News From Terre Haute, Indiana

October 30, 2012

Council passes budget; now work begins

$2.5M in new revenue, cuts or combo of both needed to balance budget

Arthur Foulkes
The Tribune-Star

TERRE HAUTE — The City Council voted 6-3 Monday night to approve the City of Terre Haute 2013 budget.

The vote sets the stage for city officials to find approximately $2.5 million in new revenue, new budget cuts or some of each to make the 2013 budget a “balanced” budget.

Councilmen Neil Garrison, John Mullican and Don Morris voted against the budget. The remaining six councilmen, Bob All, Amy Auler, George Azar, Jim Chalos, Norm Loudermilk and Todd Nation, voted in favor.

Approving the budget was important to ensure the city receives its maximum possible revenue from the state, said councilman Chalos during about 45 minutes of discussion prior to the vote.

“We’ve got to make sure we maximize this levy,” Chalos said.

Just because the council approved the budget, the city is not obligated to spend the full amount, added Mayor Duke Bennett. He presented figures to the council at the beginning of Monday night’s special meeting showing that the city has spent nearly $12 million less than approved in past budgets since 2008.

Passage of the budget now sets the stage for the city to fill a multi-million dollar deficit in its general fund, which finances day-to-day city expenses.

Some of the gap can be filled by moving funds from other city accounts, such as the “rainy day” fund, Bennett has said. Other funding can be obtained through “payments in lieu of taxes” from the city’s wastewater utility and from a one-time sale of city property. The rest — about $2.5 million — will have to come from cuts or from a new fee for trash, leaf and limb removal, the mayor said.

At the earliest, the city administration would bring a proposed “trash fee” to the City Council in December, Bennett said after Monday night’s meeting. In the absence of such a fee, the city would be required to lay off up to 40 employees in the next year, he said.

At the start of the meeting, Garrison proposed moving $20,000 from the City Controller’s line item to the City Council to allow the legislative body to hire a financial consultant to help dissect future budgets.

“If we had that a couple of years ago, we would not be in the serious condition we are in today,” Garrison said.

However, Garrison’s proposed amendment was shelved when other members of the council said it might go beyond the body’s authority at this stage in the budget process and might affect the total tax funding the city would receive from the state. As a result, Garrison said he would pursue such a measure in the future.

Garrison also said he opposed the 2013 budget because it did not show a cut in spending from 2012. Bennett said such cuts can be made later, but that seeking the full amount is important to guarantee maximum state funding.

The city’s 2013 budget next goes to the Indiana Department of Local Government Finance for final approval. That should happen early next year, Bennett said.

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