I could assume most are probably done hearing about the budget, but in an effort to keep getting information out there, I'll keep adding to it. First, it has been said some employees were unaware of the situation or had to do their own homework. I invited all employees to a meeting on January 27th. I made 2 additional presentations to the fire department to cover all the shifts. I've uploaded the exact presentation (so some numbers are now dated).
One of the other factors in budgeting is of course a long-term outlook. While the budget only cover 12 months of spending, I have to make recommendations and the Council has to make tough decisions based on creating a budget that is sustainable beyond those 12 months. Are sales tax revenues going to bounce back in 12 months? 18 months? longer? Is unemployment going to reverse its trend in 6 months? 12 months? longer? Will income taxes from the State turn positive this year? next? Will the State withhold tax transfers to cities to make their Budget balance? Is their any end to health insurance increases? Will pension costs ever level off or will they continue to rise faster than revenues?
There are so many questions, but there are also plenty of known pressures. We know the trend for health insurance costs is about 8% a year. We know the police pension cost has doubled in 10 years. We know the fire pension has nearly quadrupled in 10 years. Construction costs have risen faster than inflation and our revenues. Electric has gone up. The cost of meeting EPA regulations for wastewater have gone up. None of this is sustainable over time without a change in the way we operate. When the entire global economy crashes as it has, it expedites the need to implement change. And when in a massive economic downturn, the choices can only be difficult. Difficult, but necessary.
