Good Evening All,
Enclosed is a rough draft of a alternative budget for consideration. I have put this together in response to the following:
1. As noted a week ago, state revenues have again come in lower than projections. If additional cuts are contemplated localities can expect to be included.
2. In discussion with members of the banking community at the last REDCO meeting the next bump in the road will be a steep dive in the commercial real estate market within the next year.
3. Another area of the economy teetering on the edge is the credit market.
4. As noted in a previous e-mail the drop in the residential real estate market means that the commercial market is left to make up the difference as well as providing the additional revenue to meet budget needs. This at a time when businesses are already pinching pennies.
5. If the economy continues to worsen we need to maintain our reserves as much as possible for next year to avoid deeper cuts and possible layoffs. If, as some feel is the case, we have turned the corner, we need to maintain our reserves to protect our bond rating, and if things do improve, build up some funds for projects like the court facility.
The enclosed budget proposal does the following:
--Increases the meals tax by 1/2 percent. As noted this translates to only 50 cents on a $100.00 tab. This tax is on disposable income, takes a small part of the tax burden off residents and businesses.
--It does find savings in the original Outside Agency (OAs) budget and redirects these resources towards human services. It prioritizes the OAs. Additional funding is placed in these areas to bring services back to 09 levels as opposed to 15% cuts. It also means a lot of OAs are zeroed out.
--The funding for the dump truck is included but not funding for the Economic Development position. In discussions with most of you it was agreed that we need to take a serious look at this department before making any decisions. Under the current economic climate hiring someone now would probably not have much of an impact.
--The tax rate is set at 69 cents as opposed to the 70.5 cents currently projected. Even so, there is still a balance showing that should be used to lessen our draw down of reserves for the reasons noted above. At the least we should defer specific expenditures until we have a better handle on where this economy is going.
--This proposal also shows savings for the City Manager's position and for maintaining some for of hiring freeze. This is based on some very preliminary discussions with Mark and I am waiting for his and Bev's views on whether we go down this road and/or if the figures shown are realistic. Bev & Mark replace last proposal with the one enclosed. There is a math error in the first draft sent.
I had hoped to vet this with staff a bit more and do hope to have some more conversations tomorrow with them on the viability of this proposal. However, I did not want to blind side the Council tomorrow evening so I'm forwarding it on the understanding that changes are possible.
We need to take some time to define the city's responsibilities and long term priorities to shape a strategic budget plan. We cannot keep going year to year especially under the current economic conditions. We need to explain expenditures to the public in terms of outcomes which may take a few years to achieve.
Funding Committed As Per Last Work Session:
Outside Agencies $150,000.00
Econ Dev. Director $90,000.00
Dump Truck $65,000.00
1/2 Percent on Meals Tax $440,000.00
Limited Hiring Freeze $50,000.00
(Based on $150,000 past year)
Manager's Expenses $30,000.00
(Roughly (4) months thru Dec.)
Reductions Outside Agencies:
(Based on Manager's Original Budget)
Volunteer Fire $5,000.00
Regional Alliance $11,110.00
SPCA (Deferred) $10,000.00
Area Museum $10,000.00
Germanna CC $5,750.00
Total Available Revenue $866,860.00
(To 09 Levels)
Boys & Girls Club $30,000.00
Senior Visitor Program $14,400.00
Domestic Violence $11,060.00
Legal Services $34,298.00
(Request less than 09)
Disability Resource Center $26,100.00
Extension Service $1,500.00
Dump Truck $65,000.00
Total Costs ($184,970.00)
1.5 cents on tax rate (down to 69 cents) ($510,000.00)
Balance Back to Reserve $171,890.00
For me the most important issue is not what our tax rate is in relation to our neighbors; or how little the savings or the cost is to residents and businesses when setting the tax rate. The focus should be on what is the level of service residents expect and how do we provided it at a reasonable cost so that we do not become a burden on those we serve. Yes I’m beginning to sound like a broken record.
The attitude that it’s only a little cost this year usually means that in five years we are wondering how taxes got so high. When we justify tax increases because our tax rate is lower than our neighbors then we find ourselves looking for ways to spend money. Both attitudes ignore local demographics and the current state of the economy.
As per my e-mail to Council, over the next three or four years we starting off with a budget deficit, the need to increase the personal property tax, and significant increases in debt service if we maintain the current timeline on the new court facility and other projects that has majority support. Under these circumstances, and at a time when residents and businesses are cutting back and still facing economic uncertainty, saving even $100,000 is worth the effort.