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City officials say there is more than enough money in the city’s reserves to cover the costs of the city hall complex.
In a report given to the City Council on Tuesday night, a net deficit of $630,000 was shown for the municipal complex.
City Finance Director Melanie Allwood and City Administrator Rick Childers both said that when the budget was being formulated, they believed all of the construction costs for the complex were going to be closed out last fiscal year. Allwood said the majority of the money went to finish paying Rand Construction. She said that figure also includes the parking lot at the fire station that has yet to go to construction.
Councilmen Tom Williams and Dave Powell both questioned why the figure was being shown as an expense but revenue was not. Childers, Allwood and Mayor Lance Green all assured them the money was in reserves. Allwood said the loan fund still has more than $24,000 in it and the reserve fund has $146,000 left, but said tax revenue is not keeping up with the municipal complex loan.
“That money is all there for the complex,” Allwood said. “Our sales tax is not enough to cover our loan payments so we’re a little bit short on that.”
“That will be an ongoing load against the general fund until tax revenues increase enough to offset the amount,” Childers added.
Bids on the fire station parking lot were opened on March 13 and the council approved a bid of $41,374 from Essig Construction of Richmond. Childers said Essig was not the lowest bidder. SenCon Construction of Napoleon was about $300 cheaper. Childers said that city ordinance allows the city to go with a local company if the bid was within five percent.
Childers said Richmond Fire Chief Lonnie Quick met with the two lowest bidders. Additionally he said Essig has agreed to lower their bid by $300, although it was not made clear how Essig learned of the bid.
Childers said $75,000 for manhole and line replacement was approved the prior fiscal year, but the money was never spent. Additionally the $30,000 that was approved for lime sludge removal came out of emergency reserve funds.
Allwood said the city is almost $19,000 over budget in the general revenue fund but said for the year they would still come out slightly in the black.
Allwood said the budget also needed to be adjusted for utility increases for the municipal complex.
“We didn’t know exactly how those numbers would fall,” she said. “Once we started getting some bills in, I felt like we needed to readjust those to more accurately reflect where those expenses.”
Allwood did provide some good news. Insurance rates for the city came in lower than what was estimated so the budget will see some savings there.
Allwood said she would ask the council to approve the adjustments at their final meeting April 28.