A Fiscal Approach For City Council to Consider
As the city slowly recovers from the economic doldrums it’s time to consider some relief for the long suffering city employees who have seen their pay frozen at 2008 levels as their workload increased due to the hiring freeze. Those workers will soon begin to look for better paying jobs elsewhere. After all, the cost of living index has gone up 13% since 2008 while city worker pay has remained flat. One way to reduce an employee turnover is for the voters to make a minor investment in employee compensation. If the city has to spend less general fund dollars on street repair and maintenance those dollars can be diverted to a small employee pay increase..
In past years, including 2008, Wilmington’s taxpayer-supported general fund budget did not include any money transfers to the street Repair and Maintenance department (M & R) fund. The department was able to operate on funds generated mainly by fees on motor vehicle registrations. The department’s budget for 2008 was $1.3 million.
In 2008 a local company moved its truck license registrations out of state. That move caused a reduction of approximately $700,000 per year from M & R’s 2009 operating budget.
For the first time in many, many years the 2009 budget included a general fund transfer to the street M & R department. The $684,000 transfer was barely noted in a year of record general fund revenue and M & R work went on with the same funding levels as in past years.
Projected general fund revenue for 2013 and beyond has started to stabilize after falling steeply over the last several years. The general fund transfer to the M & R operating fund this year is down $351 thousand dollars from 2010’s allocation. This fact reinforces the need for additional revenue sources in order to maintain necessary services. This is an unsustainable financial situation in the near and even mid term time frame
The only way to at least slow the maintenance and service shortfall is to offer voters an opportunity to pass a dedicated 1.5 mill property tax assessment for street repair and maintenance. The annual property tax increase would be $3.85 per month for each $100,000 of appraised owner occupied home value. The cost for seniors would be $2.90 per month. The revenue from the levy, $380,000 would not be enough to eliminate the need for some general fund transfer but it would reduce the amount significantly. A tax increase of any kind is a hard sell any time - and especially during hard times - however, by asking us voters to become a part of the decision-making process, we become responsible for the outcome good or bad. If we understand that services such as snow and ice removal from secondary streets will have to be curtailed or eliminated, and a reduction in police and fire/emergency manning could result from a no vote we will at least have been forewarned.
The city council could prepare the voters for a ballot issue by open and reasoned explanation that city government is taking positive steps to reduce spending.
Taking steps such as these would be a start:
a. Continuing the hiring freeze and only fill position vacancies if the real security of the city would be compromised.
b. Ask the Human Resource office to analyze the entire city work force for employees that are near enough to retirement to make the buying out their retirement obligation fiscally sound.
The list is only a suggestion and other means of deficit reduction are certainly available and worth consideration. If the city acts responsibly in reducing expenses and the voters reject a levy, the voters must then take some responsibility for any resultant loss of services. Whether a levy passes or fails is not as important as is voter participation in the budget process.
Paul Hunter firstname.lastname@example.org