Sales tax may help hold off sewer hike

Wednesday, August 6, 2008

Uncommitted city sales tax revenue may be used to stave off projected sewer rate increases, if the plan is approved by the McCook City Council.

City Manager Kurt Fritsch told the council Monday night at its regular meeting Monday night that the financial consultant for the water and sewer departments projected in 2005 a yearly rate increase of eight to nine percent for both departments, to pay back costs for the new treatment plant and improvements at the sewer.

So far, the water department budget is in healthy shape and rate increases are not needed.

But the same can't be said for the sewer department, Fritsch said, with it's low ending balance at about $255,000 and declining.

Both departments are enterprise funds and are supported by rate users.

Instead of raising sewer rates, Fritsch said the council has the option to use a portion of the uncommitted $500,000 city sales tax revenue.

The money could be added to the ending balance or applied toward the sewer debt, depending on what would bring the most relief, he added.

Fritsch also reminded the council that the proposed 2008-09 budget includes a $1.50 increase per month for trash collection with another $1.50 per month proposed for 2009-10. The increases, recommended by an auditor, will offset surging fuel prices in the solid waste department, due to hauling the waste to the Ogallala landfill.

The council will be asked to approve the increase at its Aug. 18 meeting. The increase will go through three readings before it goes into effect Oct. 1.

Another issue the council will have to decide before the proposed budget is adopted is a vehicle that was requested by city administration staff.

Fritsch said at one of budget hearings that to reduce costs of purchasing a new vehicle, an alternative would be for city administration to use the city car he was furnished with, a 2001 Impala and to provide him with a car allowance.

Other budget matters the council approved Monday night include:

* adopted the employee classification and pay plan for 2008-09, that includes the increase in minimum wage and a 4.5 percent cost of living adjustment.

* approve the use of restricted funds by an additional one percent. The council approves this every year and allows for future growth in restricted funds, such as sales tax.

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