City budget proposal under microscope
City Council searched Monday for ways to knock down Mayor Derek Slaughter’s proposed $29.7 million 2021 budget that calls for a real estate tax increase of 2.5 mills.
That equates to $250 more per year for a property owner with a house assessed at $100,000, according to Joseph Pawlak, city interim finance director.
The reserve or fund balance is about $179,000. The mayor said he could never have anticipated the negative consequences the COVID-19 pandemic had on businesses and income.
Council President Randall J. Allison said while there have to be cuts in the budget, short of reducing services, cutting personnel, raising taxes or income, there isn’t much council members can do other than find some cost-savings in each line item.
Slaughter, throughout the night, expressed his eagerness to have council reduce his proposed spending plan where it saw fit, such as his own office, on supplies and magazine subscriptions or other areas where a few dollars here and there could reduce the blow on taxpayers.
The night was highlighted by the council members each trying to analyze where the cuts could come from.
“We are trying to trim where we can,” Councilwoman Liz Miele said.
“We’ve got a $1.9 million property tax increase in the mayor’s budget and there is substantial interest in minimizing that,” Councilman Adam Yoder said. “To do that we have to cut stuff out of the budget.”
That led to a warning from Pawlak.
“I caution council of taking too much out,” Pawlak said. “You will have to add it back in as costs go up.”
The city started 2020 with a year-end balance of $1.9 million and projects total expenditures of $29.7 million and a carry-over fund balance of only $178,996.
Yoder took a direct shot at Slaughter’s seeming inability to keep a promise he made during his election campaign.
“Mayor Slaughter had a message, a big mandate to win the mayor’s office. Unfortunately, it doesn’t look like we’ve done that this year,” Yoder said. “I don’t see a lot of that in here. I’d like to learn from the mayor how we live within our means. There is a gap between what people were looking for this year and what we are seeing.”
Miele also jumped in at that point.
“For better or worse, the city only has “X number of employees — those employees cost more money every year,” she said. “There is, frankly, only so much we can do to trim expenditures.”
“There is a difference because we are in dire straits because of the pandemic but deciding to trim all of the tiny bits of extra padding we put into our budget and cutting that out effectively leaves us with no cushion,” Miele said.
Miele suggested that the city remove all the money that is shaved out of the budget, drop it to the bottom line and it becomes a transfer.
“We take out money where we don’t feel it’s needed and evaluate it for next year,” she said.
Allison said he would like to see more non-profits contribute in lieu of taxes to help income.
“We do have the heaviest burden of non-profits as the county seat and biggest city,” Allison said.
“At the same time, we provide a lot of services for all these organizations that the citizens of Williamsport have to pay for and it seems like there might be more room there at least to be made aware of what is being done by some and to promote that sense of participating in that effort,” Allison said.
“We are not out to break the bank or hurt anybody’s organization, but it’s time for us to publicize it more and at least ask who can help. It’s just a thought.”
Total income from taxes and fees is projected to produce $23.7 million in revenue.
Of that amount, the city anticipated $15.6 million generated by assessing real estate tax; $900,000 from real estate tax from the prior year; $2.1 million of wage tax; $1 million in local services tax (or $52 per person working above $12,000 a year mark); $31,500 from mechanical devices tax; $1.7 million in business privilege/mercantile tax, which was shut down or slowed for about three months due to pandemic and the city decided to budget at 75 percent of collections.
The city projects $300,000 in real estate transfer tax; $285,000 in interest and penalties and $270,000 in discounts.
Other sources of revenue include $665,000 from various licenses and permits; $145,500 from fines and forfeits; $31,000 interest and $809,100 in departmental earnings.
The large number of departmental earnings were broken down for the council.
The largest of these earnings is the Benecon Health Insurance surplus of $350,000. Employee health contributions were budgeted at $76,000 and recreation pool admissions and special program income projected to be $90,000.
Other incomes listed in the proposed budget include $40,000 in projected rental inspection fees and $16,000 in rescue operation fees by fire and emergency medical services, Pawlak said.
The city also projects receiving $1.2 million in state grants and $468,000 in other grant-related funding, along with $715,000 in other income, for a total estimated income is expected to be $27.9 million with $29.8 million available.
The city has $375,000 of income from natural gas impact fees.
Expenses listed include $210,000 in utility cost; $595,200 for capital projects debt service; $60,000 in debt service on grants; $58,500 in debt service for a 2016 note; $10,000 in unemployment compensation and $2,000 for repair to the Memorial Park pool. The pool did not operate this year due to the virus.
Councilwoman Bonnie Katz asked about the TV cable franchise fee and could see benefits of a renegotiated contract. In response to Katz, Chris Cooley, information technology coordinator, said the city administration was in the process of renegotiating that franchise contract and working with Loyalsock Township on it.
“It is possible the rate could be pushed from 3 to 5 percent,” Cooley said.
“You are taxing the subscribers at that point,” he said. “Comcast does not pay the 3 percent, it is passed to subscribers as a franchise fee or like a sales tax passed onto them.” A higher rate could produce $144,666 in extra revenue.
On Bowman Field naming rights, Slaughter spoke of the potential to keep the revenue stream of $35,000 a year or more going. “Now we know there will be baseball, we can start those negotiations,” he said. “We will reach out to (organizations) in early 2021, have that wrapped up and before council for consideration.”
Council has a second budget work session at 7 p.m. tonight (Wednesday). In that session, it will review the largest cost drivers of the year — public safety, which includes police, fire and codes.
Council meets again at 6:30 p.m. Thursday, when it is scheduled to vote on Slaughter’s budget proposal on first reading. A second vote is scheduled for 6:30 p.m. Dec. 10.