Fort Dodge officials are wrestling with a roughly $380,000 difference between the city's expected general fund revenue and the amount it will take to pay for providing local government services in the next fiscal year.
That projected deficit affects only the general fund, an account which pays for police and fire protection, parks and recreation, the Fort Dodge Regional Airport, the Blanden Memorial Art Museum and a handful of other government functions.
It is the hardest account to balance because it is so dependent on property tax revenue, City Manager David Fierke told the City Council Monday.
He gave the elected officials an assessment of the general fund as they continue working on the 2013-2014 budget. The 2013-2014 fiscal year begins July 1, but state law requires cities to have their budgets completed by mid-March.
Also on Monday, the council received proposed budgets for the police and fire departments. The spending plans for both departments maintain the current levels of personnel and services.
The general fund
The general fund relies on property tax revenue and that revenue is essentially flat, according to Fierke.
He said the total value of all property in the city remains almost unchanged at about $1 billion.
''We didn't get the growth,'' he said.
Fierke added that the growth in property value that has occurred is mostly in tax increment financing districts. Increased property tax revenue in those districts is set aside to be reinvested in them and cannot be placed in the general fund.
He estimated general fund revenues for the next fiscal year at $9,948,677.
He said budget proposals from agencies within the general fund total about $10 million.
The $380,000 deficit, he said, may be reduced as he and the city staff do more work on the budget in the coming weeks. But he asked the council to establish its priorities for dealing with it.
Councilman Mark Taylor called for asking nonprofit entities to give the city some money for the services it provides. Such a fee is called a Payment in Lieu of Taxes or PILOT.
Nonprofit entities don't pay property taxes.
Taylor mentioned Iowa Central Community College, Trinity Regional Medical Center and Friendship Haven as entities that should be asked to make such payments.
''I don't think it would hurt them much at all and it would help our general fund immensely,'' he said.
Fierke said PILOT programs are voluntary, and no organization can be required to make those payments. He said he discussed a PILOT program with leaders of some nonprofit entities about five years ago, and the idea was soundly rejected.
Councilman Don Wilson said recreation fees need to be set at a level that keeps pace with expenses. He said expenses are going up by 3 percent, but the Parks, Recreation and Forestry Commission approved only 2 percent fee increases.
''We take all the flack and the commission sets the rates,'' Wilson said. ''We have nothing to say about it. The commission, I feel, has too much power.''
The council directed Fierke to look at raising fees, but avoid cutting services if possible.
Police Chief Tim Carmody proposed a $3,150,912 budget.
The police budget is now $2,974,621.
The proposed budget calls for having 40 officers. The department currently has an authorized strength of 40 officers, but there are two vacancies.
Carmody projected that the department will generate $230,950 in revenue from things like fines, tickets generated by the traffic camera system, and federal payments for providing security at the airport while flights are boarding.
Included in the police budget is $63,363 for the city's share of animal control services, which are provided through an agreement with Webster County. Carmody said the budget provides a 3 percent raise for Blaine Hepp, the animal control officer, bringing his salary to $48,363.
Three police cars with an estimated total cost of $98,950 will be purchased in the next fiscal year.
The proposed Fire Department budget is $1,705,371.
That's an increase of about $21,000 from the current budget of $1,684,160, according to Fire Chief David Luers.
The budget will maintain the current staffing of 31 firefighters.
Replacing 20 air tanks for the firefighters' self-contained breathing apparatus will be the major purchase for the department in 2013-2014. Luers said the federal government is requiring the tanks to be replaced because of their age. He said he has applied for a federal grant to pay for them. If that grant isn't approved, $19,500 from the Fire Department's share of hotel-motel tax revenue will be used.
The ambulance service provided by the department is operated under a separate budget.
Luers is estimating that ambulance fees will generate $108,380 in the coming fiscal year. He added that operating the service is expected to cost $70,651.
The projected $37,729 profit from the service will be transferred into the general fund to help balance it.