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Ropes tells Harmony council "tough times ahead"

Fri, Dec 12th, 2008
Posted in Government

HARMONY - Senator Sharon Ropes visited the Harmony City Council on December 9th to discuss the state's budget and the economic situation. She was there to answer questions and hear from the council about the challenges that Harmony is facing. Ropes had already been at Harmony Healthcare and other businesses earlier that day. She will be taking suggestions and concerns to the capitol during the next legislative session.

Ropes explained that many cuts are going to be made at the state level, and she's interested in how it will affect the small cities, which she considers an extension of state government.

"We need to come up with different ways to make cuts," said Ropes. "There are going to be services and resources lost due to the cuts. It's a human problem, not a math problem."

Ropes said it will be a difficult time coming up, but we will get through it. "I don't want to sugar coat it," she said. "It's going to be bad."

The state legislature is facing a $5.2 billion shortfall in the budget, and is looking to make some huge cuts. One of the cuts could be LGA, or Local Government Aid, that cities receive from the state twice a year. The next LGA payment is coming up this month. Right now, cities are unsure of whether they will get some of the money, all of it, or none at all.

City Administrator Jerome Illg pointed out that the only revenue the city has comes from property taxes and LGA, and right now that is his biggest concern. He added that the city has been expecting money in December and can't change what they have spent the past six months.

Mayor Dave Kingsley mentioned that they have subsidized the sewer out of the General Fund, and if they don't get the money, sewer rates will have to be raised.

Ropes said the state needs to collect sufficient funds at the state levels to make sure they can pay the cities. When they don't, cities have to turn to the tax payers. She and others are speaking out against that kind of budgeting.

Council member Linda Grover said Harmony is in a better position to weather this than some communities, but they are still going into their reserves just to maintain. Even though they have kept the budget increase down to two percent, it is taking the city down to bare bones.

So many cities have been making cuts and trimming their budgets already, and have no place left to cut. Ropes suggested doing a budget exercise to plan for an LGA cut of five percent, as well as ten percent, just to get in the frame of mind of what they will need to plan for.

"The problem is that the economy is slowing down, and people are not spending as much," said Ropes. "Money is not being spent so it is not in the state's revenue projections."

Ropes stated other communities, schools and even other countries are feeling the effects of the poor economical situation in America. She added that everything is on the table for consideration, and all options are being considered at this point.

"What we need to do when spending money is to keep jobs, keep people in their homes, keep roads open, public safety and education," said Ropes. "The cuts we make need to benefit all of us."

Ropes said small towns like Harmony are going to weather the hard times better than larger cities that have big businesses. "It's stabilizes the economy," she said. "You don't put all of your eggs into one basket, so that when the basket gets a leak, you don't lose everything." She also mentioned the town still has a pharmacy and a grocery store and other businesses.

Ropes encouraged the council to hang on and try to get through the next year. She said she would be happy to visit anytime or speak to anyone with questions or concerns. She also thanked the council members for their services to the community.

2009 Budget

After the visit from Senator Ropes warning that rough economic times are ahead, the council had to approve the budget and the levy for 2009. The preliminary levy set in September had an increase of 19 percent from 2008. Over the last few months the council worked to make cuts and managed to get the increase down to two percent.

There was some discussion about making that increase higher to give the city a small cushion in case the LGA is cut out completely. Kingsley said he felt uncomfortable raising it right now, after working on it for the past few months to get the levy down. Council member Gerald Shuck suggested raising the General Revenue part of the levy 10 percent, which would increase it about $40,000. This would increase the total levy another eight percent, for a total of a ten percent increase from last year.

"I think it's the responsible thing to do, to have as much as you can to work with," said Council Member Linda Grover.

Kingsley said the budget still had a lot of places where things could be cut. There were very few actual cuts made in the budget, as they mostly got rid of any budget increases. The council decided to add $40,000 to the General Revenue, which set the total levy at $588,522, a total increase of ten percent. Kingsley voted against the increase.

Building Committee

Illg updated the council on the improvement projects to the Community Center. Almost everything has been completed, except for a few touch-ups that will be needed in the spring when the weather is better. The gutters and downspouts are finished and they are putting the furnace in the boiler room. The city is still retaining five percent of the cost, or $12,444 until everything is done. There was some discussion about minor fixes and adjustment that have been made or still need to get done.

Allen Dahl thanked the council for allowing Prosper Lumber to do the job. He said he has heard nothing but good things about the project, and the city did a good job by saving the building.

Other Business

Shuck announced that due to Kingsley's years on the council from 1985 to 2004, and being mayor from 2005 to 2008, January 24, 2009 will be David Kingsley Day in Harmony. The council thanked Kingsley for his years of dedicated service.

Council member Sherry Hines said there was an EDA (Economic Development Authority) meeting with Heritage Grove and representatives from Harmony Healthcare. She said it was a good meeting with the new administrator. She said the budget looks very good for next year, and that Heritage Grove will be able to carry itself financially. There is currently a waiting list for residents and people who are putting down deposits waiting to get in.

The city received a check from the Southeast Service Cooperative for $10,251.84. The refund was due to the low claims city employees have had. The council approved having the employees that are on the health insurance each receive $700 into their account to be used for premiums, deductibles or other health expenses. Five employees qualify for the refund.

The council approved a RFP (request for proposal) that Illg will be sending out for garbage and recycling removal.

The council also approved the following:

• The county Hazard Mitigation Plan

• an interfund transfer of $150,000 from the electric fund to the general fund to pay for the parking lot improvements

• a gambling permit for the restaurant "On the Crunchy Side"

• setting the COLA (Cost of Living Allowance) at three percent for 2009

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