Monday, April 06, 2009

The Money Pit

The City's budget for FY 2010 continues to move forward. Councilman Justin Wilson's recent constituent newsletter detailed the upcoming schedule of events:

"On April 13th, at 4:00 PM, City Council will have another public hearing on the proposed budget. On April 16th, each member must submit their preliminary add/delete worksheet. At this point in the process, every proposal for addition
or deletion to the City Manager's proposed budget must be included, and any addition must be offset by a deletion or an increase in revenue (tax or a fee).

On April 20th, the City Council meets to reconcile the proposals made by each member. This is where the proverbial 'sausage-making' occurs. Coming out of this work-session, there is generally consensus leading into the adoption on the 27th.

In accordance with state law, the City Council is required to 'advertise' a ceiling for any increase that we might make in the real estate tax rate. Under the law, the Council can adopt a real estate tax rate lower than the advertised rate, but not above. The current proposed budget includes a 4.2 cent tax increase--which keeps the average residential real estate tax bill level in 2009.

After a lengthy discussion the City Council voted to advertise a maximum rate increase of six cents--a possible increase of 1.8 cents above the City Manager's proposed increase. If the City Council chose to use the maximum increase available under this advertised rate, the average residential tax bill would increase by $86 over the course of the year."

Councilman Wilson also notes that at this point in the process, with budget adoption only a month away, "there is still a substantial amount of uncertainty" because Council has yet to receive the latest sales tax numbers, the details on the Business and Professional Licensure Tax (BPOL), as well as the impacts of other revenue re-estimates. He concludes "We do not expect to receive any good news. If anything, this additional information will probably reflect at least an additional $1 million of revenue reductions."

The adds and deletes are usually quite interesting, so the Growler will take a look at them when they come out.

Meanwhile, readers might find it amusing to peruse the 2010 budget memos. These are analyses requested from staff by the Mayor and Council, and they offer an interesting window into the elected officials' thought processes. The memo about the cost of City employee bonuses should set off a few alarm bells.