Daniel Prince
City departments spending less than budgeted will also help
Union City Council is looking to raise taxes and utility rates to help decrease the budget deficit the city faces in the coming year. At the beginning of the budget process, the general fund budget faced an expected deficit of $760,910. Some spending cuts the council made during the budget process narrowed that some. Council agreed to put in a 5.5 mill tax increase to help generate $68,000 in additional revenue to close the deficit further. The local option sales tax credit that city residents receive on their tax bills will help to soften the impact of any tax increase. Any further deficit in the general fund would be covered by the fund balance.
The utility fund faced the largest deficit, projected to be around $4.3 million. It originally was $6.1 million, but some projects were cut after grants were not received, and City Administrator Joe Nichols said more projects will be cut from the budget if grants are not received for them, as well. He said the city has to at least plan for them should the funding be given. He also said the cost the city is paying for electricity has steadily increased, which has created a deficit for the electric department for the first time in a long time.
The council approved a 5% increase in the electric, water, and sewer rates, which will add around $9 to utility bills, based on 4000 gallons of water and sewer use and 2000 kwh of electricity use. The increases will help cut into the deficit some. Spending cuts and retained earnings will cover the rest. The budget will go for its first reading in either the April or May council meeting.