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Council discusses 2021-22 budget

The LaGrange City Council began its preliminary review of its 2021-2022 budget at its pre-meeting work session Tuesday afternoon.

City Manager Meg Kelsey said the overall budget is “balanced,” though some utility fees will have to be tweaked in the coming year. The 2021 – 2022 fiscal year ends June 30.

“It does have a few increases in fees, but they are very minimal in terms of what we need to do to get our workloads done,” Kelsey said.

By the end of the fiscal year, the city is expecting to have a total of $45,106,482 in combined funds available. According to the proposed 2021-2022 fiscal year budget, the city is projecting a total of $109,187,379 in revenues and $108,521,135 in expenditures.

Several aspects of the city’s budget saw declines in revenues due to the effects of COVID.

Kelsey said the city’s cash balance, which totals $45,772,725, is down from last year due to the pandemic’s impact on utilities. The funds most impacted by this decrease are the water and sewer fund and gas fund.

The electricity fund revenue, which Mayor Jim Thornton described as the “largest driver” of the budget as it feeds into other areas of the budget, saw a 3 percent decrease in sales during the past year. However, Kelsey noted that sales began to recover in March, thus she did not budget for a rate increase.

The hotel/motel tax to the city’s General Fund took a hit as well with a 10 percent loss. The tax took an estimated shortfall of 10.7 percent in 2020 and 33 percent in 2019 in the budget year of 2021.

The city has also privatized its probation services, eliminating four city positions. Probation fees brought in $142,098 in revenues in 2019 but only $$98,468 in revenues in 2020.

The decline in fees is a result of a decrease in caseloads from 350 cases per officer to only 40.

The four positions are being relocated into open positions throughout the city, Kelsey said.

The city’s gas fund saw a decrease due to a drop in gas sales during the pandemic of about 3.7 percent, Kelsey said, an amount she expects to be as low as 2 percent by the end of June 30. Due to this, the council is proposing a rate increase of $2.57 per month compared to the current rate for residential customers and an increase of $14.83 for commercial customers. The last time the city had a rate increase was in 2019, Kelsey said.  The city will be able to bring over $7.6 million as a cash balance in the next budget year.

To maintain the city’s sanitation fund, residential customers may see a $3 addition for residential curbside pickup and $6 for commercial curbside pick-up, Kelsey noted in the 2021-2022 budget review. The decision will be made following an ordinance at a future meeting.

Sales tax rebounded in 2021 with a 9.6 percent increase from 2019, according to the budget review session.

The city received a total of $1,587,397 from the federal government’s CARES ACT from economic impacts due to the COVID pandemic. Additional funds from this amount have been allocated to assist with the loss of tax revenue and COVID expenses, $826,480 of which has been budgeted for fiscal year 2022 for the loss of tax revenue and COVID expenses.

The council will hold a public hearing to discuss the items of the budget at its regular meeting June 8.