By Karen Cornelius
When the Finance Committee met on Monday, April 10, to review several 2017 budget items, the bone of contention was the funding for Streets M&R (Maintenance and Repair). The budget expenses were listed at $680,000 which the administration felt were sufficient funds to be spent for street repair/paving materials including a $5,000 increase compared to actual costs in 2016.
However, councilwoman Barb Brady thought this amount was a cutback from other years where she said it often was $800,000. She said their problem is the city’s streets. She said they passed a levy and then decreased the forgiveness for people working out of town to fix streets. She said Streets M&R is a big part of this and they should not cutback and throw this in the face of the residents. “It’s not sufficient, hire people, purchase another Dura-Patcher. You should double M&R.” Brady asked service director Tony Valerius how he could cut funding. “Hire another guy. Get out there,” said Brady. She said with a little fixing they could extend the life of many streets. Brady asked to reinstate the amount to last year’s $846,000 which is now $680,000. She said between 2005-2009 it was $800,000. Streets chairman Jim Forthofer asked who did the M&R budget and why it was less. It was said that finance director Brian Keller and service director Valerius worked on it.
Finance director Keller tried to explain the glitch in funding in this account. He said due to his newness of the budgeting process, the 2016 budget for the Street M&R Fund was an exact duplicate from the 2015 budget. With that being the case, approximately $119,000 of the variance between the budget and actual costs can be explained due to loan proceeds recognized as revenue in 2015 for the purchase of two new vehicles. He said the corresponding expense was booked in vehicles and apparatus for $189,000. This created an in-and-out effect on the ledger which has a $0.00 effect on the fund balance. He said when the 2015 budget got duplicated in 2016, it took into account the loan proceeds and corresponding expense that was not going to occur. He stated that when the first loan payment of $67,000 was made in 2016 it created the appearance of being under budget by approximately $119,000 when in reality that amount should not have been budgeted for 2016.
Then Keller explained other factors that were reduced in Street M&R. He said snow removal materials were down in 2016 by $33,000 compared to 2015 so this line item was reduced in the 2017 budget. Traffic light maintenance was $3,600 under budget in 2016 so this line item was reduced in the 2017 budget. Also, overtime hours were down in 2016 by $9,600 compared to 2015 so this line item was reduced in the 2017 budget. He added the street foreman retired in September of 2016 and the position was filled by an internal promotion which led to a slight decrease in health insurance costs charged to Street M&R. “The 2017 budget is a reflection of accurate and up-to-date personnel costs including the 2.5 percent wage hikes in 2016 and 2017,” said Keller. “It also allows for sufficient funds to be spent for street repair/paving materials including a $5,000 increase compared to actual costs in 2016.”
Despite the explanation, councilwoman Brady asked about considering the history of Street M&R which she thought for 15 years was around $800,000. Council president Steve Herron disagreed and said they asked the administration to do the budget and if they can get everything done at a lesser price then that was sufficient at $680,000. He said history is not the answer for throwing more money at it. “We meet the needs to keep mildly drivable roads. I don’t think another worker is necessary,” said Herron. Mayor Eileen Bulan said they don’t have Brady’s figures and she would like to take a look because she doesn’t recall that budget was ever that high. She said they can always change the budget.
Councilwoman Brady responded they have revenue coming in from the forgiveness cut and they can add that to Street M&R to increase the amount. Councilman Frank Loucka agreed with Brady and said there should be no way to cut M&R with all the potholes. In Ward II alone there were guardrails to fix and oceans of places for repairs.”We should not be cutting.” Councilman Fred Ostrander also agreed to put the $800,000 back in the account. He did not think M&R should be spent for equipment, the two trucks. “We’re less because of the two trucks last year and hit this year because of the trucks.”
“We are collecting for roads, but the new tax isn’t collected yet,” said mayor Bulan. Finance director Keller said the reduced forgiveness additional revenue won’t be seen for three years and it all will go into the street levy fund.
The committee decided to put this topic back on the Finance agenda for May 8 for further discussion and to check past figures.
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