By Sean Rice
Celina government officials dove into the 2005 budget Friday only to learn the margin between income and expenses again is very narrow.
Safety Service Director Jeff Hazel briefed finance committee members on progress for lower budget requests to meet the city's income projection for next year.
Auditor Pat Smith reported the general fund is expected to receive income estimated at $4.82 million in 2005. He estimated the total general fund balance available for budget purposes is $5.29 million, but that includes a $466,000 left-over balance from this year.
In 2005 the total of all city funds is estimated to be $28 million, with about $21 million accounted for in water, sewer and electric utility funds and state mandated governmental funds.
Hazel said he worked with department heads and trimmed budget requests to $5.37 million, down from $5.53 million, with more work to do. Committee member Denny Smith said council still needs to include a sizable carry-over balance as an emergency account.
"$600,000 is really not enough carry-over in the general fund," Smith said. With expenses averaging near $400,000 per month, "It should be more like $1 million.
Smith said the city has gotten comfortable with 6 to 8 percent of the general fund budget coming back unspent each year.
"It's the same thing every year, we have to hope for that 92, or 94 percent difference to come in," he continued.
Committee members instructed Hazel to prepare a final recommended budget breakdown for members to consider, with a carry-over balance.
"Let's wait until we have all the information," Bachelor said. "We have until March to get this done, so if we have to put in the bulk of it in January, that's fine."
"There are fixed costs that you can't change, unless you physically cut services," Hazel said of his budget whittling. "At some point when you continue to cut, you're going to bleed."
Denny Smith agreed that the workable budget is tight, and pointed out nearly $4 million of the general fund is salary and benefits for employees. That includes all city employees other than water, sewer and electric personnel.
Committee members set meeting dates for Dec. 13 and 21 to begin looking line-by-line at each fund in the total city budget.
In another budget matter, Bachelor suggested Auditor Smith look into spreading the payroll of the mayor, law director, auditor and associated support positions between all funds. Currently the positions are funded solely from the general fund.
Bachelor argued the positions provide services to the water, sewer and electric departments and much as to the general government.
Community development expenses and the safety-service director's salary are spilt between all funds, at a rate from 50 percent electric fund, 25 percent from general fund and 12.5 percent from the water and sewer funds.
The change would free up nearly $100,000 in the general fund, committee members guessed, but also impact the water and sewer funds. The electric fund has the largest carry-over balance of any fund, exceeding $3 million.
"We want the most equitable means of cost allocation," committee member Denny Smith said. "What's fair is fair."