Iola takes closer look at utility funds

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July 19, 2017 - 12:00 AM

Iola City Council members will likely be asked in the near future to consider rate hikes for the city’s electric and water customers.
That was the theme Tuesday as City Administrator Sid Fleming gave City Council members an in-depth look at Iola’s 2018 spending plans.
Fleming is molding the city’s 2018 budget, using feedback from a pair of workshops this week.
Tuesday’s presentation was not considered a Council meeting because only three Council members, Don Becker, Aaron Franklin and Michael Middleton, attended.
So while they did not have a quorum for a meeting, it still offered Fleming an opportunity to touch on a few budget items.
A similar budget session is scheduled for 6 p.m. Thursday at the New Community Building at Riverside Park.
Iola’s gas and wastewater funds are in healthy shape, Fleming noted, with enough in reserve to fund maintenance projects for both in 2018 and 2019, and with proper planning, even further down the road, Fleming said.
However, the water fund continues to struggle, due to lackluster sales, courtesy of relatively mild summers the past two years, and an annual $600,000 loan payment for construction of the city’s water plant in 2004 and 2005.
The electric fund, which is used to supplement the general fund each year in order to keep the city’s property tax levies in check, is also well short of what is preferable.
Most cities keep enough in reserve to pay for 90 days of expenses, which in Iola’s case, would be in excess of $3 million. As of this year, the city has about half of that.
The picture looked even gloomier, with one worksheet projecting a $2.7 million deficit in the electric fund by 2019, although that was on account of a mistake in input costs.
City Clerk Roxanne Hutton noted Fleming inadvertently over-estimated the cost of providing electricity to run the power plant by nearly $2.6 million over 2018 and 2019.
But even then, Fleming said the Council still may be required to look at a rate hike.
Fleming said he would continue to work with the budget plans for the utility funds to give the Council a clearer picture before they schedule a budget hearing, likely in early August.
Thursday’s discussion will focus on the general fund, and associated tax levy.
The public is invited.

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