City budget for 2012-13 14% leaner

Sean C. Morgan

The city of Sweet Home’s proposed 2012-13 budget is 14 percent smaller than the 2011-12 fiscal year. Proposed expenditures are 15 percent lower.

The total budget for the 2012-13 fiscal year, which begins on July 1, is $22 million, down from $25.7 million. Excluding transfers, contingencies and unappropriated fund balances – leaving only expenditures – the budget decreases from $20.2 million to $17 million.

“During these past few years, the city has been confronted with significant reductions in property tax revenues, experienced declines in various revenue sources, all while continuing to experience increases in operating expenses,” said City Manager Craig Martin Thursday evening, as he introduced the budget proposal. “To address these issues, proactive steps are being taken by staff to limit funding requests and reduce expenditures whenever possible across all city operations.”

The budget reduces capital outlays by $2.5 million, materials and services by $600,000 and personnel by $83,000 based on eliminated positions in the General Fund, Library Fund and Police Services Fund. Debt service increases by $67,000. Contingencies and ending fund balances increase by $49,500.

Personnel cuts include one position in the Building Division, a police officer, a dispatcher and a half-time library assistant.

General employees may receive a 3-percent step increase if eligible, based on work performance, while police employees will receive a 3-percent general wage increase. City positions have a maximum of five steps

Hansurance coverage is expected to increase by 10.6 percent, and dental insurance is estimated to increase by 9.1 percent.

Overall, the general fund would decrease by $259,000. The Police Department is decreasing spending by $142,000.

The water utility budget decreases by $75,000, and wastewater is decreasing by $262,000.

The library is increasing its budget by $54,000, and the street fund is increasing by $445,000.

The 2012-13 budget includes $7.4 million in capital improvements, $6 million as part of the fourth phase of the city’s inflow and infiltration reduction project. Inflow and infiltration is storm water that enters the sewer system through deteriorating pipes and cross connections with storm drains. During heavy rain, it can cause the Wastewater Treatment Plant to bypass untreated wastewater, and the Department of Environmental Quality is requiring the city to reduce I&I.

The Budget Committee will discuss the details of each of these funds during a series of meetings during the next couple of weeks.

Revenues are being affected by a $1.7 million decrease in property values and an additional $321,000 in compression losses, created by property tax limitations, equal to the compression losses of 2011-12.

Revenues from franchise fees, court fees, state shared taxes and rental property are expected to increase by about $81,000.

The budget includes no increases in water rates, while increases in wastewater rates are proposed.

“Estimated compression losses are based upon actual reductions, which occurred in 2011-12 in the hopes of avoiding any further spending cuts due to revenue shortfalls,” Martin said. “Should more tax revenue than is estimated be realized, a supplemental budget could restore funding to impacted services and programs.”

When the city learned of unanticipated compression losses in October, the City Council held an emergency meeting and diverted fund intended for the city’s Building Reserve Fund to the police and library funds to help avoid “potentially catastrophic” cuts in police and library levies, Martin said. The current budget reflects those decreases, and the proposed 2012-13 budget is lower than actual 2010-11 levels.

The losses were primarily due to the foreclosure of some 380 acres of former Western States Land Reliance Trust property, Martin said.

The proposed budget assumes a protracted and relatively flat economic recovery, Martin said. “As a result, property taxes and fees related to city services are not projected to increase. Rather we may anticipate many of them to continue declining. In response to these declines, city staff has been resilient by being creative and dedicated to continuing providing quality services in spite of significantly reduced resources. Our past saving efforts have helped us weather the early impacts of this economic storm, but we are quickly exhausting our cash reserves and may have to look further to these reserves as well as additional reductions in future years to keep us afloat.”

The Budget Committee elected Chuck Begley to serve as chairman. Begley was vice chairman last year. Gerritt Schaffer was elected vice chairman.

The Budget Committee includes councilors Marybeth Angulo, Jim Gourley, Mike Hall, Scott McKee Jr., Greg Mahler and Ron Rodgers; Mayor Craig Fentiman; and citizen members Andrew Allen, Begley, Stephanie Boccardo, Bruce Hobbs, Greg Korn, Schaffer and Dave Trask.The committee will meet May 1-4 at 6:30 p.m. to review budget details.