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NL council gives unofficial approval to FY 11 budget

NORTH LIBERTY– While minimizing a proposed tax levy increase and avoiding deep cuts to anticipated expenses, the North Liberty City Council managed to agree on a 2010-11 budget that seemed to satisfy everyone at the table.
Last Tuesday, Feb. 16, during its second budget work session, the council settled on a property tax levy of $11.20 per $1,000 of taxable valuation, a decrease of 35 cents from the levy proposed two weeks ago.
The savings was made possible by some slight changes to the proposed budget, including postponing the purchase of a $22,000 vehicle for the building inspection department, reducing the city’s contract with the Johnson County Sheriff’s Department by $32,000 and reducing the transit levy by 14 cents.
Another measure, suggested by City Council member Terry Donahue, was to reduce the anticipated surplus in the city’s general fund, taking it from $184,000 to around $50,000.
Councilor Gerry Kuhl agreed.
“I have a problem with asking the citizens for $185,000 we are not going to need this fiscal year,” said Kuhl. As a tax accountant, Kuhl said, his firm is seeing on average about $2,000 to $10,000 less in people’s personal incomes, with lots of unemployment claims. “The economy is weak.”
City Administrator Ryan Heiar said he moved some road projects up in priority, including $400,000 for the Phase II design of Highway 965 upgrades, $400,000 for constructing turn lanes on Penn Street, and reconstruction of Jones Boulevard north to– and including– its intersection with Penn Street, a $2.3 million project. Kuhl said he supporteds bringing those projects forward in the Capital Improvements Plan because improved roads benefit the community’s economy. Those improvements are projected to be repaid through Tax Increment Financing bonds.
Donahue noted that changing the current $10.91 levy to $11.20 would manage to fund all the established expenses and capital improvements projects.
“We would be increasing last year’s (levy) by what we increased in debt– which is 29 cents– and that’s basically, we’d be charging the public for the (amount of) debt increase for what we’ve done…which has been a heck of a lot,” said Donahue.
North Liberty Mayor Tom Salm said the council’s decision about how much to cushion to leave in the city’s budget has been a concern in the past.
“It boils down to, are we going to not build reserves as much,” said Salm. “Councils are always criticized for not planning ahead, especially with all the past growth and trying to keep up with infrastructure. I guess now, we are trying to plan ahead. We’re trying to get some money banked. This is a planning ahead process, so we can take care of our water, our sewer, our streets, and that sort of thing, in a little better fashion.”
The city is on track to end Fiscal Year 2009-10 with a general fund balance of just over $1.09 million, or approximately 17.5 percent of the $6.2 million general fund expenditures. The League of Cities recommends cities carry a balance of about 25 percent of their general fund expenses.
Next year’s general fund expenditures total $6,971,884, if approved. Even with a smaller increase in the tax levy, Donahue said he still felt a surplus could be accomplished, perhaps even more than the calculated $50,000.
“They did it last year, through good management of the stamp,” Donahue said of the city administration. “I think they can do it again.”
The council will hold a public hearing and formal vote on the proposed budget on March 9, after which the budget will be finalized and turned in to the state.