Tough choices during budget talks

The Mayor and City Council have had several special meetings to talk about the 2009 budget. Because of the crisis in the economy we have experienced reductions in revenues from building permits, the real estate transfer tax, and a smaller reduction in our sales tax. These budget shortfalls have resulted in lower fund balances. To deal with a portion of these shortfalls in 2008 our city manager has cut some expenditures but has not reduced any service levels. Because of a large planned reserve in our fund balance, we will not be making any drastic changes to begin this next fiscal year. We must change however from our "business as usual" government practice if things do not get back to the good old days of growth in 2009. While I have been promoting change this past year, the Council consensus has been to wait and see how deep this down turn will be before making any changes in our current practice.

I have been pretty aggressive asking for a plan on cost cutting during 2009. Staff has cut costs up to this point that don't include personnel. I and a few other Council members have agreed not to go back to all our homeowners and increase their fees or taxes anymore over the next 6 months while we see which direction the economy is heading. Staff however has suggested we immediately increase fees and taxes so we don't have to cut personnel and services to our citizens. We need to take a good look at all of our alternatives to deal with this situation. I am a believer that a smaller local government is a must in this economic climate because of all the pressures that have been put on our citizens with skyrocketing costs and losses in savings. We are benefited by great past fiscal planning that affords us this time to evaluate how we respond to this new economic environment. But we must act soon to be a constructive force in the big picture.

The other cost issue that is haunting us is state mandated pensions that will rise substantially over the next year if equities continue to sustain large losses. While we are mandated by the state government to live by standards that the legislature have set for our pension funds, we have no control on the costs that we must levy our citizens through property taxes. I have called Representative Karen May and Senator Susan Garrett to asked them to work with us on discussing alternatives that would reduce the burden on our property owners. Senator Garrett reminded me that a pension reform package was just signed into law that deals with some pension issues state wide. I do commend her on this oversight legislation and applaud this first step, but much more needs to be done. I welcome a dialog and partnership with our State Legislators to prevent a double digit increase in our city government (pension) levy in 2010.

If you look on your real estate tax bills you will see the pensions as a separate item. The 2008 pension levy will be $2,284,446.00 and it is proposed to be $2,416,644.00 in 2009 (5.8 % or a 132,178.00 increase). This pension cost is about 20% of the entire city portion of your property tax bill. Projections for 2010 will have an additional $630,000 increase (based on a 10% reduction in investment return) and I believe will have a huge impact on our ability to properly fund our core city missions unless we substantial increase in property taxes. Folks, this will be beyond our ability to control because of present state legislation.


This is important! We need to ask Representative Karen May and Senator Garrett for assistance and to work with our municipalities to reduce these mandated pension fund requirements. Especially in these economic times, it is just not fair for our citizens to take this huge increase on their property tax bills. We all must share in the pain of our tightening economic situation which includes all municipal employees.