By allowing ads to appear on this site, you support the local businesses who, in turn, support local journalism.
City budget includes tax decrease
Placeholder Image

McMinnville officials received their first look at a proposed budget for fiscal year 2012-13 this week. It includes a 19-cent decrease in property taxes.
With the tax decrease, the city has a projected fund balance on July 1, 2012 of $4.3 million and a projected ending balance on June 30, 2013 of $2.8 million.
City administrator David Rutherford included the tax decrease in the budget at the direction of McMinnville Mayor Norman Rone, but he discouraged it.
“At the mayor’s request, the budget does reflect a 19-cent tax reduction,” Rutherford said in his letter attached to the budget. “However, this tax roll back will create a significant shortfall within the next three years.”
According to projected numbers over the next three years, the city’s beginning balance will reduce from $4.3 million in 2012, to $2.8 million in 2013, to $1.7 million in 2014 if the tax rate is lowered by 19 cents.
If the rate remains the same, the numbers will be $4.3 million in 2012, $3.1 million in 2013, and $2.4 million in 2014.
The city needs a $2 million fund balance at the beginning of each year in order to have enough cash on hand to meet debt service obligations and normal operating expenses from July 1, 2012 to December 2012, says Rutherford.
In the proposed budget, spaces were vacant for donations to nonprofit organizations such as Warren County Rescue Squad, Chamber of Commerce, Industrial Development Board, Sister Cities and Main Street McMinnville.
Empty spaces does not mean the city will cut funding to those organizations this year. Rone says the spaces were left empty to allow board members to consider what amount they want to give.
“I know we will make changes, especially in the area of donations,” said Rone.
Last year, Rescue Squad received $3,000, Chamber $49,000, IDB $34,000, Sister Cities $2,000 and Main Street McMinnville $10,000.
Park Theatre is included in the proposed budget. Under other professional services, $100,000 has been budgeted for plans and bid document preparation.
Documents are required before the city can solicit bids for the project and receive offers from construction companies that will tell them how much the project will cost. However, preliminary estimates place Park Theatre renovation at $2 million, which is not in the budget.
“If the decision is to move forward after bids come in, then construction funds will have to be borrowed,” said Rutherford. “To fund the debt service on $2 million will cost approximately $150,000 a year.”
While better late than never, the budget will not make it through the review process by the July 1 deadline. Mayor Rone encouraged board members to get to work.
“Please take some time to look over this budget and set your committee meetings,” Rone said. “We need to get to work on this.”
Departmental proposed budgets must go before their prospective committees for review and approval. The budgets must then be presented to the Finance Committee, followed by the full board, for review and approval. The process takes two to four weeks and is not expected to be complete by the end of the 2011-12 fiscal year that ends June 30.
To ensure the city can continue to pay employees and meet contractual obligations on July 1, a resolution was passed unanimously Tuesday night that will allow the city to do just that. The measure passed 5-0, with Rone, Vice Mayor Everett Brock, and Aldermen Jimmy Haley, Rick Barnes and Junior Medley voting in favor. Aldermen Clair Cochran and Billy Wood were absent.
Changes can be made to the proposed budget in committee or when it comes before the Board of Mayor and Aldermen. No meetings have been scheduled.