City Budget – Some clarity needed

TEAM

The City Budget is available on line.

Let’s be honest, most of us and most of the City Council have no clue at all about what is involved in municipal government budgets, the budget preparation process or revenue forecasting.

However, the former Manager and his team, indicated a 3.5% tax increase was going to be needed and this Manager and his team seem to agree.

It should be noted that Manager Murphy and CFO Healy never try to blame the former administration for leaving them with a budget that required a tax increase. Instead they go about explaining what happened in the past that led us to where we are today.

The CFO included this statement in his budget letter: The City Council’s policy to hold taxes to minimal, if any, increases in Fiscal Years 2012-2014, while maintaining service levels despite increasing operating expenses, created a Fiscal Year 2015 budget gap that needed to be bridged.

Over the past several years, the city had been able to accomplish tax restraint, in part, by the considerable savings that our migration to the GIC generated. This in turn allowed us to reward employees for this decision by including moderate wage increases in the most recent labor agreements.

Now that the benefits of the GIC are largely realized, the compounding effect of raises has constrained the capacity of the operating budget and has necessitated an increase in the tax levy of 3.5%., as included in the “Preliminary FY15 Budget”, submitted to the City Council on March 4, 2014.

I’m not suggesting anyone is to blame or that this budget should just be approved without discussion. There are a few (and probably many) questions that need to be addressed.

Two that jumped out at me are:

A forecast for a 7% increase in Local receipts seems a bit high, how was that reached?

An increase forecast for new growth from $1.7 Million to $2.5 Million seems optimistic. How was that number reached?

Some line item increases that are listed below need some explaining (to me anyway) because of the projected increases:

Excise Tax – An increase of $845,294
Tax Liens Redeemed – projects an increase of $800,000
Treasurer Misc.- increases by $103,000.00
Special Detail Receipts- increases by $100,000.
Code and Inspection bld permits – Increases by $144,250
Pilot Program – increase $147,850 (Payment in Lieu of Taxes)
Meals tax – increase of $90,000
Medicaid reimbursement – Increased by $100,000
40R Revenue – In 2013 $150,000 was listed – Zero in 2014 and $225,000 in this Budget (What is 40R?)

After asking about the increased line items, a few decreases also need some explanation.

MV Penalty & Interest: -$452,400
Urban Redevelopment 121A : – $263,000
Medicare Part D Reimbursement: -$147,850
Auditorium Revenue: -$82,000
Reimbursement Other – Prior Years: -$495,500

CFO Bob Healy tries at the beginning of the budget document, to explain each section of the budget including showing graphs and charts that help him in making his points, so that even a simpleton like me can understand the budget a little better. It still leaves some questions on how these numbers are forecasted.

If the Manager and Mr. Healy can address these issues clearly to the Council and viewers at home Tuesday night, then this budget could and should be approved by night’s end.

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