‘new culture’ for success
A million-dollar turnaround engineered by city employees led to positive balances in Marion municipal reserve funds at year’s end, reversing deficits projected in the original 2014 budget.
“The budget adopted for 2014, which was adopted August of 2013, had our cash reserves setting at the end of this fiscal year at -$182,000,” City Administrator Roger Holter said Dec. 22 at a council meeting. “Through the efforts of literally every single department, as well as the utilities, our projection is the cash reserves will be maintained at $868,000. I’m proud of how the team responded. It was quite a learning process.”
The funds provide necessary operating cushions for the general fund, utilities, special highway fund, equipment, and capital improvements.
“It’s not where we want to be,” Holter said, noting year-end reserves were $1.7 million in 2012 and $1.9 million in 2013.
“This will help immensely for what we need to do for 2015 and 2016 to get those reserves back up so we can look at our next bond project. We do want to maintain a AAA rating in order to get the best bond rates,” Mayor Todd Heitschmidt said.
The council recognized full-time employees for their efforts by approving $100 Christmas bonuses, and authorizing up to $1,000 for a post-holiday employee recognition celebration.
“I’m very pleased with how our supervisors have stepped up to not only work with the budget, but have a 180-degree turn from what’s been happening at the city level the past few years,” Heitschmidt said.
“It’s really important they all know that it’s appreciated by the community,” council member Chad Adkins said. “It’s a lot different the way things are operating for them now than what they were used to, and change isn’t easy for anybody.”
Holter said changes in supervision, establishing individual and department goals, and replacing across-the-board pay raises with a pay-for-performance system based on accomplishments all contributed to the turnaround.
“The outgoing council adopted a pay-for-performance compensation model, and with that comes a marked change in behaviors to be successful,” Holter said.
Holter cited an example of street employees saving money by building a snow pusher that fits on a loader.
“It doesn’t seem like a big deal, but by their efforts to make that 20-foot wide piece of equipment, they can now clear a snow event with one-third of the labor-hour investment,” Holter said. “If we go out to try to buy it, it would be $45,000-48,000. The guys spent, I believe, $2,600 to make it.”
Holter said he and the council have changed city finance practices to make them more cost-effective.
“Our municipal financing policies and practices have been akin to payday loans to make our budget work,” Holter said. “As a newly elected governing body and a relatively new administrator, we have made the decision that payday loans are no longer an option, and we are not going to pay the additional fees that are assessed to that type of financial budget.”
Instead of automatically buying new equipment, for example, purchase and leasing options are evaluated to determine the best return on investment, Holter said.
“We could go out and buy the replacement bucket truck for the electrical department and pay $140,000, and at the end of the life cycle of those trucks we’ve been getting $10,000 back on them,” he said. “I now pay $14,000 on a lease program, and the city is no longer absorbing $130,000 in depreciation. That shift alone allowed us for equipment reserves to have a $78,000 swing.”
If changes continue to yield the results Holter anticipates, citizens may see lower tax bills.
“I’m planning in 2016 to look at a mill levy decrease on property taxes,” Holter said.