Make sacrifices or the people will pay the price.
That is the main idea of the story behind this year’s 2008 city budget.
The city’s proposed spending plan is about 10 percent higher than it was last year, initiating top city officials to propose a spending and hiring freeze.
This year, taxpayers will have to pay $41.6 million to support a $58.5 million city budget. Taxpayers do not have to support about 23 percent of the total budget with their money because revenues the city made in the past year offset that portion of the budget.
But according to interim City Manager Robert Casey’s calculations, if the "walk in place" budget isn’t cut by city officials, the tax rate will increase about 10 cents, causing the average city resident to pay more to support the municipality.
No new services, programs or full-time hiring will happen in 2008. The budget is "walking in place," according to Casey because the city has to postpone many needs for future years.
"Less is not only best but required," Casey wrote in this year’s budget narrative.
Three main factors have caused the budget to rise this year.
The city is obligated to pay a more than $1 million or 40 percent more than last year for public pension costs for police officers and firefighters. That bill includes the rising cost of benefits and terminal leave pay, up 75 percent over last year.
Second, county sewer management charges increased by about $255,000.
And the city has set aside $1.4 million as a reserve for uncollected taxes and tax appeals. The figure represents tax money the city may no longer be able to collect from residents who won their tax appeals in court.
The obligation the city has to the police and fire retirement system and the county sewer treatment plant are costs that cannot be reduced or controlled but weigh the most heavily on the budget.
But the council also has to make hard choices as to what improvements it can afford to make to the infrastructure of the city, such as roads, building improvements and other capital projects, according to Casey.
The city’s engineer and other officials said $4.7 million worth of capital improvements are needed in 2008 but Casey budgeted for less than half of that, about $2.1 million this year.
In a recent debt service presentation, Casey warned against not abiding by a long-term plan for city improvements. If Casey’s five-year capital improvement plan is enacted, debt payments on loans taken out for those projects can be scheduled and paid accordingly over time.
The manager also recommended selling two city schools to halt the debt paid on them and take out new short term debt for projects such as the replacement of air systems in city-owned buildings and the construction of a community center. Casey urged the Council steer away from long-term obligations and debt payments.
Now, with only a week left to trim the budget before it’s introduced early April, the City Council says there are only two ways the city can function in tough fiscal times with a downgrading national and local economy – raise taxes or cut services.
Casey recommended the council help him cut $1.5 million from the existing budget proposal before it’s introduced.
He said the cost to run the city is increasing by about 5.5 percent each year.
"We have to plan now for reduced spending in light of the state’s reduced aid to us," said Assemblyman and Councilman Gordon Johnson. "We definitely have to cut our spending. It has to be done."
Councilman Jack Drakeford, a more than 30 year city employee and veteran politician, urged the City Council to take a tough stand on the budget.
"We should reduce the numbers without reducing services. This budget is in bad shape," Drakeford said. "The fact is, bodies is what we need reduced."
Meanwhile, department heads, asked to budget conservatively for operations this year and for the beginning of 2009, are left with less funding to maintain services in the wake of city officials who aim to curb rising taxes although costs keep rising.
City officials were scheduled to meet yesterday from 6 to 8 p.m. in the municipal court to continue their discussion of the 2008 proposed budget.
