Utility fund eyed for assistance if needed
The Hebron City Council met in a special session Monday, Sept. 10, due to the Labor Day holiday Monday, Sept. 3. At the meeting, the council heard and accepted the 2012-13 city budget.
City accountant Brian Blobaum presented the summary stating council members are required by state statute to set the property tax request for the general fund and bond fund for 2013, then set the maximum allowed expenditures limit for the City as a whole for the 2012-13 fiscal year.
This year, Blobaum suggested setting the levy rate at 46.8973 cents, up slightly from 46.0524 cents last year, which sets the property tax at $249,101 in the general fund. Last year the property tax was set at $241,461.
For the bond fund property tax, $15,935 was set for 2013 requiring a levy rate of three cents per $100 valuation, which is the same as last year. “Actual scheduled payments for the coming year on these bonds total $13,813,” Blobaum told the council. “These bonds may now be prepaid since they have been outstanding over five years, and you probably want to take a look at doing that.”
The total net property tax increase of all funds is budgeted at 3.05 percent for this year, compared to last year’s 0.8 percent increase, Blobaum explained in his report to the council. New property growth will absorb 1.48 percent leaving 1.57 percent increase on prior existing properties.
Overall, budget expenditures for the City are set at approximately $8.5 million for 2012-13 versus an estimated actual expenditure of approximately $4.45 million for the current fiscal year. “This expenditure limit is set at the maximum amount of funds you have available,” the accountant said. “The limit is way over what we would expect you to spend.”
Blobaum commented in his report that the overall projected cash position of $4.23 million appears to have decreased from the beginning-of-the-year amount of $4.34 million and $4.47 million from two years ago. He cautioned the council that the $4.23 million amount is very preliminary and is based on estimates for the final months of the fiscal year.
He said that although growth is trending lower, the City’s cash position was strong, but that funds would possibly need to be transferred from the electric utility to meet expenses. Historically, the City uses the electric, water and sewer funds to meet the needs of the budget when necessary. Currently the city-owned utilities fund holds about $3.4 million of the City’s cash reserves. The board agreed to transfer $250,000, if needed, from the utility to the General fund to assist in paying bills. The last such transfer was in September 2009 for $176,411.
Blobaum said state statutes impose a “lid bill,” which seeks to limit the growth of budgeted restricted funds revenues. Restricted funds revenues come from property tax, state pass-through revenues, sales tax and transfers of excess utility funds monies. The City is allowed the prior year amount plus an inflation factor growth and the limitation is excepted for amounts to repay bonds and capital outlays relating to real estate which are paid for from these restricted revenues. “This limitation has eased primarily due to lack of growth of property tax and sales tax revenues in recent years,” he said.
A detailed financial report as well as fund breakdown for 2013 is kept on file at the City Office.