Over the past four years the Town of Porter’s year-end cash balances in its
general fund have dropped from $673,000 in 2010 to an estimated $75,000 this
The town has been relying on those balances to help fund day-to-day
operations in the following year.
At a 2014 budget workshop Tuesday, accountants from H.J.Umbaugh & Associates
told the Town Council it can start balancing its annual budgets by
increasing revenue and decreasing expenses.
One avenue discussed was increasing by approximately $2 per monthly bill the
town’s trash-collection fee beginning in January. The current budget for
that service is $340,000 but estimated revenue falls $40,000 short.
A public hearing will take place on the budget Sept. 24 and there’s still
time to make budget changes before final adoption Oct. 8, after which the
budget is sent to state tax officials for final approval.
Department heads were asked to review their budgets for possible
cost-savings prior to next week’s meeting, and Umbaugh was asked to study
why trash collection is underfunded when the user fee is supposed to cover
Umbaugh manager Eric Walsh said even though Indiana is using a 2.6 percent
budget growth factor next year, Porter is affected by the state’s
circuit-breaker property-tax caps. He estimated the town “lost”
approximately $267,000 last year, is estimated to lose another $329,000 this
year and $344,000 in 2014.
Council president Elka Nelson said in Porter’s case the town also was hit by
skyrocketing insurance costs this year and the Police Department was
expanded to where it’s needed to be.
Walsh said the state is anticipating a $6 million drop in Porter’s assessed
valuation next year although Nelson said some valuations still are being
As it now stands Porter’s draft 2014 general fund exceeds estimated revenues
by $312,000. In order to balance, Walsh recommended the town make $72,000 or
3 percent in cuts, increase the trash fee and transfer $200,000 from the
CEDIT fund to the general fund.
CEDIT has an approximately $700,000 cash balance; about $330,000 is
collected each year as Porter’s share of the Porter County income tax.
Councilman Greg Stinson said CEDIT has been used to pay for budget items to
relieve pressure on the general fund so the council has spent its CEDIT
Councilman David Woodrich asked if a CEDIT transfer is a large part of the
temporary fix next year, how does the town get back to balanced budgets in
the coming years? Umbaugh partner Todd Samuelson said Porter likely would
have to make dramatic changes in how and what services it provides, and rely
more on user fees.
If the town doesn’t want to reduce services, public safety or its quality of
life, Samuelson added, it can elect to use CEDIT money long-term but that
limits what Porter can do with it. CEDIT originally was enacted to promote
economic development. Also, since it’s based on income tax, CEDIT revenue
could drop, said Samuelson.
The town has about $475,000 in a separate rainy day fund, but
clerk-treasurer Carol Pomeroy said that money is held in emergency reserve.
Nelson said the fund’s been used as a bank that only has a deposit.
The motor vehicle highway fund or MVH used by the Public Works Department
could see a $51,000 shortfall next year, but fine tuning now could reduce
that. Walsh recommended making $6,000 in budget cuts, shifting $36,000 in
MVH spending to the local road and street fund, and moving $9,000 from the
Fire Department levy to MVH.
Even if Porter achieves a balanced annual budget, that doesn’t start
building up surpluses for coming years, said Walsh. He suggested additional
measures that could be taken and recommended having a 15 to 20 percent
operating balance to give the town a two-month buffer.
The council indicated they and department heads have their work cut out for
them in the coming week. Said councilman Rob Pomeroy, “I think there could
be some fine-tuning we could do.”