City sets hearing for $22.1 million budget

The completion of a large-scale renovation project at the city airport will cause a small drop in the city's new operating budget, but the $22.1 million spending plan is expected to provide a number of benefits when it takes effect.

A public hearing on the fiscal 2015 budget will begin at 6 p.m. Aug. 11 at the city council chambers on South 3rd East Street next to city hall.

Like other communities, Mountain Home operates under a fiscal year plan, which runs from Oct. 1 to Sept. 30. The proposed spending plan reflects a $1 million decrease from the city's current operating budget but remains on par with its operating budget from the year prior.

"Financially, we're poised in a excellent position," said Mayor Tom Rist.

Even though the city's financial situation was fairly stable, the process to finalize the new budget was not easy, he said.

"The budget process was difficult. It was brutal. A lot of things got cut or were thrown overboard entirely," said Rist as he referred to budget requests from each city department.

As work began to create the budget, each city department submitted a number of requests, including various equipment purchases. While most of those requests were valid, the city simply couldn't afford to pay for all them.

At the same time, city leaders struggled to finalize a plan to include tangible pay raises for their workers.

"The salary discussion was probably the most difficult part of the budget," he said. "It was certainly the most stressful part of the budget process."

The motion approved during the salary discussions included a 1.5 percent pay increase for all city workers with a pair of 3 percent step raises for selected employees. It marks the first noticeable pay increase for all city workers in four years.

Raises approved in the new budget attempt to correct an ongoing deficiency with the city's employee pay scale. The city froze its worker salaries following the Great Recession that began in late 2008.

While that pay freeze kept the city from cutting its work force, it had its own consequences. Employees on the lower end of the pay scale with years of experience were getting paid the same as new workers, "and that's not fair," Rist said.

Approved by the city council during a meeting July 28, the city's new fiscal budget represents another consecutive year of steady growth since the state's economic downturn in 2008. The city virtually eliminated all discretionary spending for nearly four years until the economy here began to improve.

The drop in total funding is tied to the completion of a large-scale construction project at the city airport. In late July, work began to replace the runway at taxiways at the city airport.

The $2.4 million project was largely funded through a grant from the FAA with the city paying a matching portion of that amount. However, making that grant viable represented its own series of challenges, according to the mayor.

To make it work, the city budgeted a majority of the funds to come out of the current fiscal budget with the remaining dollars allocated in the fiscal 2015 budget.

The mayor emphasized that the airport project had to begin now or the city risked losing that federal funding.

"We were going to leave a million dollars on the table if we didn't do something," Rist said. "It was either we do it now or we were going to miss that window of opportunity for maybe 10 or 15 years."

That's assuming the FAA continued to fund these types of grants in the future, he added.

Looking at the specifics of the city's spending plan, money budgeted in its general fund was also down by roughly $50,000. However, it reflects the completion of a project to pave the Desert Canyon Trail earlier this summer, which came from a state parks and recreation grant.

While some budget line items were down it the new fiscal spending plan, agencies like the city's economic development office will see increases. That $90,000 boost in spending, however, is tied to a grant and additional contributions it hopes to receive to pay for beautification efforts around the downtown underpass.

Meanwhile, the city golf course budget is also up by roughly $45,000. That money, which includes thousands of dollars in expected donations from local organizations, will help replace broken and aging equipment used to maintain the grounds.

The city's budget has to anticipate receiving these grants and donations and make sure they're included, Rist emphasized. Otherwise, the city would need to reopen its budget to include those increases, which gets expensive, he added.

In related news, local civic organizations expect to receive continued support from the city in the coming year. Among them is the Mountain Home Senior Center. The $5,000 in total subsidies will help the center support Meals on Wheels and other programs for local senior citizens.

At the same time, the city is expected to provide $20,000 to the Mountain Home Transit Service, which is the same amount it received in the current fiscal year. Meanwhile, the Mountain Home Arts Council will receive $5,000 in local subsidies to promote various fine arts programs in the local community.

The Mountain Home Youth Center was also set to receive $5,000 in local subsidies. However, the money is already earmarked to finish cleaning up hazardous waste inside the building, according to the mayor.

In mid-July, the building was closed after asbestos and other hazardous chemicals were detected in material removed from the building as part of an ongoing renovation project. Several days later, the city formally ended its ties with the organization that ran the center.

Looking to the future, city officials expect to move on to other long-term priorities once the airport repairs are complete, according to the mayor.

"It's time to move on to another project," Rist said.

For now, city leaders are looking at a 10-year plan aimed at improving the Highway 20 corridor on the city's east side. For example, a grant through the Idaho Transportation Department would help extensively renovate South 18th East Street and install a street light at the intersection of American Legion Boulevard.

Originally, the city hoped to start the engineering work on that road project this year but is now looking at pushing it back to fiscal 2017.

Meanwhile, the city is looking at focusing its enterprise funds on efforts to either drill a new well or build another water storage tank in Mountain Home. However, the mayor doesn't expect that effort to begin for another two years.

With local funding continuing to remain steady, the mayor is cautiously optimistic that changes to the state tax code will not have a significant impact on future city budgets.

In 2013, the state legislature approved plans to eliminate a portion of the state's personal property tax paid to cities like Mountain Home. In return, the state agreed to make up for this lost revenue by channeling money through other means.

However, the mayor cautioned that the state may eventually stop making those payments like it did several years ago when it eliminated revenue sharing funding.

"We're going to be very cautious with the money we get from the state on that backfill," Rist said regarding the revised personal property tax payments.