The city of Hailey will cut spending in some departments during the upcoming fiscal year to cover an insurance rate increase of 27 percent and to provide funding for economic development, public transportation and animal shelter services.
Two weeks ago, the City Council set a not-to-exceed budget of $13.8 million, up slightly from last year's due to a new contract with the city of Bellevue for law enforcement services. Revenues will be increased by $25,000 under the new law enforcement contract, but the city will have to spend $33,000 more than expected to keep an already reduced benefits package for city employees.
"To achieve this we have had to cut spending across our budget," said Councilwoman Carol Brown. "This is killing us."
During a budget hearing Monday, the council further itemized expenditures.
The city will meet a funding request of $16,000 from the Animal Shelter of the Wood River Valley and will contribute $3,000 to Sustain Blaine after giving the economic-development organization nothing last year. It will decrease funding for the Hailey Chamber of Commerce from $68,000 last year to $61,000, and decrease funding for Mountain Rides public transportation from $75,000 last year to $66,000.
"We have been handling a budget that has been in constant motion these last three years," Mayor Rick Davis said during the hearing.
City Administrator Heather Dawson said five city staff positions that were left vacant last year when workers moved will not be filled in 2012. They include an assistant fire chief position. She said five more positions will see a decrease in hours or wages.
The Streets Department budget will increase by $75,000 for fixing potholes and chip-sealing.
The city's major capital improvement project, scheduled to begin this year, is a Woodside Boulevard street and sidewalk reconstruction project. The project was expected to cost $4.1 million, with $3.5 million coming from a federal stimulus funding grant, and $910,000 coming from the city's capital fund. However, Dawson informed the council Monday that the project will come in at $6.7 million, an increase of $2.3 million.
"Extra costs were due to meeting residents' specific concerns along Woodside Boulevard," she said. "Engineering was also more expensive than expected."
The city has included in its budget an expected $829,000 annexation fee payment from Old Cutters developer John Campbell to help pay for the project. Yet Campbell's company, Old Cutters Inc., has filed for Chapter 11 bankruptcy protection. Campbell's attorney signaled in a court petition that he would be disputing the city's claim for the annexation fees.
"We are showing that as an agreed-upon revenue," Dawson said. "We can still do the project without it by applying for more federal grants, putting the job back out to bid or reducing the scope of the project."
Public Works Director Tom Hellen said the city would begin incurring costs on Sept. 1 for 10 acres of parks maintenance within the Old Cutters development.
The city budget will be finalized at a council meeting on Monday, Aug. 29.
Tony Evans: tevans@mtexpress.com
