City council discusses 2019 budget

City Clerk Unita Vance discusses ways to make up the general fund deficit for 2019 with the City Council and department heads

Part one of two

MONTE VISTA— Monte Vista City Council held a work session with department heads last Tuesday, Oct. 30 to discuss the municipal budget for 2019, with councilors debating the importance of balancing providing services or maintaining the general fund with no deficit spending. The conversation carried into the Thursday, Nov. 1 city council meeting, where the budget passed on first reading with a 3-2 vote.
City Manager Forrest Neuerburg opened the work session by praising the work of the department heads both in maintaining the 2018 budget successfully without a finance director for the first part of the year and in combing through their individual budgets to find what savings they could. Neuerburg stated the departments all largely underspent their budget and “are aware of the fiscal realities.”
“Anika [Velasquez, director of the Monte Vista Kids Connection] for example can make a nickel look like a dime,” Neuerburg stated of her work, similarly reflected in the other departments, which are all “trying to do the best job we can with limited funds.” Neuerburg also praised the work of other departments like IT for resourcefulness in savings, finding the projector for the council chambers at almost no cost to the city. The MVPD also received an award of $10,000 for a drug bust conducted three years ago with that money being used for radios.
Finance Director Jennifer Signs explained the variations through different parts of the year, including the drop in revenue at the end of the year, were largely expected and accounted for. Signs explained overall the water and sewer funds are largely healthy and the general fund balance at the end of 2018 is projected to be roughly $30,000 higher than what it was projected at the end of 2017. Signs stated the city is doing their best and following best practices.
Neuerburg proposed two philosophies for council to consider if they want to get the general fund deficit to zero, either going through each line item, which he believed staff had already done thoroughly, or taking a set percentage out of each budget. Entering the meeting, council expected to be looking at deficit spending out of the general fund of roughly $102,000, but a Conservation Trust Fund (CTF) transfer, largely from state grant funds, offset that by about $50,000. Neuerburg stated there were other positive developments including an additional $7,000 unexpected savings due to a grant for the airport for $16,667 and $6,000 for the maintenance of the Guzlow building that did not have to be budgeted for in 2019 and an additional $5,000 for the Monte Vista Kids Connection raised by the annual Charity Poker Tournament in October, leaving council with a deficit of only about $34,000.
Overall the proposed 2019 general fund budget is split with 39 percent going to the police department, 24 percent going to the public works department, 23 percent going to administrative costs, nine percent to recreation and five percent to transfers with a projected fund balance of $548,000.  
Councilors asked several questions of Public Works Director Rob Vance about the enterprise funds and public works expenses. Councilor Kathleen Ellithorpe inquired about the possibility of putting a meter on the golf course after seeing what she considers to be excessive water use that disregards the contributions made by the city and the $40,000 costs budgeted for it out of the Parks and Recreation department. Vance stated a water meter for the golf course would be roughly $12,000, with Neuerburg stating a lease or an MOU with the course would be separate discussion, although he would look into Mayor Dale Becker’s suggestion of exploring the possibility of a CTF grant for the golf course.
Councilor Kathy Lorenz asked about Proximity Malt meeting their discharge requirements, which Vance confirmed they were and although they were at roughly 85,000 gallons per day in October, they had almost none in May and June so are overall averaging out.
Neuerburg also stated the city will be giving a three percent wage adjustment increase to employees and will likely have to change insurance providers in order to meet the 15 percent of the cost. The cost increase for health insurance would otherwise make that impossible and consume the wage adjustment for employees. Neuerburg explained he and the city were trying their best to meet the goals of the strategic plan and do right by their employees.
Ellithorpe stated the significant deficit reduction is impressive, and she is not comfortable with cutting funds to any of the departments any further, especially considering how thin the PD is stretched and how much the departments have already worked to accomplish the reduction.  
Councilor Gary Johnson stated he agreed this left them with a “viable structure,” but noted “it’s a guideline; it’s not set in stone.” Johnson stated he believes revenues will continue to increase and by the time council considers the 2019 mid-year budget amendments, they could be in an even better financial position.
Lorenz disagreed, “I think you guys [city staff] have done a great job… I still think as a government entity you need to have a balanced budget.”
City Clerk Unita Vance stated the city will have to draw the line at what services can be provided. “We all have to draw the line; you guys will have to draw that line,” she told council.
Neuerburg stated he believes the city will have to be cutting at the bone. “We’ve cut the fat; we’re at the meat now.”
Lorenz stated “At some point this won’t be a sustainable model” and explained there would have to be hard decisions made. Ellithorpe asked what Lorenz would suggest, with Lorenz suggesting council look at the recreation department. “Are we going to do that or take care of our streets and police?”
Signs confirmed it was accepted within her profession that 2019 is likely the last year a spending model similar to the budgeted one can be sustainable unless municipalities generate significant amounts of additional revenue or make more cuts. Lorenz pointed out the city budget accounted for an inflation rate of 6.9 percent, stating city residents are facing the same inflation and are not likely to appreciate a tax increase for additional city revenue.  
Lorenz pointed out the deficit of $34,000 was about what they have paid consultant Ron Douglas and are budgeting for more out of the 2019 budget to pay him. Johnson quickly answered that Douglas is an investment in the community and that mprovements can already be seen.
Becker stated he believed Douglas had staked some claims to things that were there before, “but that’s a separate discussion.”
Lorenz stated she did not want to be seen as a proponent for cutting the recreation department, but it is budgeted for $132,785 and only brings in about $40,000 through adult sports and other revenue sources, thus costing the city roughly $90,000. Lorenz asked if there was any way to reduce some of the department’s costs, like the $3,000 in rental fees, which Unita Vance answered wasn’t likely. Vance explained she had gone to the school district before asking about reduced facility use fees and was laughed at.
Rob Vance pointed out the school district is smart in their methods; the city should analyze how often they let groups use Ski-Hi for free or discounted rates. Stampede, for example, has a lot of hidden man hours for the public works department, Vance explained, including two straight weeks of nearly every staff member working to prepare for the event. Neuerburg explained he and Signs are working to create a trend analysis of events compared to the sales taxes generated around the events to determine if the events are offsetting their costs.
See more in part two in next week’s Monte Vista Journal.

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