One of the certainties in setting a city budget well in advance of the upcoming year is that there will be surprises down the road, Iola City Administrator Matt Rehder noted Monday.
To wit, when Iola City Council members set their 2022 spending plan in the summer of 2021, they had little inkling prices for such things as natural gas and other supplies would skyrocket over the ensuing 18 months.
About all a city can do, Rehder concluded, is “to be ready for unexpected stuff to happen.”
Those added expenditures required year-end budget amendments, which is a regular occurrence every December.
But this year’s amendments were a bit larger than in years past.
The Council, in the summer of 2021, budgeted $2.8 million for natural gas sales in 2022.
By year’s end, that figure will be closer to $5.9 million. Electricity sales, projected originally at about $9.6 million are now expected to reach $11.6 million. Water sales should be about $200,000 over projections, from $306,000 to $506,000.
The city also must add about $200,000 in budget authority to its stores budget and sales tax fund, as well as put $23,900 into its special highway fund.
It’s worth nothing that while the city spent significantly more for those commodities, it also received more from its customers to cover those costs.
Council members voted, 6-0, to approve those transfers, with members Josiah D’Albini and Carl Slaugh absent.
Prior to the vote, Rehder said he expected the high natural gas prices to stay at elevated levels into the heart of the winter months.
If there’s one silver lining for what could be a costly winter for consumers, it’s that Iola has once again purchased gas in advance of winter and will use a portion of its reserves if prices spike, Assistant City Administrator Corey Schinstock said. Such a strategy helped Iola avert financial disaster in the winter of 2021, when a brutal cold snap caused a historic spike and cost some communities millions.
“It’s definitely a concern, but it’s out of our hands,” Mayor Steve French said of the high gas prices. “We can’t control the markets.”
AS FOR budget planning, Rehder noted Iola already will have an early surprise in 2023, stemming from recent improvements to the Oak Street water tower.
As part of the renovations, the city must replace a series of rafters from inside the tank after initial hopes to repair them were unsuccessful.
“Those rafters weren’t in great shape,” Rehder said. “We hoped to refurbish three of them, but it makes more sense to replace all eight.”
