City’s budget taking shape
Ironton leaders will soon vote on a new budget that they contend will strengthen services to residents and position the city well for the future. But the proposal may cost citizens a little more each month than originally projected.
A new budget recommended by Ironton’s finance committee proposes to bring back five city employees who were laid off last year, a move that is paid for in part by keeping the city’s monthly municipal fee at $14 rather than reducing it to $11 as outlined last year.
The proposal includes a 6 percent wage increase for union and non-union employees, while increasing union employees’ retirement pickup to 7.5 percent. Non-union employees began paying this last year but the city’s unions wouldn’t agree to those concessions. Whether or not they will this year is still unknown, with a major caveat of the newly proposed plan being that many of the figures are contingent upon the ongoing negotiations with two of the city’s unions.
Ironton Mayor Rich Blankenship said he hopes to present police and fire contracts to council at its next meeting.
Blankenship also said he has been working on reorganizing the city’s workforce to better serve the citizens.
“We want to provide quality services and justify this budget,” he said. “What I’ve been doing for the last six or eight months now is revaluating the departments, the workforce we have, because of the cuts that had to be made last year. … We are well on our way to developing a strategy to adapt to these and organize our workforce in a way we can get work done in the city.”
The proposed budget was unanimously recommended by all three committee members at its meeting on Feb. 28 and could be put to a vote by the city council as a whole on March 14.
Here is a breakdown of key elements in the proposal:
The city’s general fund is where the finances for the bulk of its operations are handled including police, fire and administrative positions. In the latest draft, the general fund revenue for the city is expected to be about $5.4 million with expenditures at just over $5.2 million.
The city started 2013 with a deficit of more than $56,000, due in part to overtime expenses in understaffed departments that ate away at the carryover, according to city finance director Kristen Martin.
With the proposed changes from this budget and the decisions from 2012 that will fully take effect this year, the general fund is projected to have a $200,000 carryover to begin 2014.
The biggest changes involve growing the city’s workforce while also addressing compensation and benefits.
The proposed budget would allow the city to bring back five employees who were laid off in 2012.
In all, the city’s workforce was cut by about 12 employees last year after council adopted a budget that required all city employees to begin paying 7.5 percent of their retirement pickup.
Rather than agree to the increase, the American Federation of State, County, and Municipal Employees (AFSCME) Local 771 and the Fraternal Order of Police unions laid off employees to achieve the 7.5 percent cut in their departments. The firefighters union agreed to other concessions to reach the 7.5 percent savings.
Finance committee members have been vocal that the layoffs resulted in large amounts of overtime in those departments and cost the city more than it had hoped to save.
In the police department, overtime totaled about $85,000 in 2012, with unemployment at about $20,000. In 2011, the police department did not have any unemployment expenses but overtime was about $80,000.
The fire department racked up about $108,000 in overtime in 2012, although the department made their savings by beginning to pay 3 percent of their pension pickup and take cuts to food and uniform allowances; the department lost one employee voluntarily. Fire department overtime in 2011 was about $95,000.
To curb those overtime and unemployment costs, the newly proposed budget seeks to bring back three police officers and one firefighter.
“We are undermanned in our police department,” Blankenship said. “We need more police officers. We want to provide a safe city, the best that we possibly can for our citizens. It has been difficult for the police and I am holding them accountable to do their job as well and do what’s right.”
The budget for the police department would increase from $1.26 million in 2012 to $1.51 million for 2013. Overtime costs are expected to drop to $70,000 with no unemployment expense.
The fire department’s budget increases by about $58,000 to $1.38 million. Overtime is expected to drop to $80,000.
The budget also includes one additional income tax clerk and that position has already been filled, Blankenship said. The clerk was the last remaining AFSCME employee who was available for recall. Others have found other jobs or declined the position, Blankenship said.
The extra clerk increased that department’s budget from $85,000 in 2012 to about $130,000 this year.
The new proposal also offers a 6 percent wage increase for all employees, but requires union personnel to pay 7.5 percent of their retirement pickup. Currently, union employees do not pay anything towards retirement, with the city covering the entire 10 percent as well as the standard 14 percent employer share.
Previous budget drafts already included that same increase for the 19 non-union workers who took the 7.5 percent increase in employee contribution to retirement pickup last year. The increase is still included in the new plan.
The AFSCME and FOP unions have been in negotiations since January and April of 2012, respectively, and the issue has yet to be resolved.
New contracts that would have kept the status quo for those unions were brought to council for a vote in late January, but an even split between those for and against the terms of the contracts halted an agreement.
Blankenship said he hopes to have fire and police contacts to present to council on March 14, but the AFSCME contract is still a little farther off.
The firefighters union agreed to open negotiations three months early and they are discussing wages, pensions and minimum staffing requirements. Right now, the contract requires four firefighters be at the station at all times.
Currently, there are no plans to bring back any other city employees, Blankenship said, as there are not any AFSCME employees left to call back.
Rather than work with understaffed departments, Blankenship said he has been working on a weekly schedule to use all the public service employees in one big labor pool and transfer them as needed.
“If I don’t have a water leak today, I’m transferring four water distribution guys into our street department so we can clean alleys, pick up trash, patch potholes,” he said. “… Running an entire city, you don’t just come up with a plan overnight and expect it to work. It may look good on paper, but when you’re out there dealing with 25 plus issues a day, you can’t always stick to that schedule. We have to adapt to whatever comes about. I believe we do have good employees. We just have to reorganize and manage our workforce in a different manner.”
Adding more revenue to the city’s budget is a proposal to keep the monthly municipal fee at $14, rather than lower it to $11 as previously expected.
Last April, council raised the fee from $8 to $14, which brought an additional $450,000 to the city. The fee is set to decrease to $11 this April, which would reduce the revenue by nearly $130,000.
By keeping the fee at $14, the city is expected to bring in about $896,000, a reflection of an entire year at that rate.
“If the proposed budget passes, I know it has the $14 municipal fee,” Blankenship said. “My plan is to justify that $14 per month per resident. Just because our workforce has decreased, our workload has not. And I have to rearrange and reorganize in order to get things done.”
The city’s income tax collections are also expected to boost revenue. This reflects an increase of about $294,000 due to the repeal of the long-standing reciprocity agreement that went into effect last April.
The revenue also reflects a $175,000 loan the city took for the purchase of five police cruisers. Since the money was paid to the city from a financial institution, it must be recorded as revenue.
The police department’s expense budget for 2013 reflects that this money will be spent on the project.
City police dispatching was disbanded in June but the expenses still totaled more than $105,000 for the partial year. This year, there will be no expenses.
Expense increases were budgeted for all departments in the general fund, including a 5 percent hike in hospitalization costs, 3.5 percent in worker’s compensation and 3 percent across the board in every other operating account, such as supplies, fuel, utilities and maintenance.
Several questions about the overall financial impact of the proposed budget including the net difference between the slated pay raises and the increased employee PERS contributions were not answered by the city’s finance department as of press time.
Council approved last month a 16-cent increase in water usage rates from $5.30 per thousand gallons of water to $5.46.
The increase is expected to bring in about $37,000 more in revenue for the water fund.
The increase will continue for the next two years and sets 3 percent increases in January 2014, making the rate $5.63 per thousand gallons and in January 2015, setting it at $5.79.
The fund began 2012 and 2013 with a negative balance of more than $40,000. Martin said the increase in water rates will hopefully build a cushion for the department, which employees 10 people. The department is expected to end 2013 with a carryover of $28,000.
The department has a budget of about $1.8 million for 2013. Of that, $1.6 million comes from the sale of water, while $138,000 comes from the $2.50 administrative fee on each customer’s bill.
In expenses, the water fund’s administrative department is budgeted at about $220,000, the filtration department at $1.03 million, distribution at about $463,000 and meters department at about $70,000 — for a total of $1.79 million in expenses.
The filtration and distribution departments lost one employee each to layoffs last year and those positions have not been budgeted back in at this time.
The city’s sanitation department began the year with a more than $77,000 carryover.
Revenue for the department is expected to be more than $713,000, most of which comes from the garbage fee included on water bills.
The $11.50 per month fee is expected to bring in more than $641,000 this year.
Six percent of that fee will be set aside to repay a loan for a new garbage truck, which was approved by council in January.
Total expenses for the sanitation department are expected to be about $647,000, leaving a carryover of about $66,000 to end the year.
The city’s wastewater department is expected to operate on a $3.2 million budget, $1.2 million of that from usage fees.
Expenses are split between the treatment plant and the collection systems department, totaling about $2.2 million.
The department began the year with a $1.3 million carryover and is expected to have about a $1 million carryover at the end of 2013.
Included in the revenue for the department this year is $750,000 transferred from a trust fund to complete a manhole-relining project. The project is part of the city’s ongoing EPA-mandated sewer separation project.
The $750,000 is also reflected in the treatment plant’s expenses.
A payment of $315,000 towards debt on the water treatment plant tank is also included in expenses.
Storm water department
This department also includes a $750,000 transfer from the same trust fund to help pay for the manhole-relining project. That money is also reflected in the department’s revenue and expenses.
The department began the year with a $1.8 million carryover and the revenue collected, which includes the $750,000, as well as $480,000 from storm utility fees, is expected to be about $3.1 million.
Expenditures for the year are budgeted at about $1.8 million.
The department has no employees, but this year, $29,000 in salary is budgeted for a temporary employee to install storm drains in the Woodlawn area of Ironton for the sewer separation project.
Considered Phase I of the ongoing project, the installation of storm drains is expected to cost about $300,000 and is reflected in the year’s expenses.
The department is still expected to see a carryover of about $1.2 million at the end of the year.