By BILL SHEA
Fort Dodge officials are working to erase a projected deficit of more than $85,000 in the local government's largest budget account for the 2014-2015 fiscal year.
At the same time, they're anticipating that the property tax rate for that fiscal year will drop 42 cents to $20.40 per $1,000 of taxable value thanks to a less expensive employee health care plan.
City Council members learned of those budgetary developments Monday.
City Manager David Fierke said the $85,359 projected deficit in the general fund will be reduced to zero before he presents a spending plan to the council for final approval.
The general fund, which totals more than $10 million, pays for public safety, parks and recreation, the public library and the Blanden Memorial Art Museum. Most of its money comes from property tax revenue, and historically it has been the toughest piece of the budget to balance.
In the current fiscal year, the city is spending about $9.8 million from the general fund and has about $10.1 million coming into it.
The proposed budget anticipates a general fund of about $10.3 million.
Fierke said that during the next fiscal year, expenses in the general fund are expected to rise by 2.7 percent while revenues will rise by 1.7 percent.
''As Jeff and I are going through the budget, we are making changes now,'' Fierke said, referring to Jeff Nemmers, the city clerk and finance director.
The Parks, Recreation and Forestry Commission has already approved increased prices for some programs, but Fierke said he is not recommending any additional general fund fee increases.
The general fund difficulties are occurring even though the full impact of the state's new commercial property tax reform hasn't been felt yet. Last year, at the urging of Gov. Terry Branstad, the Legislature passed a measure reducing property taxes on businesses and apartment buildings.
Fierke said the impact of that will be felt in the 2015-2016 fiscal year and beyond.
''We're heading toward difficult times,'' he said.
Property tax levy
The property tax rate for the city of Fort Dodge is now $20.82 per $1,000 of taxable value.
Not all of the money generated by the property tax levy goes into the general fund, however. Of the total levy amount, $8.37 per $1,000 of taxable value goes into the general fund. That includes the $8.10 per $1,000 of taxable value that's the standard levy for the general fund, plus a 27 cents per $1,000 of taxable value emergency levy.
Some of the property tax levy money goes to pay for employee benefits. Nemmers said reduced costs for employee benefits will enable the city to reduce the property tax levy to $20.40 per $1,000 of taxable value. He attributed the decrease to a new employee health care plan.
Part of the tax levy, about $4 per $1,000 of taxable value, goes toward paying off general obligation bond debt.
Fierke presented a plan for borrowing $4.2 million in 2014 via a general obligation bond. That money would pay for improvements at Fort Dodge Regional Airport, the firehouse, the Municipal Building and Harlan and Hazel Rogers Sports Complex.
The debt would be repaid over 10 years with an estimated interest rate of 2.5 percent, according to Fierke.
The council members were briefed on proposed budgets for three departments Monday.
The Police Department budget calls for spending $3,178,567. That's up from the current budget of $3,112,912.
The police budget would maintain the current staffing of 40 officers. It also calls for buying three police vehicles.
The Fire Department budget calls for spending $1,790,871, up from the current $1756,971. Current staffing of 30 firefighters would be retained.
The Fire Department's ambulance service has a separate budget. The projected spending from that account is set at $198,920. That's up from the current budget of $108,380.
The budget for the Department of Business Affairs and Community Growth calls for spending $196,200 on planning and $191,800 on inspections.
The council did not recommend any changes to those budgets.