A 15 percent utility increase was proposed as a way to solve city financial issues Monday night.
The increase proposal was told to a group of about 25 citizens at the meeting that introduced the city budget for the coming fiscal year.
Citing increased expenses including nearly double the cost to produce water, Henryetta mayor Michael Dickey said, “it’s an unfortunate fact. Everything has increased over the last three years.” He said the city spent $1 to produce 1,000 gallons of water in 2015 and last year it cost $$2,39 to produce that same amount.
The proposed budget calls for the city to receive $12,797,641 in revenue from all sources this week and combine that with a $3,562,250 carryover for a total of $16,459,891. That projection is $760,919 less than the current budget. Of that, expenses are projected to be $13,235,411.
Last year the city budget was $17,220,810 in revenue with $13,128,967 in expenses.
A total of 28 departments receive monies in the budget. Of those, 13 have seen less money allocated than under the present budget.

The proposed city budget given to council members can be seen HERE.

Frank Crawford, head of the accounting firm that works with the city, used the analogy of a pair of pants with different pockets for each department.
“There are two deep pockets, we call them general funds and municipal funds,” he said. “Eighty percent of the money runs through them. The main pocket on the right is the general fund and the left pocket is the municipal authority.” He pointed out the municipal pocket derives its money from utility bills and any money left over in that pocket after all expenses are met, goes into the right pocket.
Every other pocket has a little bit of money but it is restricted and you can’t use it except for what is designated.” Those restricted funds are separated by law. “You have to budget how much money goes into those pockets.”
Crawford pointed out there is a requirement that the town has to maintain a balance of 30 percent of the annual revenue stream to be used in the event of a major expense. “You are examining each of these funds and how much they are starting with July 1. You estimate collections and what you will spend and what you will have at end must be at that 30 percent level.”
He went on to say that, without a rate increase, each of those “pockets” would fall below the 30 percent mark. “You can’t delete those pockets in the event of an emergency or you will violate the ordinance. You alternative is to cut expenses.”
That would mean cutting services or people, he pointed out.
“I understand we have got to cut but I wrestle with substantial increases including giving raises to people,” new council member Vernon VanMeter said. He was referring to recent negotiations with the Fraternal Order of Police. “Can we reopen negotiations?”
“We have a signed contract with them,” said city attorney John Isabella. “I will have to look into it.”
The police department is projected to receive $1,352,180 this year. That is $48,700 higher than the 2022-23 budget.
On police salaries, council member Joanna Cluck said, “We have to pay them to retain them.”
“Police retention is an issue statewide,” Dickey said. “We tried to make it attractive enough to retain them.”
Council member Jennifer Munholland pointed out if a new officer is hired and undergoes CLEET certification, the city is responsible for paying not only the officer’s salary while being trained but also officers to cover those shifts and the cost of training. “We are higher than Okmulgee in police salaries and their police chief is asking for more also.”
Budget cuts from the previous year are being made in streets, airport, cemetery, library, tourism, E911, water and sewer departments, public works and transfer station.
The airport cut is going to be made by changing the facility to an unmanned airport instead of having a person there throughout the day.
“There is no goal to shut down the airport,” Dickey said. “It will still be operational but we just can’t sell fuel there. We are looking at the pay at the pump option.”
Dickey went on to say their possibility of getting grants is being examined. One of those grants already in the works is to get water more readily available to residents on the hill. “We have $500,000 set aside and some money still set aside from the failed water project to help with that.”
A search is underway to help convert the city water meters to digital that would eliminate the need for a meter reader. Those meters would relay data to city hall and issues over water usage resolved. “We have 500 in place and need 2,300 more,” Dickey said. That project would cost $1.5 million.
Crawford told the council that Henryetta, like many other communities benefitted from the federal money through ARPA and CARES. “That’s not going to happen again in our lifetime.”
The possibility of an increase in sales tax was also discussed but, even if the questions was approved, any revenue generated from it would not affect the current year’s budget. Currently the city has a 4.5 percent tax and the possibility of another half-cent tax was discussed. Next year, a restricted penny sales tax question is expected to be brought up for renewal.
The Monday night meeting was the first of two required with the second to be on the agenda for the June 20 council meeting. By law the city has to pass the budget seven days prior to the start of the new fiscal year.
Even with the budget passed, the city has the ability to make amendments to the budget throughout the coming year. Crawford said that practice is common.