Committee discusses pending deficit

The finance committee of the Hillsboro City Council met for approximately 10 minutes Tuesday evening to discuss the city's budget issues and pending $700,000 deficit.

Committee chairperson Peter Pence asked Hillsboro Auditor Gary Lewis if he had any updates regarding the current budget situation. Lewis said he had nothing new to report, but he had been reviewing numbers with Hillsboro Safety and Service Director Ralph Holt and "right now we're in a 'what if' game" in that they were looking at what would happen to the budget if certain items are cut. 

Lewis told council during the April meeting that due to a drop in revenue, the city was facing a deficit situation by the end of 2011, estimated at $400,000. In May, after receiving and budgeting requests from city department heads, the total deficit numbers, according to Lewis, would be between negative $600,00 and negative $731,000.

Pence, addressing Holt and Hillsboro Mayor Dick Zink said, "it sounds like you're still having discussions and are fact-finding on what plan of action you might take as far as to address (the pending deficit)."

"We need to sit down with each department head and see what we can do to work it out," Zink said. 

During a May committee meeting, Pence had asked Holt and Zink to be ready to discuss in June plans they have eluded to having to address the budget. 

Pence asked them how soon they could discuss the situation. 

"In all fairness to Gary, he was on vacation last week," Zink said. "Ralph just got these numbers today."

"We can work on the them all week," Lewis said. 

"What Gary gave me is basically a proposal," Holt said. 

Finance committee meetings have been tentatively scheduled for June 29 and July 6, according to Pence. Pence said he wants the committee to be ready to make a recommendation regarding the budget to a full council during the July 12 meeting.

"July? Is that normally the time (the budget) is submitted to the commissioners?" Zink asked. 

Lewis said he has asked council for legislation regarding the yearly submission of the city's budget to the Highland County Board of Commissioners "as late as September" but it is typically in July.

Council member Rod Daniels asked if one week was enough time for Holt and Lewis to meet with all the department heads and have a report ready for the committee. 

"Our primary concern is with the general fund," Lewis said. 

Zink later said the departments involved in the general fund discussion is the administration, the police and fire departments, the tax office and the street department. 

When Pence asked if there were any other questions, committee member Dave Shoemaker said, "I can't comment or ask questions unless we see some figures."

"It's going to be a tight budget year," Holt said. 

Daniels said that he had spoken to Lewis and his concern was with a "30 percent drop in business taxes."

"In one line," Lewis said.  

"It's down $139,000 from this time last year," Zink said, but that was regarding tax collections as a whole, and not a breakdown of individual taxes and business taxes. "You have to look at it month by month. Some businesses pay quarterly. I spent some time in the tax office and if we bring in $30,000 by the end of this month, we will be at last year's June total. Some months we're down. Really, that's not a big deal right now. There were three days (the tax office had to) shut down early in May for the holiday. Then $20,000 came in the first day of June."

During the meeting Pence made a motion to excuse committee member Bill Alexander's absence from the meeting. According to Pence, "he has a valid reason for not being here." The motion was seconded by Shoemaker. 

"We'll adjourn to next Tuesday, and hopefully we'll have some numbers to look at and keep moving forward in the process," Pence said.

The Hillsboro City Council was scheduled to meet in a special session Thursday. 

Zink told The Highland County Press Thursday that "something is going to have to happen" in regard to making cuts to balance the budget. He would not confirm or deny that the city was considering layoffs. 

"Right now, we're not hiring," Zink said. "In 2011 services will have to be cut. It's not going to be a pleasant thing."