Where's the money?


City commissioners must be glad they don’t have to vote on the 2012-2013 municipal budget before Tuesday’s primary election. Those running for re-election (or mayor, in Bill May’s case) probably would rather not have to stand for election with controversial decisions about matters such as tax increases and/or spending cuts still fresh on voters’ minds.
After City Commission members touched on fiscal topics in last week’s work session, reporter Kayleigh Zyskowski met with City Manager Fred Goins and Finance Director Steve Dawson to get the professionals’ take on issues the politicians will eventually have to resolve.
City government isn’t about to go broke. There will be enough to cover anticipated expenditures of $32.7 million in the fiscal year that begins July 1. But the projected revenue for the year is just $31.4 million, meaning the city will have to dip into its reserves to balance the budget unless something is done to increase income or decrease expenses.
Commissioners have tapped the surplus previously but Dawson warns that any time the piggy bank falls below $8 million, the municipal bond rating is at risk, potentially elevating the cost of debt for big projects like the sewer system upgrade that must be undertaken in another couple of years.
After the recession dropped the surplus to $7.1 million in 2008, the commission got busy the following year imposing a $5 monthly fee on city residents for garbage collection. The public, long accustomed to “free” collection, was infuriated. Two incumbents lost in the next election and a new three-member majority enacted “pay-as-you-throw” waste pickup, which lowered the cost for most people but also reduced fee income. Before the system change, an unexpected uptick in the surplus emboldened the commission last year to suspend the old $5 fee for six months, further depressing revenue.
Now City Manager Goins has come up with a list of ideas, some his own, some others’, to buttress accounts. Among them are a few choices he does not recommend: closing the Juniper Hill golf course and swimming pool for a year, suspending the summer sports program, furloughing workers or periodically “browning out” a fire station.
Some possibilities include a 1-5 percent decrease in departmental budgets, which could be  a stretch. Eliminating overtime pay could save $776,000 but public safety concerns probably would make it unfeasible. The city could save $233,000 by denying health insurance to workers’ spouses who have access to coverage elsewhere. A “hard” hiring freeze prohibiting replacement of workers who leave could trim $300,000, but unacceptable staff shortages might result.
The commission could also choose to reduce its subsidies to outside charities and public-service organizations. Charitable donations should be voluntary, in our opinion. But these organizations do perform worthwhile services and often enjoy widespread popularity.
On the revenue side, Goins said some commissioners suggested a 1 percent increase in the insurance premium tax. The city could also raise its 1.75 percent occupational tax to 2 percent. It was 1 percent before the last increase, about a decade ago.
Occupational taxes, collected from virtually everyone employed or doing business inside the city limits, took a hit when state government cut its workforce through early-retirement incentives, and again when the economic collapse put a stop to annual cost-of-living raises for state employees. If the city raises its rate, those workers will have to share even more of their frozen paychecks with City Hall.
No final decisions are expected when commission members convene for another work session Monday, so  the candidates don’t yet have to reveal where they stand. But they’ll need to make up their minds before July 1, well ahead of the November runoff election. Then the second-guessing can begin in earnest.

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