News From Terre Haute, Indiana

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September 29, 2012

Mayor: 2013 budget ‘close to fundable’

TERRE HAUTE — The City of Terre Haute’s proposed 2013 budget is not “balanced” but is “very close to fundable,” Mayor Duke Bennett told the City Council this week.

Reaching a balanced budget will require a few more years, Bennett said, adding that meeting the city’s cash-flow in 2013 will again require a short-term loan of approximately $5 million.

At a special budget hearing Tuesday night, Bennett presented an initial budget for 2013 of about $70 million. However, that budget will be trimmed in the next month and, by the time it is presented to the council for a vote in October, it will be closer to $66 million, the mayor said after the nearly two-hour meeting in City Hall.

During the meeting, Councilman Neil Garrison, D-5th, presented figures he said show the city’s general fund deficit growing in 2013 by approximately $2.8 million. Added to a 2012 general fund deficit of $4.5 million, that would bring the general fund debt to more than $7 million, he said. “At what point will the [Indiana Department of Local Government Finance] say, ‘That’s enough?’” Garrison asked the mayor in the meeting.

Bennett, who has been meeting with members of the council for the past several days to discuss the budget, said he has several options for bringing about a balanced budget in the next few years. Depending on what the members of the council will support, the budget could be balanced by the end of this year or by the end of 2014, the mayor said.

“There’s no one magic plan,” Bennett said in a later interview. Bennett said he favors a plan that would balance the budget by the end of 2013.

At least one idea to help balance the budget is charging a solid waste disposal fee for city residents. Those fees would be used to cover the expense of the city’s trash collection contract with Republic Services and also limb and leaf pickup, Bennett said.

The 20-year trash contract, signed in 2007 by former Mayor Kevin Burke, is the city’s third highest expense after employee salaries and benefits, Bennett said. He would not speculate as to how much residents could expect to pay in monthly fees.

Elkhart Mayor Dick Moore, in northern Indiana, recently proposed a monthly trash pickup fee of $11.35 per month, but that was voted down by the Elkhart City Council, leading Moore to announce mandatory, unpaid furlough days for city employees, including police officers and firefighters. However, at least one City Council member in Elkhart said there would other ways the mayor could have found to deal with the situation.

Bennett, in public comments on a trash disposal fee, has hinted at a fee much less than the one attempted in Elkhart, a city of about 51,000 near South Bend.

Speaking Thursday, Garrison said he does not want to see layoffs of city employees. But he also does not want to see additional tax or fee burdens on city residents.

“I’m concerned where this is headed,” Garrison said. “My concerns are increasing, not diminishing.”

Bennett said the final budget for 2013 will include “a little bit” more spending than in 2012.

Also in his remarks Tuesday night, Bennett said the city will be forced to borrow approximately another $5 million in February or March to cover day-to-day expenses. A similar short-term loan was taken out earlier this year, leading Garrison and council finance chairman John Mullican, D-6th, to question the city’s fiscal soundness.

Speaking Friday, Mullican said the city will need to run budget surpluses to return to avoid future borrowing.

Bennett agreed.

“We need to actually have a surplus because I need to sock money back, probably about $5 million, so that way we know that at the end of the year we’ve got enough cash so we don’t have to borrow externally. We can borrow internally,” Bennett said.

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

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