Budget outlook: Pay raises among items in Longview proposal
By Sherry Koonce firstname.lastname@example.org
Aug. 11, 2012 at 10 p.m.
Longview city officials are calling the proposed $152.1 million 2012-13 fiscal year budget "conservative" but have figured in funding for city improvements, employee raises and money for rising operational costs as well as a rate hike for water and sewer customers.
"Even with Longview's economic stability, there is still the need to budget as conservatively as possible," said City Manager David Willard. "Although we have seen increases in the cost of providing services, we understand that, as any business or family budget, we at the city must also balance our expenses with the available income."
The city anticipates receiving $60.3 million in general fund revenue, 66 percent of which will come from property and sales tax revenue.
The city anticipates $19.9 million revenue from property taxes - 2.5 percent more than this budget year. However, some of that gain is offset by a 1 percent drop in sales tax revenue, which the city also estimates at $19.9 million.
Willard said the budget has been crafted with the national recession in mind and the resulting difficulty faced by local business owners who are struggling to make a profit.
<strong>Tax revenues level</strong>
To fund the balanced budget, the city has proposed keeping the same tax rate of 50 cents per $100 valuation.
The tax bill for the owner of a $100,000 house is $500 a year. But because valuations increased 2.5 percent, the $100,000 house may have increased to $102,500. If so, that homeowner's taxes would be $512.
An additional 2 cents collected from hotel occupancy taxes has contributed to a $371,060 increase above this past year's $1.9 million.
<strong>Water rates rise</strong>
The proposed budget anticipates higher water and sewer rates. It would be the third hike in as many years.
For the average customer using 7,000 gallons of water with a 5/8 inch meter, the bill would increase from $49.87 to $53.45 a month, a difference of $3.58.
Willard said the increase is needed to offset many years when increased costs of supplying water was not passed on to customers.
<strong>Heath care costs climb</strong>
On the expense side, increases in employee self-funded health insurance alone will cost the city an additional $371,511, which is up 4.6 percent from this past year's cost of $8,097,841. The new fiscal year's employee health care cost reflects a 23 percent increase above the 2010-11 cost of $6.8 million.
City spokesman Shawn Hara said budget writers figured anticipated claims costs and stop loss premiums for claims exceeding $125,000 into the proposed budget.
<strong>Federal funds dwindle</strong>
The new spending plan anticipates significant losses in federal program dollars.
The federally funded Community Development Block Grant program, which funds community development activities, affordable housing and anti-poverty programs is down $261,610 or 27 percent from this past year's $958,783.
Collectively, the city will lose slightly less than 40 percent of its grant revenue.
Though the city's capital improvement budget is pared down this budget cycle, there is still money for improvements.
The proposed budget contains $600,000 for streets programs to enhance the $52 million streets bond approved by voters this past year. Streets to be repaired will be decided later in the year.
Another $155,000 is figured in for upgrades to the city's aging traffic signals.
The upgrades are designed to improve operations of an antiquated software system, which is prone to malfunction during storm-related events. As a by-product, the new software system is expected to synchronize traffic lights to improve traffic flow.
Among the increased expenses is a 3 percent across-the-board half-year pay raise for city employees. The proposed raise would be effective in April, mid-way through the 2012-2013 fiscal cycle.
A new city auditor position is included in the city manager's department budget of $883,539. About $90,000 of that is allocated for the auditor's salary, benefits and start-up costs such as office furniture. About $25,000 is set aside in the city manager's budget for the city's Main Street program.
The city's Parks and Recreation Department would get an increase of $88,334, mainly to fund a survey of Longview residents. The survey, performed every five years, focuses on parks, but is a gauge for all city operations.
Improvements to the city's library are on tap for the coming year, including a new drive-thru return window that will allow sorting of returned books using new software. Other library expenses in the $53,939 increase in departmental operations include completion of the iMac lab.
The cost of raw water fees from Lake O' the Pines have risen as well as the cost of sludge disposal for an increase of $37,983 in the water supply department.
At Maude Cobb Convention and Activity Center, the department's budget increased by $120,907, or 8.6 percent, largely for restroom upgrades at the exhibition center. The upgrades will make the restrooms ADA compliant.
Transit Department expenses are expected to increase by 8 percent from $2.4 million budgeted in 2011-12 to $2.5 million. Of that amount, $80,000 is budgeted for a corridor study for pedestrian access to transit services. The majority of the remainder is being rolled forward from the current budget year for projects such as improvements to the multi-modal center and additional bus shelters.
For the 2012-13 budget proposal, the total general fund balance is $12,941,301. As part of that, $2.8 million is set aside for accounting/actuarial purposes for "other post employment benefits"; $1.34 million is in reserve for the fire fighter pension liabilities.
The remaining $8.7 million is unencumbered savings - which is 14.56 percent of the budget. The city council policy requires at least a 10 percent fund balance. Hara said.
A public hearing is set Aug. 23 to consider the tax rate. On Aug. 30, the council will meet in special session for a public hearing to adopt the budget. The tax rate is scheduled to be adopted Sept. 13.