Special to The Gardner News
The Gardner City Council discussed the budget at their June 21 meeting.
Discussion revolved around salaries, mill rate, replacement vehicles. Gardner’s general fund balance has a target of 30 percent, and stands at 33 percent.
Matthew Wolff, finance director, presented the city’s 2021-2022 budget. The 2021 budget had been approved last year, and the 2022 budget was conditional, he said.
Wolff said the budget was the same except for some adjustments with revenues for the Revenue Neutral Rate, Special Requests and the Mill Levy.
The good news is 2020 did well, Wolff said they had seen a seven percent increase.
The city is receiving approximately $3.20 per home assessment, the revenue neutral rate is 19.278 and the mill levy is $247,000 now, he said.
Wolff listed new position requests and said seven will not filled til 2022 with a salary total of $349,300.
Wolff presented a proposal for a new vehicle and equipment replacement fund with annual contributions.
“It excludes the electric, utility and police departments,” he said. “They are managed separately.” Wolff said they would continue to research and develop the program.
The general fund balance has a 30 percent target he said, and at the end of 2023 the city will be at 33 percent.
“We are over the target balance and the idea is to spend down,” he said.
Mark Baldwin, council member, said he wanted to know if the increased sales tax was at 16 percent and if there was a plan going forward based off that number.
Wolff said they believe Gardner will plateau and are doing better than the county.
Kacy Deaton, council member, said she wanted to know about the position requests, and if there was a critical position in the police department.
Jim Pruetting, city manager, said they had gone through two or three meetings to narrow down to five to seven positions prioritizing the needs.
Pruetting said they went through the process with each department’s director for what they were lacking and how to expand service.
“The reality is there hasn’t been a large outcry for service positions at the justice center,” he said.
Pruetting said police officers were needed more than the service positions.
Tory Roberts, council member, said she thinks police are important but that the salaries were low.
Pruetting said the other positions are low and starting to catch up to the starting police officers.
Randy Gregoryck, council member, said he had questions about the mill levy rate.
Wolff said it was about transparency with the revenue neutral rate.
Gregoryck said he wanted to clarify that one mill is equal to $247,000.
“It’s grown since I’ve been around,” he said.
Roberts said she wanted to know if they kept the RNR if the city would have enough to fund everything.
Wolff said it would drop to 24 percent in year 15.
Winters said he wanted to know if they could make the decision annually. “We could go through this year and see how things go,” he said.
Winters said he wanted to know what the vehicle replacement fund covered.
Wolff said it was to look at the city’s fleet of vehicles and cover replacing them for the long term, except for the police department vehicles.
Winters said if not the police department vehicles then which vehicles.
Wolff said the program would be for the Public Works Department vehicles.
Pruetting said as the fund grows they could make adjustments but will have to replace the dilapidated vehicles.
“Where we are at now it is a good time to do it with Senate Bill 13 with incremental adjustments,” he said.
Gregoryck said he wanted to know what percentage the preventative maintenance program would be contributing.
Kellen Headlee, public works director, said they would annualize the capital replacement cost for a vehicle. “We will tweak the fund and cost of the fleet every year,” he said. “The intention is it would pay itself off.”
Gregoryck said he can’t see the city buying a vehicle for $3600.
Deaton said they would keep the mill levy the same and increase what the city brings in.
Wolff said that was correct.
Roberts and Gregoryck said they wanted to keep the rate where it was at currently.
Baldwin said he understood adding positions and the program because the city needs it, but he didn’t see what the problem was in getting the rate down low. “Because revenue keeps coming in,” he said.
Baldwin said he favored the revenue neutral rate and changes to dropping the fund balance.
Gregoryck said he wanted to know about the Grata Development’s part. “I’m not sure we are going to receive 100 percent credit for growth,” he said.
Pruetting said it was all speculation. “It’s better to be in a position of strength than weakness,” he said.
Baldwin said it was still good next year. “We don’t have to make a five year decision now,” he said.
Gregoryck said he wanted to know what the savings for the residents was going to be.
Wolff said it was essentially the same.
Gregoryck said he wanted to know what it would look like with Baldwin’s suggestion.
Wolff said the general fund balance would drop to 24 percent.
“The farther out it drops after 2025,” he said. “This is our concern.”
Gregorcyk said he suggests going back to the drawing board.
Wolff said they had to follow a time line to meet required deadlines.
“We could be penalized if not on time with the county,” he said.
Gregoryck said didn’t they have at least a week or two of time.
Wolff said he wanted to verify that council had decided to exceed or maintain the revenue neutral rate so they can hold the public county hearing.
Winters said that was the consensus.
Wolff said he wanted to know what numbers they needed.
Gregoryck said he wanted to see what the numbers looked like with Baldwin’s proposal.
Wolff said it drops to 24 percent after 2025.
“We can fund all the requests, but we will burn through the general fund faster,” he said.
Pruetting said 23 to 25 percent was the goal, and they were on the low end of other municipalities.
“We were less prepared to weather Covid,” he said. “It’s the reason we changed the target to 30 percent because of that.”
Pruetting said he understood the desire to lower taxes but they still didn’t know how the city was coming out of Covid.
“It’s better to be in a position of strength to start,” he said.
Wolff said the city is taking in more debt because of growth and always criticized by S &
P because the city hovers at 23 percent. “This gives more comfort to agencies,” he said.
Winters said they could keep the mill level the same for a better position, but there were a lot of unknowns. “I don’t want to raise taxes,” he said.
Roberts said she agreed there were so many unknowns but wanted to keep the rate the same because what if something crazier happens to the city than the 2020 pandemic.
Baldwin said he wanted to know what everyone’s target was to feel good.
Roberts said start at 30 percent.
Baldwin said to do the same thing the city was doing today.
Roberts said maybe it was too late this year to change anything.
Baldwin said if 30 percent is needed why did the city need to be above five individual budgets in order to do that.
Pruetting said the general fund balance went down every year, so they kept what they did last year to rest the fall.
Wolff said it wasn’t a one time thing for expenditures. “We are doing it in a way to be structurally balanced,” he said.
Baldwin said he wanted to know what 2022’s target balance would be if the city added nothing.
Wolff said they would have to recalculate and get back to them.
Baldwin said they had already collected too much from voters, especially if they go above the 30 percent target.
“If the number is above that do we give it back or look at the forecast,” he said. “It doesn’t seem we will capture everything this year—especially with Grata but capture in the future.”
Gregoryck said it was a good conversation, but he didn’t know if there was enough A or B data to decide.
Winters said it seemed the consensus was to keep the revenue neutral rate the same or above.
Wolff said he wanted to know what info they needed in order to him to help them out.
Baldwin said he didn’t know what everyone else wanted but he would choose one or the other to capture both to get the target fund balance or to do nothing.
Wolff said he wanted to know if they thought it was necessary for the community and the best way to prioritize. “It depends on the level of service you want to provide the community to be at with the mill levy,” he said.
Baldwin said they had endless options.
“I’ll do about anything but what does everyone want to look at,” he said.
Deaton said she wanted to keep the mill levy the same.
Winters said there was consensus to keep the revenue neutral rate neutral or higher and to look at specific numbers from now and then.
In other business:
Todd Winters, council president, presided over the meeting for Steve Shute, mayor, who was on vacation.
The first presentation was for the 2020 Audit and Comprehensive Annual Financial Report.
“There were no problems or issues this year which is always good,” said Brian Holst, senior audit manager, with Allen, and Houlik.
Holst said the governance letter showed everything being pushed back for a year due to Covid and accounting estimates related to pensions and retiree health benefit utility allowances. Holst said the audit was fairly smooth this year and Gardner has a great staff.
“The city was very well prepared for us and we appreciate that,” he said. “Other cities are not.”
The Distinguished Budget Presentation Award from the Government Finance Officers Association of the United States and Canada was awarded to Gardner for its biennial budget for the fiscal year beginning January 1, 2021.
Matt Wolff, finance director, said it was the seventh year the city had received the award. The city had to meet national requirements for policy document, a financial plan, an operations guide and a communications device. Documents must be rated proficient in all four categories and the 14 mandatory criteria within the four categories.
“Saying we have an excellent staff is an understatement,” Wolff said. “They helped us get through Covid.”