It’s that time of year again.
Warren City Council held a special session Thursday night for a budget workshop in anticipation of the 2014 fiscal year.
“We’re here to carry on a discussion on how we’re going to conduct our business in 2014,” outgoing Mayor Mark Phillips said.
Incoming Mayor and current council member Maurice Cashman could not attend the session, but discussed budget issues prior to the workshop with city staff. He also serves on the city’s finance committee.
City Manager Nancy Freenock spoke briefly, giving council a brief highlight of some of the major points in the budget.
“Last year we introduced the concept of a multi-year budget,” Freenock said. “This year we have moved some things around… What is presented tonight is a budget with no tax increases.”
Freenock noted the city is looking at a plan, suggested by Cashman, to borrow for capital expenses.
During discussion of the Department of Public Works budget, Councilman Howard Ferguson suggested looking into consolidating city debt.
“I’m wondering if it would make sense to do a wrap-around loan on all these debts and include some new debt… to deal with infrastructure,” Ferguson said.
He noted interest rates are especially low at present and the move would bring currently varied interest rates on debt into line with each other and lower some that are currently high. He also noted the move could spread city debt service out.
“Mr. Cashman and I looked at that earlier this year,” Freenock said. “In some cases, there are penalties… It was determined it was not feasible.”
She noted the city will continue to look at that option.
The budget would use approximately $120,000 in city reserve funds, bringing the balance of city reserves down to approximately $1 million.
“That’s an appropriate fund balance for a city this size,” Freenock noted.
The finance committee has also asked city staff to examine tax increases of one half, one, and one and a half mills.
“We know our expenses in 2015 will increase,” Freenock said, noting the city will have to expand who it offers health insurance to under the Patient Protection and Affordable Care Act (ACA).
During discussions later in the evening, Ferguson questioned a five percent across the board increase for insurance included in the proposed budget.
He noted the figures could not be anything more than projections based on what city staff thought the ACA’s effect would be and asked how the projections were made, “based on real numbers.”
Freenock responded, “They’re not.”
New bargaining unit contracts will be instituted in 2015. Contracts for all three city bargaining units will be renegotiated over the course of 2014 and go into effect at the beginning of 2015.
Freenock announced ambulance service, earned income tax and delinquent tax revenues all came in higher than projected, which will help offset reserve spending.
Capital expenditures listed by Freenock included replacement of aging vehicles and possible restoration work at the city building, which could be offset utilizing Redevelopment Assistance Capital Program (RCAP) funds.
Following Freenock’s statement, council began looking through the budget proposed by city staff on a department-by-department basis.
Council reviewed the community development, public works, wastewater treatment, police, fire and building and codes budgets before ending the session after approximately three and a half hours and agreeing to pick up discussion at its regular meeting on Monday.
Freenock noted the proposed budget reflects a 2.5 percent salary increase for non-union employees that will not occur. Traditionally, non-union pay increases reflect contracted pay increases. The city has decided on a wage freeze for those employees in 2014.