The city of Chillicothe approved a near $11.4 million budget for the new fiscal year and plans to use $431,000 in reserves to pay, primarily, for improvements at the city-owned hospital facility. The municipal spending plan also reflects a 3 percent cost of living increase for all city and utilities employees. Each of the five council members approved the financial document following a public hearing Monday night, although two councilmen - Lonnie Sewell and Donna Preszler - expressed concerns about maintaining ample revenues to meet expenses. No one from the public was present to speak for or against the budget proposal.

The city plans to collect $10,952,230 in revenues for the coming year and use $431,132 in reserves to meet $11,383,362 in anticipated expenses. The city currently has $4.4 million in all of its reserves, officials say. Much of the reserve funds budgeted for this year will come from the Grand River Health Systems Fund, a fund built up through lease payments made by Grand River Health Systems to the city at a rate of $500,000 annually. Money paid into this fund can be used only for hospital-related capital improvements, according to City Auditor Theresa Kelly. Among hospital improvements scheduled for this year: $375,000 to remodel the basement, $185,000 to renovate Dr. Donald Metry's office, $165,000 to make parking lot improvements, and several other improvements. The total amount approved by the council for improvements is $960,000 for 2008-09 new items. The hospital has $756,000 worth of projects that were budgeted last year but were not completed. Among them: $175,000 for the ridge cap, $185,000 for the free cooling, and $165,000 for a surgery air handler unit.

This year's budget added to the budgeted items carried over from last year, and the $80,000 in required insurance coverage for the hospital will deplete the hospital's reserves by the end of this budget year, Kelly said. Overall, the auditor said that the city is "holding the line" on expenditures as general sales tax revenues have flattened. For the fiscal year ending March 31, 2008, the city collected $1,065,146.13 in general sales tax revenues, compared to $1,053,509.30 in FY 2006-07. The city had predicted $1,080,605 in FY 2007-08. The new budget calls for a modest increase in general sales tax revenues of around $16,000 over last year's actual collections.

In addition to the city's near $11.4 million budget, council members Monday night also approved the Chillicothe Municipal Utilities budget, which calls for around $15.3 million in revenues and $15.5 million in expenditures for the electric, water, wastewater and refuse departments. Mayor Chuck Haney said he was pleased with the budget process and the work of those involved in putting the document together. "I am appreciative that the council took the time to study all the recommendations by the department heads, the auditor, and the administrator and that we concluded very lengthy workshops and three special workshop hearings with a unanimous vote," he said.

As part of the budget process, the council also approved several contracts for the new fiscal year. Among them were contracts with the Summer Playground Association to provide summer recreational activities to youth (baseball and softball), with the Small Business Development Center to provide knowledge for job creation and retention as well as education about small businesses, with Drs. Goddard and Bonnette to provide required physical examinations and drug testing for prospective and current city employees, with Rumery and Associates for economic development services (including reimbursement agreements with FEC Development, Inc., Chillicothe Municipal Utilities and Chillicothe Development Corporation), with Joel Gilliland as the Green Hills Golf Course manager, with Shafer, Kline and Warren for engineering services as well as for a lease agreement at 921 Jackson Street, and with NextMedia for a sign lease agreement.

In closing out the fiscal year, council members also adopted an ordinance amending the 2007-08 budget. Mayor Chuck Haney presided over Monday night's meeting with the full council present.
In other business, the council:

• Approved the payment of invoices, $179,970.01, and payroll, $105,873.91;
• Approved bids for park concessions supplies. The city received bids from Graves MenuMaker, St. Joe Distributing and Schwan's Sales and plans to utilize each of the three vendors for various products.
• Approved bids for bulk fuel and self service regular and unleaded gas as well as diesel fuel for city departments from the lone bidder which was MFA Oil.

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