Several on City council don't want tax increase
Last Updated on 2/23/2012
Published on 4/26/2009
By Tommy Howard
thoward@gtowntimes.com
Budgets are always tough, and the one being worked on for Georgetown is no exception.
With a long list of needs and wants facing them, several members of city council say they don't want to raise taxes. They'd rather shave the budget some more to avoid even a cost-of-living increase.
During a March 20-21 budget retreat at the Wampee Conference Center at Pinopolis, city finance director Jessica Miller told council she thought they should increase taxes by 3.9 percent in order to help pay for a range of capital and operating expense items put forward by various department heads.
That retreat was the first meeting attended by new city administrator Chris Eldridge, a full 10 days before he officially began work.
Now, Eldridge told council members Thursday, he and staff are recommending:
* no wage increases
* establishment of a take-home vehicle policy for all city employees
* on-call pay
* health insurance changes
* significant reductions in budgets from department requests
Bottom line
Throughout the 90-minute workshop, there was a lot of discussion about insurance costs, capital items and more.
Capital requests started out at $3.1 million. That figure has now been reduced to $413,500.
"I would like very much if we could squeeze another $125,000 out of this [budget] so we don't have to have that tax increase," councilman Jack Scoville said.
"I agree with that," Paige Sawyer said.
Looking at some of the bigger ticket items in the proposed budget, Scoville said "The analysis we did last year was that it's cheaper to do debt millage than it is to do a lease-purchase."
"It's kind of magical how the debt millage is almost the same amount as what you used to get from the electric fund," Eldridge observed. "About $400,000."
Peggy Wayne asked, "What if you cut hours per week down to 36, instead of 40? Wouldn't that be a significant savings?"
Eldridge said something like that, mandating furloughs, is what some other governments are doing.
While that discussion didn't go further, a quick example shows that could lead to a significant savings.
Even at just $10 an hour, a one-day furlough per pay period, multiplied by 200 employees, would work out to $416,000 per year.
Rudolph Bradley noted that one of the handouts showed the city had a $12 million "unaudited cash position."
"Why would we consider debt millage?," Bradley asked.
"You can make that choice," Eldridge replied. "But, if you use that, then it's not available anymore."
"Since my tenure here," Bradley said, "we have been financially burdening the citizens regularly. I'm looking forward to being able to tell the citizens" there's not a tax increase.
Bradley, Scoville and Wayne will face Mayor Lynn Wood Wilson in the June Democratic primary for the mayor's seat. The winner of that primary will face Republican Marty Tennant and likely petition candidate Bob Sizemore in the November election.
Wilson said he talked with someone from Santee Cooper. That person "told me our power is going up," he said.
Miller, the finance director, said she and her staff have budgeted a 6 percent increase in electricity.
"It will probably be going up for several years," she said.
Retiree insurance
Also, Miller noted, GASB 45 is not a budgeted item, but is a cash item that the city faces.
Basically, that means there have to be funds on hand to cover the cost of various retiree benefits, including health insurance.
"The decisions you make will affect taxpayers for years," Miller said.
GASB 45 "is a huge burden on taxpayers, what you're paying for retirees," Eldridge added. "It's close to $250 to $300 per employee per month for those who are insuring their families."
"If we shift the insurance to the employee, that's somewhat like a pay cut, because they are paying more of that cost."
Eldridge noted that with 200 people working for the city, "That's your biggest expense."
Cash position
On Friday, Walt Ackerman of the finance department provided the Georgetown Times with a year-end (June 30, 2009) projection.
At the end of March, the city showed it had $20 million in cash and investments, with $8 million in various restrictions and obligations.
Looking ahead to June 30, Ackerman showed that the available cash at that date would be just $6.8 million.
And, of that amount, $5.4 million is a "potential GASB 45 liability" for the end of the fiscal year.
Miller gave an example after the workshop.
A person may have cash in the bank that seems like a lot. However, from that cash the person or family will have to make the house or rent payment, car payment, buy groceries and medicines, put gas in the car, pay the light and water bills and so on.
The cash is in the checking account -- with some more money in a savings account -- but those assorted bills will have to be paid, even though they aren't due just yet.
That's the sort of principle the city faces with its cash position, restricted cash, reserves and liabilities.
More meetings
City council will have another budget workshop on Thursday, May 7.
For last Thursday's meeting, six of seven members of council were present. Brendon Barber was not at the meeting.
Another session has been set for Thursday, May 28. Also, Tuesday, May 19, has been set aside if needed for a budget workshop.
Council member C.C. Smalls said at the end of Thursday's meeting that he would like to have a special meeting soon -- in executive session -- to discuss a personnel matter.
That meeting has now been scheduled for Thursday, April 30, 2009 at 4:30 p.m. in Council Chambers in City Hall, located at 120 N Fraser St. in Georgetown.
