As a way of drumming up much-needed additional revenue, the city of Arma is increasing its mill levy in its 2010 budget.

As a way of drumming up much-needed additional revenue, the city of Arma is increasing its mill levy in its 2010 budget.
Earlier this week, the city council approved the city's budget, which raises the mill levy to 21.207, up from the 2009 rate of 19.107. City Administrator Tim Schook said the increase was necessary to help the city balance its budget.
"It was to help increase funding to pay the bills," he said. "We're just running way too short, so we're trying to gain a little bit back."
Schook described the 2010 budget as "really tight," and said the city cut expenditures down to "bare bones." Net expenditures for next year are estimated at just more than $2.3 million, up from this year's estimated total expenditures of $2.16 million.
The city's valuation for 2010 is set at $5.77 million, up slightly from this year's total of $5.75 million.
Schook said Friday that the city's various departments are operating at a fairly even cash flow, with the exception of the water department. Expenditures in that department in 2010 are estimated at $288,000, while projected income is at $216,000. To help fill that gap, Schook said a rate study is being conducted and the city's water rates may increase.
"We may have to look at a water rate increase to balance that budget," he said. "That's the only department that looks to be a negative cash flow at this point."
The city had a similar issue with its sewer department earlier this year. In March, the city council approved an ordinance that added a $1.50 charge per 1,000 gallons of water usage — the added fee was split into two $.75 increases — to the city's flat sewer rate of $15 per month. Schook said at the time that the increase was a measure necessary to begin to close the $46,000 gap between sewer department revenue and expenses.