KINGMAN - The question of how to reconcile 2005-era revenue with 2009-era spending was the underlying theme at the Kingman City Council's preliminary budget workshop Thursday morning, with councilmembers facing a budget that is fully $2 million less than the current year's budget, and $7 million less than the one adopted for fiscal year 2007-08.
Carefully going over the budgets for each city department, Council spent much of the meeting searching for ways to cut nonessential spending out of the city's general fund while simultaneously looking for ways of bringing in new revenue to pay for the street department's badly underfunded chip sealing and overlay programs, as well as a raise for city employees, who have gone without one since July 2007.
Councilman Ray Lyons was particularly vehement on the necessity of a raise for city staff, even if circumstances required it be a token raise of just 1 percent. "I think we need to work very hard on making sure we don't keep balancing the budget on the backs of our employees," Lyons said. "We need to figure out, do whatever it takes to give them a raise."
City Manager Jack Kramer noted that a 1 percent across-the-board raise would cost taxpayers up to $240,000, and Councilwoman Carole Young said she appreciated Lyons' sentiment, but she was concerned such a raise would require a cut in the existing number of positions, of which 33 have already been eliminated or have gone unfilled.
"We are still providing some nonessential services we could cut," Lyons replied. "We need to do whatever we have to do, because we can't keep going like this.
"How do you keep morale up amongst employees if they don't get a raise and they know next year's not going to be better?"
Over the following hour, Council identified nearly $200,000 in programs that could be either cut completely or moved from the general fund to the Economic Tourism and Development fund, which is financed through the city's bed tax rather than the sales tax.
The only outright cuts proposed were the City Council's $10,000 annual donation to the Friends of the Kingman Library, $25,000 from the Kingman Municipal Court's professional services budget and, most significantly, $120,000 from the Kingman Area Regional Transit program. That last cut would effectively eliminate KART's Saturday services and limit weekday services to between 6 a.m. and 6 p.m.
Lyons hailed the cut, noting that the bus service has not been required to make any sacrifices even as other city departments have made deep cuts throughout the current recession.
"All these other departments went way out to make huge sacrifices," Lyons said. "The buses department didn't make any, and it's not an essential service - it's a courtesy that a few people enjoy."
Young concurred with the KART cut, maintaining that, while the program did provide an important service to Mohave Community College students during the week, Saturday riders could simply adjust their schedules. Young directed staff to add the cut to the preliminary budget which, if adopted, would render KART's Saturday run defunct effective July 1.
Council's largest funding stumbling block was what to do to refill the street department's depleted overlay and chip seal accounts, which are currently programmed to receive less than a fifth of the combined $1.8 million deemed necessary by Public Works. Public Works Director Rob Owen noted that the Highway User Revenue Fund responsible for much of Kingman's pavement preservation budget has declined substantially in recent years, due to declining fuel tax receipts and raids from the state Legislature.
"I think it would be a disservice to the community and to the people who drive on the streets in the city of Kingman if we don't do something to increase this," Mayor John Salem said. "It brings (streets) back to life. You can see the immediate effects of doing a chip seal on a street such as Bank Street that's in horrible shape, and you do that, and the next day it's drivable."
Councilwoman Robin Gordon added that, if the city fails to keep up with its cyclical chip sealing operations, roads throughout Kingman will rapidly deteriorate, eventually requiring much more costly repaving. The amount allocated for chip sealing, she said, was "not even close to enough."
Kramer suggested that, while it wasn't a popular idea, a .15 percent increase in the city sales tax could generate an additional $900,000 each year, replenishing much of the city's chip seal fund.
Councilman Kerry Deering noted that, if the city did raise its sales tax from the current 7.85 percent to a full eight percent, Kingman will still have a lower overall tax rate when compared to Bullhead City and Lake Havasu City, which each levy some form of property tax.
Council directed staff to make the sales tax increase an item for discussion on an upcoming meeting agenda, though it wasn't immediately clear when that meeting would be or whether the discussion would result in a vote.
Thursday's meeting is only the beginning of Council's budget discussions for the coming fiscal year. Their next budget meeting is scheduled for May 4, when staff will present the budget plus Council modifications for tentative adoption.
At that time, Council may choose to make additional modifications, after which members will no longer be able to make any further additions to spending.
The final budget meeting will be held on either May 18 or June 1, at which point Council can make any final reductions to the budget before voting to adopt it.