News From Terre Haute, Indiana

October 12, 2012

Public raises questions, concerns on 2013 Terre Haute budget

Arthur Foulkes
The Tribune-Star

TERRE HAUTE — As a vote on Terre Haute’s 2013 budget nears later this month, more questions are being raised about the city’s financial health.

Members of the public and city officials discussed next year’s budget at a public hearing Thursday night in City Hall at a special meeting of the City Council. In recent years, such hearings have been uneventful, but this time some members of the public raised questions and concerns.

Earl Elliott, a longtime Terre Haute certified public accountant, spoke at the hearing saying he was concerned about the city’s critical “general fund” balance, which started the year $4.5 million in the red.

Based on state audits and financial reports, Elliott said the general fund balance declined by almost $9.4 million from 2009 through 2011. That fund pays for the city’s day-to-day expenses, such as many employee salaries.

To balance the city’s general fund budget, Mayor Duke Bennett said he has prepared a series of “options,” including a new fee for picking up trash, limbs and leaves. He has been meeting privately with City Council members about this and other options in recent weeks.

“I wonder what the projected general fund balance on Dec. 31, 2012, will be if none of the to-be-presented options are approved,” Elliott said at the meeting.

Asked by a member of the Terre Haute Fire Department if the “trash fee” is needed to avoid layoffs, Bennett said they could be.

“If we don’t put a fee in, the next year we’ll have to make some additional [budget] cuts,” Bennett said at the hearing. “That may be some layoffs, but the preference would be to have layoffs everywhere except [in the fire and police departments],” he said.

Bennett also expressed frustration about the city’s revenue losses in the past few years due to Indiana’s new property tax caps.

“Nobody ever talks about the loss of revenue we’ve had,” he said. The city has lost about $6.7 million annually under the caps, he said. “We have navigated through this extremely well.”

n Also Thursday night, especially in view of the general fund shortfall, the nine-person City Council, which passes the city’s budget, voted unanimously to deny itself a 2 percent pay increases in 2013. All other city employees, including the mayor and other elected officials, will receive a 2 percent raise next year.

Members of the council receive a salary of $14,166 not including benefits. Their vote saved the city – in total – just less than $3,000.

Increasing city employee salaries by 2 percent next year will add about $568,000 in new expenses in 2013, said Leslie Ellis, city controller. That’s less than the $1 million previously estimated.

Reporter Arthur Foulkes can be reached at 812-231-4232 or arthur.foulkes@tribstar.com.