One-time expenses and substantial health insurance increases are among the contributing factors for another city deficit budget next year, according to London officials.
The 2016 budget, introduced at Thursday’s London City Council meeting, includes a general fund budget of $4.198 million and deficit spending of $337,000.
The city is projecting about $3.86 million in income next year, auditor Katie Hensel said. The figure does not include money already earmarked for the capital improvements fund — about $308,873, 10 percent of the general fund revenue.
Hensel said she expects the city to carry over about $1.67 million into 2016.
Highlights of the increased budget include a 10 percent jump in health insurance, which equates to about $100,000, said Rex Castle, finance committee chair.
He called insurance costs a “weight around our neck.”
Additionally, two part-time employees in the street department will have to be offered insurance next year because they worked on average more than 30 hours per week in 2015. The Affordable Care Act requires employers to offer the benefit to anyone working full-time hours.
Castle said it was an unfortunate situation which will cost the city about $29,000.
“The administration needs to monitor more closely so that it doesn’t happen again,” he said. “I’m challenging the new administration to keep this under control.”
Castle said he’s “confident the new administration will get a handle on some things.” He also noted there is “padding” in the budget because department heads often do not spend all money set aside for them.
Other increases include a 3 percent step increase for non-union employees (union contracts are set for negotiation in January); a 25 percent increase in workers’ compensation due to a change in payment structure; $55,000 for two expected retirements in the police department; and an additional $80,000 in the police department for an additional officer’s salary and benefits. The move, approved by council in August, brings the department back to full force from cuts made in 2012.
The 2015 budget included deficit spending of $260,000 — about $77,000 less than next year’s.
Councilman Trint Hatt admitted the budget is “moving the wrong direction” during roundtable discussion at the conclusion of the meeting. He said he hopes the city’s next finance meeting is well-attended.
The meeting is Nov. 16, at 5:30 p.m. in council chambers. A third reading of the budget is expected at the next council meeting, Nov. 19.
Also on Thursday, council held a second reading on legislation that would in 2016 enact salary ranges for department heads and non-union employees.
Currently, salaries are set at one rate, and do not account for experience or skill, said councilman Jason Schwaderer, who sponsored the legislation.
The proposed maximum figure is the current salary, plus 3 percent. The proposed minimum figure is 20 percent less than the maximum.
Schwaderer emphasized the figures are not set in stone, but rather suggestions so that the city has something to work from.
One significant change is in the income tax director range. The minimum figure is set at $10,000 — substantially less than the $55,056 currently paid to income tax director Randy Courter.
Schwaderer said that was done to allow for “options” should the city decide to go into contract with the Regional Income Tax Authority (R.I.T.A.) for income tax collection. The local position would likely become part-time if a contract was approved.
“It leaves the door open for options, but I’m not saying that’s gonna happen,” he said.
The legislation’s intention is also to prohibit the administration from giving employees raises up to the maximum figure without council’s approval.
“We’re still working on the wording for that,” Schwaderer said.
Reach Andrea Chaffin at 740-852-1616 and on Twitter @AndeeWrites.