Iola City Council members have rejected the city’s 2012 budget, citing a number of concerns Monday with the $28 million spending plan.
The rejection — which became official after only three council members voted to approve the 2012 budget — prompted the city to schedule an adjourned meeting for Monday to hammer out a spending plan. The rejection also means the city will not have submitted its budget plan for 2012 by Thursday’s state-mandated deadline.
Iola City Administrator Carl Slaugh noted, however, that the city is unlikely to face any form of penalty from the state. Still, he said, the city must square away the council’s concerns so the budget can be handed to the county as quickly as possible.
Council members cited a number of concerns with the budget as presented at Monday’s meeting.
Councilman Kendall Callahan presented a worksheet citing what he identified as more than $5 million in “adjustments” to the spending plan after it was approved for publication at the council’s July 25 meeting.
Callahan’s worksheet cited at least 308 such adjustments totaling $1.4 million, plus another $2.8 million in other changes; $87,897 in overstatement of a loan payment to the Kansas Department of Health and Environment to help pay for the city’s water plant; removing $489,000 from a wastewater fund reserve; and removing a budget line item listing $200,000 in Federal Emergency Management Agency reimbursements from the 2007 flood, which should have been removed after 2008.
“The biggest concern I have is that there is no documentation that gives us any security that these numbers are right yet,” Callahan said.
Slaugh noted that even with those adjustments, the city’s overall spending authority had not changed.
The discrepancies, Slaugh said, center on the fact that the spreadsheets presented to council members are independent of the ledger figures submitted to the state, and in the past contained formulas to determine spending rates.
The budget presented to council members this week included year-end figures from 2010 that had been entered manually to ensure their accuracy, Slaugh said.
“I’m not pointing fingers, but I know this is going to ruffle some feathers,” Callahan responded. “I don’t trust the figures.”
Fellow councilman Ken Rowe was more direct.
“I would like to know if the mistakes were due to pure sloppiness, or if it was something more serious,” Rowe said.
Slaugh replied that while mistakes had been found, there was no evidence of sloppiness or malfeasance. What’s more, past budgets have been audited with no signs of either, outgoing City Administrator Judy Brigham told the Register.
Council member Steve French, who also voted against the budget, said his concerns were with conversations during the budget process in which it was suggested Slaugh and Brigham go back to department heads to determine if budgets could be pared further. That was not done, he said.
“I do not feel comfortable passing a budget without the correct numbers,” Council member Beverly Franklin added.
NOT ALL of the council members shared those concerns.
Councilman Joel Wicoff noted that while there were plenty of adjustments within the budget, the overall spending level was largely unchanged from years past, and was down in some areas.
“We’re all looking at what’s being spent,” Wicoff said. “And we will all try to do better. But I don’t see where holding up the county (by not submitting a budget) is going to help our city.”
Approving the budget, Wicoff added, does not obligate the city to spend money. Rather, the budget sets the spending limits and puts in place a mill levy for property owners.
“How do you know we have less spending?” Callahan replied.
The mill levy talk also raised Rowe’s ire.
Slaugh noted the proposed budget contained an ad valorem tax levy of 38.168 mills — a figure that may change once Iola’s final assessed valuation is determined this fall — up about three-tenths of a mill from 2011.
“I had no idea we were talking about a tax increase,” Rowe said, urging Slaugh to consider all cuts necessary to remove what equates to about $12,000 from the budget.
The difference in property tax levies for the owner of a $50,000 home would be $2.87.
ONCE THE spirited debate ended, the vote to approve the budget failed 5-3, with Wicoff, Don Becker and Scott Stewart voting in favor; Callahan, Rowe, French, Franklin and Jim Kilby opposed.
An adjourned meeting has been scheduled for next Monday at 6 p.m.
In the interim, Slaugh said he would go back in prior budget years to determine exact year-end budget figures to help determine spending trends in individual funds.
The year-end funds for 2010 have been “triple checked,” City Clerk Roxanne Hutton said, to ensure their veracity.
Slaugh said he would take the council members’ other suggestions under advisement as well.
Next Monday’s meeting will be at the New Community Building at Riverside Park. The public is invited.