Harris levy on way up

City hit by drop in housing market, unexpected loan payments, rising fuel costs, and a lack of increase in LGA funds.

HARRIS – Harris is facing tough times.
Unless the city can negotiate deals with the Department of Employment and Economic Development (DEED) and Lakes Area Bank, residents may see a steep increase in their 2009 taxes.
On Monday night, Sept. 8, 2008, the city council approved a preliminary tax levy that is 66% higher than the 2008 figure. With that will come increases in utility bills, as well.
WHY THE INCREASE?
Mayor Rick Smisson explained the major factors entering into this increase.
Unlike surrounding cities, Harris did not receive a bump in local government aid. The city had expected to receive about $60,000 more, but the figure was instead left static.
This is due to a state designation of Harris as a "wealthy city" versus "poor city", which is what Cambridge is listed as, noted Smisson. This new formula means that Harris will not see additional funds in years to come, unless the formula is modified, meaning the city will continue to suffer.
Another big impact on the budget is the reversal DEED made concerning the city's payback of the PFA loan it received for the wastewater treatment plant. The city had initially been told it would not be responsible for either interest or principal payments until 2009. Instead, the city has been saddled with $140,000 in bills – which it didn't budget for. This means that in 2009 the city must essentially pay for two years worth of payments in one.
The city is fighting back against both issues. City workers are in contact with the state trying to pinpoint where they got their figures for the formula.
Smisson also intends to meet with representatives of Lakes Area Bank in Harris to negotiate a $122,000 short-term loan to cover the city's budget shortfall.
Also contributing to the issue is the fact that money did not come in from the Highlands of Harris housing development as the city had planned on, which put its 2008 budget out of whack.
"The housing market has changed everything," said Smisson. "Between the housing market and the cost of fuel it's been an incredible kick in the teeth."
SITUATION MAY BE RESOLVED
Hope is in sight. Although the housing market has collapsed, one developer still intends to build a resort in the city. Bruce Fagen plans to bring his request before the city's planning commission this fall. If his plan for a resort on 350 acres along County Road 9 is approved, he will pay the city $500,000 in various fees over three years.
That money would pull the city out of its hole, pointed out Smisson.
However, the budget the city put together for approval on Monday night did not factor in that $500,000. Instead, it was a "worst-case scenario," according to Smisson.
"It's going to be painful if we don't make right decisions," he added.
2009 BUDGET
The city made cuts in many areas for 2009. Basic services such as utilties, police and fire are up, however.
Factored into the budget are 1% increases for city staff.
Once again, the city has had to shelf a hoped-for increase in police hours.
Pushing the budget up is rapidly increasing fuel costs.
Harris is still paying for mistakes made in the past, said Smisson. "We ran up things. We didn't save for things. We allowed overtime to accrue."
The preliminary budget as approved on Monday night is set at $895,981.88, a 5.36% increase over the 2008 figure.
The preliminary levy was set at $520,000, compared to $312,400 in 2008 and $278,928.96 in 2007.
The city will set its final budget and levy in December. It cannot raise the figures at all, but can decrease them. Last year, a decrease was made between September and December.
Next year will mark the first year in three that the tax rate in Harris has dropped or remained the same. In the past three years, the tax rate has decreased by 11%.

BUDGET CLOSE UP
Revenues:
General fund +33.98%
*includes LGA and levy
Fire +822.22%
Building/zoning +35.87%
Park development -40%
EDA -60%
Water -42.28%
Sewer -49.02%
Cemetery +63.64%

Expenses:
Council +7.52%
City clerk - 9.93%
Elections -100%
City hall general -22.26%
Police +13.02%
Fire +5.69%
Public works -8.58%
Street lighting -4%
Parks -33.59%
Building/zoning -71.04%
Park development -40%
EDA -60%
Water +27.68%
Sewer +38.08%
Cemetery +27.32%
TOTAL +5.36%