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City Council Approves Budget

March 31, 2015

Chillicothe City Council members unanimously approved the city's spending plan for 2015-16 following a public hearing in the council chambers at City Hall Monday evening. The city's new fiscal year begins Wednesday, April 1.

The budget's final numbers came in at $13,392,798 in expenditures and $13,073,769 in revenues. The city is incurring more expenses year because of costs associated with the demolition of the old Hedrick Medical Center building. Funds for the demolition will come from reserves in the city's general fund. "Demolition of the hospital is the biggest priority, probably, and the highest cost item this year," said City Administrator Ike Holland. The process of asbestos mitigation already has begun and bids for actual demolition will be reviewed in May. The city has budgeted $450,000 for the demolition.

Also being discussed, but not included in this year's budget, is the future of the old Chillicothe Correctional Center. The city has solicited proposals for demolition or redevelopment of the buildings on Third Street; but, has not received viable options, Holland stated. Talks will continue this year. Aside from the old hospital demolition project, the city anticipates improving its infrastructure during the new fiscal year.

Among projects:

  • New police firing range and a shelter for outdoor training classes at the Emergency Training Center;
  • New city dog park in Mills Park, opening in April;
  • Improvements to Danner Park (fencing, concessions, press boxes, trails and sidewalks);
  • New tree carvings in Simpson Park;
  • New golf chipping area for golfers at Green Hills Golf Course;
  • More funds alloted for city streets;
  • Study for a new amphitheater, provided by private non-profit funds;
  • Initial survey and design for new bike and walking trail from Wabash area, funded by non-profit funds;
  • Old hospital demolition and consideration of old prison demolition.

"There are a lot of things to do this year," Holland said. In presenting the budget, the administrator stated that the budget was a group effort and input from the department managers is what drives the budget with the council's discretion. He also stated that the city's philosophy has been to analyze and scrutinize expenses and revenues in all areas, improve equipment and vehicles to make the city more fuel efficient and save money on maintenance and increase productivity, maintain employee training budgets to ensure a qualified staff, provide for employee morale and team building into the expenditures, and plan. He said he is working with department managers in putting together a 10-year plan.

Driving forces in the economy include increasing costs in health care and utilities, increasing sales tax revenues, and unfunded mandates. Health care costs have increased and, this year, the city's cost is $550,000, a 10 percent increase over last year. Utility costs, Holland said, continue to increase and the city will continue to look into green technology for its facilities, vehicles and equipment to help save money. Additional hits to the city's budget come in the form of unfunded state and federal mandates. "Our legislators are making laws up and it costs money," Holland said. "They come unfunded and that is passed on to the local governments." On a brighter side, however, local sales tax revenues continue an upward trend. General sales tax revenues last year came in at $4.2 million, approximately 7 percent higher than the $3.9 million from the previous year. The city has budgeted a 5 percent increase in sales tax revenues for 2015-16. "I think the city continues to grow," Holland said. "I think our total value of assets is certainly more than it was five years ago for obvious reasons with all the things that we have built."

He said he expects another great year for Chilli Bay Water Park and for the new Hedrick Medical Center. "The success of our community means success for the city of Chillicothe," Holland stated. "It is a partnership that adds to the quality of life for not only us, but the entire region as Chillicothe serves as a hub community."

Mayor Chuck Haney presided over Monday night's meeting. All council members but Third Ward Councilman Tom Douglas were present. Douglas, however, participated through conference call. The budget passed with a 5-0 vote. No one from the public spoke during the public hearing for the budget.

Prior to the 2015-16 budget hearing, the council approved an ordinance amending the 2014-15 budget.

Also Monday evening, the council approved yearly service contracts with the Grand River Area Family YMCA in the amount of $14,500, Summer Playground Association in the amount of $13,000; Chillicothe Area Arts Council in the amount of $1,500, Main Street Chillicothe in the amount of $28,000, Chillicothe Area Chamber of Commerce in the amount of $5,150, Small Business Technology and Development Center in the amount of $5,000, Humane Society in the amount of $72,304 (plus fees), OATS in the amount of $10,000, and Rumery and Associates in the amount of $36,000 (this amount will be split equally among Chillicothe Municipal Utilities, FEC Development, Inc., and Chillicothe Development Corporation with each entity paying $9,000).

Raises Included in City Budget Draft
March 17, 2015

Chillicothe's budget draft, at present, includes a 3% pay increase for full-time city employees and a 4% increase for department managers. City Council members discussed the financial plan for the 2015-16 budget year, which begins April 1, 2015, during a workshop Monday evening at City Hall. A final budget draft will be presented during a public hearing on Monday, March 30.

Much of the discussion Monday evening focused on employee wages, and the majority of the council members were in agreement of the 3% increase for full-time workers, and a 4% increase given to department managers and the city administrator. At a previous budget workshop, council members discussed paying department managers per council meeting they are required to attend; however, after Monday night's discussions, a 4% pay increase is recommended instead rather than the per-meeting additional pay.

The city is forecasting a budget with $13 million in revenues and $13.5 million in expenses. The city is incurring more expenses this coming year because of costs associated with the demolition of the old Hedrick Medical Center building. Funds for the demolition will come from reserves in the city's general fund. The process of asbestos mitigation already has begun and bids for actual demolition will be reviewed in May.

Monday's workshop also included discussion about city reserves. "We want to keep good bond rating," City Administrator Ike Holland said. "In order to do that, we must have 25% in reserves." This essentially translates into three months worth of operating funds. "We will monitor that monthly to make sure we adhere to that rule," he said. "We want to make sure we don't let that drop." The city currently has 25 percent reserve in its general operating fund. None of these funds are being used for the 2015-16 budget year.

Mayor Chuck Haney said that the proposed city budget is the result of many discussions among the city's department managers, the administrator, auditor and council members. Mayor Haney stated that the proposal reflects a cooperative effort. "I feel we are ready to go," Haney said following the meeting. "While there have been some disagreements, in the end, the majority rules, and I think they have a budget they agree with and will adopt." 

The Chillicothe Municipal Utilities budget will be included in with the city's budget when the council votes on March 30. The mayor noted that CMU had also approved a 3% increase in pay for its full-time employees. No one from the public attended Monday's budget workshop.

Prior to the workshop, the council conducted an executive session at which time a vote was taken concerning a personnel matter. No further details were available as of press time today.

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