City budget turning into battle of needs versus wants

As the city begins its process of worksessions and hearings on the FY13 budget (which would begin in October), Mayor Tom Rist is asking department heads to cut approximately $530,000 from their budget requests.

It's not that the city is in any more financial trouble than it has been since the nation's financial meltdown in 2008, it's just that departments are trying to get caught up on long-delayed infrastructure improvements that were put off during the leanest times.

"It's not going to happen," Mayor Tom Rist said. "We're not (financially) there yet."

This year, the city expects to receive roughly the same amount of revenue as it did last year. The legislature's partial elimination of the personal property tax may cost the city just under $90,000 in revenue -- about the same amount it spends on civic organization subsidies.

Those subsidies are usually fairly small amounts individually that help support a number of community projects, such as helping pay for a part of the senior citizen center's Meals on Wheels program, helping keep the doors open on the Youth Center or supporting the Chamber of Commerce's visitor's center, among other programs.

The legislature promised to make up the personal property tax revenue loss with a one-time package of "backfill" funding, but Mayor Rist said he doesn't know yet exactly how much the city will actually get this year, and since it will be going away next year anyway, the city needs to learn how to live without it in the future.

As the state slowly begins to recover from the Great Recession, some revenue sources are up, but some also are down, in particular the city's share of state liquor revenue (people aren't drinking as much), and franchise fee revenue from services such as gas, power and cable companies that have been slowly declining over the last few years. The revenue from the cable franchise fees has been particularly hard hit as more and more people switch to satellite TV services, the mayor noted.

Furthermore, the mayor isn't convinced that next year's legislature won't continue its efforts to reduce local revenue, saying he's been warned by some observers the state may try to finish elimination of the personal property tax (which would cost the city about $340,000) and may reduce sales tax revenue sharing with the cities and counties.

"Until we know we're really out of the woods, it's only prudent to maintain a tight budget," the mayor said.

And that means departments are going to have to forego some of the requests they believe they desperately need. The police car fleet, for example, is aging, but the routine of regularly replacing the oldest vehicles has been interrupted by the economic crisis of the last five years. The older the cars get, the more maintenance they require to stay in shape. The same goes with computer systems all across the city's departments.

"Since 2008," Rist said, "we've had our thumb on all the departments, and it catches up to you. And then, as tight as we've been, every time a well hiccups it costs us $100,000. We have to take that from somewhere, and some of our departments have been squeezed hard.

"Our capabilities to provide existing services have been stretched to the max," he said, "and I don't see this getting any better."

At the same time, he said, department heads have been creative in working around the restraints and some of the efficiency improvements they've found will be carried over into the days when the economy finally recovers and revenues begin to rise again.

But right now, even projects the city would like to do because there are large amounts of grant money available, may have to be passed on because the local match is too great. The airport repaving project is likely to be one of those victims, Rist said.

The city also desperately wants to put a traffic light at N. 18th East Street and American Legion Boulevard to deal with increased traffic in that area and to improve safety for students crossing the streets. But the city's match on the $3.5 million project would come to $486,000, which it may not be able to squeeze out of existing revenue.

The city also has to come up with its share of the costs for the new software for the county's dispatch center, which could run over $50,000.

The streets program can always use more money, Rist said -- but probably won't be getting it right now. The water and sewer funds however (paid by user fees), so far have been able to stay roughly even with maintenance needs.

Rist recognizes that many of the budget requests being sought by the different city departments are legitimate. "I wish I could point to one thing and say it's not needed and we're going to cut it out and it would solve all our problems. But that's not true. A lot of these requests have value, especially in the long run.

"But right now, we're telling all the departments they have to find ways to make cuts (from their requests).

"We're not trying to be mean," Rist said, but he and the city council "take a balanced budget seriously."

Rist said the $530,000 in requests over anticipated revenue, doesn't take into account any raises or benefit increases for staff. In addition, if someone quits, the position may not be filled for a while, and there won't be any overhires, such as the extra people parks and recreation normally puts on during the summer. "To be honest, some things just won't get done," Rist said.

Things have gotten so tight for the city -- if it wants to balance its budget -- that for the first time in the last four years Rist is considering the possibility of staff cuts.

"That's the last thing we want to do," he said, "but that may be one of the options we'll have to discuss. I'd rather give our employees the option of less hours," before any staff cuts, but Rist is well aware that would mean a cut in salary. In either case, he knows, that would hurt not only individuals who work for the city, but the overall economy of the community.

That's why he's hoping the department heads can find ways to save money now, before the city council has to take action. "If it gets to that point, it's going to get brutal," he said. "I don't want to be alarmist, but we are going to balance this budget."

Workshops and hearings on each city department are being held throughout May. The city must have an adopted budget by the end of June.