Officials weigh budget-cut options
By Kathy McCarty
Staff Writer
PRESQUE ISLE — Trying to find ways to reduce the municipal budget without impacting services or city employees has been a lesson in frustration for the City Council — as was the case Monday when City Manager Jim Bennett once again presented an update on where the city stands financially and possible options available that would result in a balanced budget.
Much depends on state lawmakers and the decisions they make this week, said Bennett.
“If the governor vetoes (the state budget) and lawmakers fail to override it, I’m not sure where we’re at,” said Bennett. “If they override it, we’ll have a firm budget.”
For the purpose of Monday’s discussion, Bennett suggested assuming the state budget passed.
Bennett noted a discrepancy was discovered in what councilors have to come up with to balance the municipal budget.
“We’ve made adjustments and you have the revised sheet,” noted Bennett. “The targeted amount is $458,533.”
Of that amount, Bennett told councilors $143,800 will be covered through various cost-cutting measures and increased revenue. The list included: $45,000 in increased permit revenue through the Code Enforcement Office; $21,000 saved by not opening the outdoor pool; and police turnover resulted in a $5,000 savings, while the department will see a Police Academy fee reimbursement of $15,000 from Cumberland County, who hired an officer away from the PIPD.
General government salary savings, which include Bennett and Deputy City Manager Martin Puckett not receiving raises, accounts for $7,500. Aircraft excise fees total $12,000, and a cut to operating costs for Public Works of $5,000 was made. Interest from the emergency fund of $13,300, auto excise fees of $15,000 and city clerk turnover of $5,000 accounted for the $143,800 figure.
Councilors spent a great deal of time on the next topic: cuts impacting city employees. Bennett said adding a furlough day/vacation day give-back would result in $18,048 in savings, a change to health insurance would add $17,573, while deferred comp at 1 percent suspension would result in another $13,928. “This would save $49,549,” said Bennett.
Bennett said in addition, a property tax increase of $125,000 would likely be necessary. Selling city assets could raise up to $25,000. He also suggested capital reduction to the tune of $25,000. Finishing his list, he indicated surplus use of $90,184 would bring the total savings to the $458,533 figure needed to balance the municipal budget.
Councilors debated the various options, with no decisions reached. Councilor Dick Engels suggested a 25 percent cut in the stipend councilors received, while Councilor Pete Hallowell thought it only fair, given the sacrifices municipal employees have already made and are once again facing, to recommend councilors not take any pay for half a year.
“I’d like to put in Council’s salary 100 percent for the next six months because it’s the right thing to do,” said Hallowell.
Engels called it “symbolic,” while Councilor Craig Green said it “expressed good faith.”
“So the citizens know, we earn $1,500 a year, while the chair gets $2,000,” said Green.
Deputy Chair Randy Smith said while he wasn’t “pleased to discuss increasing property taxes,” he wished to address it as “another possibility.”
“I’d like to talk about increasing property taxes. I feel employees have been on board with staffing. I don’t know if I feel good about taking away from those who’ve been pitching in,” said Smith, with Hallowell saying he agreed.
Green said while some cuts “are temporary, they affect people.”
“I’ve had some employees beg ‘please don’t cut my hours,’” said Green.
Green sought other ways to reduce costs, returning to the topic of the fire department’s need for a new fire truck. As he did earlier in the month, Green questioned why a used truck couldn’t work for the time being and why the city couldn’t purchase a vehicle from Canada. Bennett and Fire Chief Darrell White explained the red tape involved in purchasing something from across the border and the difficulties that ensue if repairs are needed.
White said he’s found purchasing a vehicle entirely made by one company as opposed to a truck from one place and body components from another simplified the process when maintenance or warranty work is needed. Bennett noted buying new as opposed to used when it came to emergency vehicles was his preferred choice.
White also noted that should the department buy a used truck, it would come due for replacement about the same time the next truck in the fleet also needs to be replaced.
Smith asked what the impact to taxpayers would be if taxes were increased by $175,000. Bennett said it would be an additional 34 cents, which would be in addition to the 82 cents derived from increases for school and county portions of the budget.
“You’d be looking at a $1.16 increase to the tax rate — looking at most likely another dollar on 2014 taxes,” said Bennett. “We’re looking at a minimum of $1 (per $1,000 in valuation) this year, $1 next year. We’ll need to have a serious dialogue as to what services we can give up.”
“The cold reality is if the number’s not an acceptable number, (it could lead to) employees losing their jobs,” said Bennett, adding it might leave councilors no choice but to “eliminate departments, change hours or find other ways” to address shortages that are a direct result of the state’s cut to municipal revenue sharing.
“As much as I hate to say it, it’s only fair to make them (employees) think about what’s going on — not let off the hook completely. It’s a short-term solution. If we have budget issues next year, we’ll have to involve employees,” said Engels.
Bennett said he “wasn’t looking forward to looking at another employee with a family and having to look them in the eye and lay them off.”
“Nor do I want to see people sacrifice for increased taxes,” said Bennett.
Bennett said he’d put together more information for councilors’ regular meeting on July 1, at which time it was hoped a state budget would be in place and the municipal budget could be finalized.
In other council business , Public Services Director Dana Fowler, who had sought the purchase of a paver for the city, withdrew his request in light of budget concerns, noting he would bring the matter back for councilors to consider at a later date.
