City budget OK’d; utility scrutinized
The Baldwin city budget for the 2004 fiscal year was approved by the Baldwin City Council Monday night, but not before some close scrutiny by resident Michael C. Green.
In a 5-0 vote, the council approved a budget for 2004 with net expenditures at $10.2 million, down from $15.4 million in 2003, and a mill levy of 34.309, 4.122 mills lower than 2003.
The 2004 mill levy was an additional 2.265 mills lower in the general bond and interest fund than originally expected because the state reviewed the budget and suggested a removal of $50,000 which former city administrator Larry Paine had budgeted as a contingency amount.
But during the public hearing for the budget, Green thought the council needed to take a closer look at the electrical utility and the amount of money it was making.
"The utility is something that needs to make money," he said. "I think it has a potential to be a good income-producing entity. I do not want it to continue to operate as an entity on a break-even basis."
He said he was concerned the 2004 balance showed a zero in the unencumbered cash balance for Dec. 31 category for the electric utility.
"What I would like to see for the proposed budget for 2004, instead of a zero, make it 350,000," he said. "I would like to see the electric utility make 350,000."
In 2002, the unencumbered cash balance on Dec. 31 was $347,757. The estimated cash balance for 2003 is currently $213,773, but is expected to change.
City Clerk Peggy Nichols said the electric utility is making money, but the cash balance can't be known for 2004 until the end of that year.
She said the city has to budget enough to cover unexpected expenses, because once the budget is set, the city cannot spend more than what's budgeted. But she said that doesn't mean the budgeted amount is used.
"We need to budget high enough to take care of everything we need to," she said. "That doesn't mean we'll spend it, but you still budget for it."
Mayor Ken Hayes agreed.
"We allocate line items larger so we can pay expenses if we have to," he said.
The money not spent at the end of the year is the figure in the unencumbered cash balance, Nichols said, and is considered the amount the electric utility made.
Council Member Ted Brecheisen said Baldwin also sees other benefits of the electric utility other than in a monetary figure.
"You pay no tax levy to support the street lights. That's a benefit. You pay no tax levy to support the ball field lights. That's a benefit," Brecheisen said. "I know other cities where they have a mill or two to pay for that.
"It's all kind of a balancing situation," he said. "I think we do have benefits you can't see in dollars and cents in the cash reserves."
Green said he just wanted to see the electric utility make money, and allow the community some say on how the money is budgeted.
"I would like to see the people in the community having the ability and choice to see where that money goes," he said. "We need to have some say in where the money is allocated."
In other business, the city council:
- Approved in a 5-0 vote a 12-percent increase to Baldwin retail water customers, which will increase the water rates from $4.52 to $5.07 per 100 cubic feet of water.
Utility Director Terry McKinney said the increase is needed to fund the capital water system improvement project and to cover an increase in cost for water treatment from the city of Lawrence.
- Met in executive session for 25 minutes for attorney client privilege. No action was taken following the closed session.