.
The revolving fund is set up to cover the expenses in the event that some residents don't pay their taxes, and is supposed to have enough money to match the amount needed by the special district.
The money has been accumulating in this revolving fund for some time, Swenson said, but has gone unnoticed until now.
"By looking at the account, I saw there was more in there than necessary," Swenson said Thursday night. "It's kind of a one time fix in the budget."
Heavy cuts and changes were still needed to balance this year's budget. The Council's Finance Committee hammered out their proposals in about one-half hour's time.
In the largest proposal, the finance committee proposed a levy for $41,600 to pay for the city employee's insurance increases.
Tom Farnham, chairman of the finance committee, said city employees' insurance rates have not been raised for 10 years. The $41,600 is only half of the actual increase in insurance premiums; the employee's themselves are expected to pick up the rest.
If the proposal is approved by the council, the other half of the total insurance increase will be paid for by Havre tax dollars. Swenson said meeting the cost of rising insurance payments is allowed by the law restricting city levies.
Department cuts include a $3,500 travel fund used by two department heads for the city. Swenson said that two department heads are chosen each year on a rotating basis and are budgeted a trip to a national training meeting and convention. The two departments slated to take trips this year were Fire and Finance, he said.
The other major proposed cut is $6,100 that would come from a vacation and sick leave fund for city employees who are leaving their positions or retiring from them. This is a regular item in the general fund, and is only used by those employees who have sick leave and vacation days saved up.
Farnham said that this cut was risky, but that it was one of the few things left to do.
"Most of it is bare necessities," he said.
Those employees who do retire or leave this year will each have a percentage of the $6,100 taken out of their account.