Here’s the bad news for Chesterton municipal government: the town will be allowed to increase its total property-tax levy in 2011 by only 2.8 percent, which amounts to $122,789.

Here’s the worse news: you can take $100,000 of that amount right off the top to cover a shortfall in the Parks and Recreation Department budget created this year by the Indiana Department of Local Government Finance (DLGF), which ordered Superintendent Bruce Mathias to cut $100,000 from his 2010 budget.

That leaves only $22,789: not enough to cover any sort of a raise at all for town employees but enough—barely—to cover a longevity bonus of $125 per full year of service per employee.

The bonuses will further carve around $8,500 from the remaining $22,789, leaving a grand whopping total of $14,289 not yet earmarked.

And that’s pretty much that.

Only it’s not.

The stumbling economy is coming home to roost in more ways than one, when it comes to municipal finance.

Begin with the fact that the final two phases of the three-phase excess levy approved by DLGF in 2008—which allowed the Town of Chesterton to collect more property taxes than the annual increase set by law—have been canceled, when anticipated residential and commercial construction never materialized. Although the excess levy totaled $860,583, DLGF phased it, with $517,215 of it front-loaded for pay-2009 but two more phases—$234,736 for pay-2010 and $108,722 for pay-2011—contingent on proposed development actually occurring in two areas recently annexed by the town: at the eastern terminus of East Porter Ave. and south of the Indiana Toll Road.

That development is all just still on paper, Clerk-Treasurer Gayle Polakowski said at the annual budget workshop on Monday, so DLGF has revoked the final two phases of the excess levy.

The economy is playing havoc with government funding in other ways as well. With all new residential construction virtually dead in the water—after going great guns, with new subdivisions coming on line nearly every year, earlier in the decade—the miscellaneous income provided by building-permit fees has dried to a trickle, Polakowski said.

Meanwhile, Street Commissioner John Schnadenberg will lose 16 percent of his stated-funded Local Road and Street budget in 2011—from around $146,000 this year to $122,000 next year—because revenues from the state gasoline tax have plummeted: the consequence of high gas prices prompting folks to drive fewer miles and invest in better mileage vehicles.

All of that, moreover, amid looming expenses, including an estimated $75,000 to $100,000 for an emergency generator needed for the new 15th Street municipal facility; and an estimated $35,000 to $40,000 for a security system at the facility.

The Town Council did take some action on Monday. Members voted 5-0 to authorize Polakowski to cover the $100,000 shortfall in the Parks and Recreation Department budget with moneys from the currently flush health-insurance account. Polakowski noted that she has already been covering smaller shortfalls in other departments’ budgets from the same account.

Members also voted 5-0 to earmark $60,000 from the Rainy Day Fund—comprised of CEDIT revenues over and above those certified by the state—to purchase two new squads for the CPD and a plow package for Building Commissioner Dave Novak’s truck. As part of that vote, members authorized Polakowski to deposit $300,000 from the Rainy Day Fund—leaving that fund a balance of around $321,000—into the Major Moves account, to reimburse it for moneys borrowed to cover miscellaneous shortfalls.

Finally, members voted 5-0 to re-schedule their regular December meeting from the second Monday of the month to the first Monday, Dec. 6, at 7 p.m.; and to scheduled a special meeting at 4:30 p.m. Dec. 20, in order to pay 2010 claims before the end of the year.

Posted 8/17/2010