LANCASTER — Almost exactly one year after Mayor Don Rinthen made the politically unpopular decision to terminate five city employees in order to prevent the city’s general fund from sliding into the red, he is on his way out of office, warning citizens and the City Council of the need for further financial cutbacks as he goes.
At Monday’s final scheduled City Council meeting of the year, Rinthen estimated the municipal insurance tax, a major source of funding for Lancaster, might bring in $100,000 less than expected by the end of the fiscal year.
He also read a public letter to the citizens of Lancaster explaining the status of each of the city’s four funds. The general fund has not brought in expected revenues because the municipal insurance tax has so far produced about 11 percent less than was expected, he said.
“As the mayor, I recommend that you closely monitor the balances of these funds,” Rinthen said. “And make a determination as to what, if any, reductions are necessary in order for the city to remain in a financially viable condition.”
The city’s water fund is doing OK budget-wise, thanks to increased sales of water to Crab Orchard and Garrard County, Rinthen said. The municipal aid fund, which funds road maintenance, also is operating at budget. The sewer fund has been impacted by a decrease in local water sales.
Rinthen said the reduced sewer usage and lower municipal insurance tax income can both be attributed at least partially to the high number of vacant houses in the city. He estimated at least 160 houses currently are unoccupied within the city limits.
“The next six months are going to be very tight months,” Rinthen said.
Budget sheets for the city of Lancaster show as of Nov. 30, the city’s general fund had brought in almost 70 percent of its expected income for the year and spent approximately 57 percent of its expected expenses.
The municipal insurance tax, a tax applied to insurance policies taken out within the city limits, has brought in about $194,000, the budget sheets show. The tax was budgeted to provide $500,000 by the end of the fiscal year on June 30, 2011.
One source of income providing more than what was budgeted for is Lancaster’s alcohol tax. The tax was budgeted to bring in $125,000, but with seven months still left in the fiscal year, it had already brought in more than 57 percent of that figure. Rinthen said by the end of the fiscal year the alcohol tax might provide a total of $150,000. The tax provided about $200,000 in the previous fiscal year.
Rinthen estimated alcohol sales in Lancaster are down about 20 percent thanks to Danville going wet earlier this year.
Tempers flare over community funding
The mood at the City Council meeting tensed briefly as council members dealt with one of the final steps in the new process for allocating $5,000 in funding to community non-profit organizations.
Councilman Leonard Smith questioned the legality and appropriateness of the funding process, while Rinthen expressed his opposition to spending additional money. The city council was voting to spend $5,000 of taxpayers’ money at a time when the budget is already very tight, he said.
Council members Maggie Mick and Bret Baierlein defended the funding process, arguing it would be unfair to back out after designing the process and making the organizations that applied for funding go through every step.
In the end, the council awarded just $4,000 in the following amounts, pending all legal details and required paperwork:
* $1,500 for the Daniel Boone Chapter of the American Red Cross to use for emergency relief within the city limits of Lancaster;
* $1,000 for the 2011 Rural Heritage Tobacco Festival;
* $1,000 for the Garrard County Arts Council’s historical mural project; and
* $500 for the 2011 Battle of Lancaster Civil War re-enactment event.
A farewell for Rinthen
At the end of the City Council meeting, every council member had a farewell message for Rinthen, who soon will be replaced by current Councilwoman Brenda Powers.
Powers invited Rinthen to attend her swearing in, which she scheduled for 2:30 p.m. on Sunday, Dec. 19.
“Thank you for helping us and caring about our little town of Lancaster and helping us to move forward,” she told Rinthen.
Councilwoman Mick said she and her husband, Garrard County Economic Development Director Nathan Mick, are both grateful for Rinthen’s efforts to move Lancaster forward and his willingness to speak his mind.
“It was a tough time, but I’m very proud of your efforts and I’m honored to have served with you,” she said.
Councilman Jesse Wagoner commended Rinthen for his work during the January 2009 ice storm, while Councilman Baierlein applauded Rinthen for always trying to act fairly.
Councilman Chris Davis said he appreciates Rinthen’s coolness under fire and his dedication to fiscal responsibility.
“You’ve found every way you could to save us money,” he said. “You’ve done a great job Don.”
Rinthen said he plans on opening an auto repair shop and working full-time in Lancaster when his term is over. He promised he would still be around to offer advice if anyone in city government needs it.
“These are going to be rough years, but I know you all can handle it well,” he said.
SO YOU KNOW
Other items of interest from the City Council meeting:
* Mayor-elect Brenda Powers said after the meeting she plans to appoint current Councilman Leonard Smith as her city attorney when she is sworn in on Dec. 17. Smith, who was appointed to the council to fill out the remainder of Councilman Jimmy Crutchfield’s term, said he previously served as Lancaster city attorney 40 years ago. Smith would replace current city attorney Justin Genco.
* The council approved a one-time pay adjustment of $50 for every city employee, for a total cost of $1,050. Mayor Don Rinthen, who recommended the adjustment, said it has been years since city employees received any extra pay near the holidays.
* The council approved spending $119 per person for any newly elected or re-elected city officials who want to attend a local government training conference hosted by the Kentucky League of Cities in January.