MAYOR UNVEILS NO MILL RATE INCREASE PROPOSAL

I have released the following tax proposal this afternoon. It includes no increase in the mill rate, versus the 1.15 percent which has been proposed. The council will discuss the proposal tonight:

To: The Common Council
From: The Mayor
Date: 10 October 2008

As we approach some hard decisions on the 2009 budget, I have been working with staff to develop a plan to balance the budget, without raising the mill rate. I CANNOT support any rate increase, in light of the difficult economic times we are all facing. When I was first selected as mayor in 2003, I ran on a platform of increased growth translating to increasing tax revenue without raising the mill rate. Under my proposal, we would:

* Reduce the mill rate to the save level it was in 2008
* Fund our landfill costs
* Reduce the 2010 capital budget list by $30,000
* Fund the purchase of a new rescue truck without borrowing. This means we have purchased two fire department vehicles and an emergency government vehicle in the past two years WITHOUT any additional borrowing

ASSUMPTIONS
$15,720 - Surplus after our last budget meeting (This includes the additional money needed for health insurance in 2009)
$4,072 - Increase in state computer aid payment
$19,792 - CURRENT SURPLUS
BUDGET ACTIONS
* ACTION (FISCAL IMPACT) - OVERALL SURPLUS/BALANCE
* Fund $142,500 for the new fire rescue truck (This includes the city’s covering the second half payments from the Towns of Nepuskum and Ripon ($17,500), which must be repaid by April 1, 2010) – We currently have $125,000 in the 2009 budget. I am recommending we take $42,500 from the Equipment Replacement Fund, which has $134,000, and the remainder from the levy, leaving $91,500) ($25,000) - $44,792
* Purchase the 3-ton road roller (which was pushed back to 2010 in proposed budget)
(-$30,000) - $14,792
* Remove the $10,000 in proposed funding for the Murray Park Trail system. No plan has been approved at this time. I would advocate we set this as a 2009 goal, including possible land acquisition and the investigation of removing the existing railroad abutments from the trail as part of the project ($10,000) - $24,792
* Remove the $21,000 from the police department for Captain Stieber’s sick leave retirement payout. Fund the payout from the sick leave reserve fund, which we set up in 2007 with the one-year cost savings from going to a HSA health insurance system ($21,000) - $45,792
* Reduce funds for the taxi (This would cut the levy need for the taxi operation from $22,700 to $5,000, based on the Council’s willingness to impose a $.25 across the board increase in fares)
($17,700 ) - $63,492
* Reduce the mill rate to the same amount as 2008 - (-$30,698) - $32,794
* Place the remainder in contingency for landfill costs - (-$32,794) - $0

FURTHER SUGGESTIONS
* I would recommend that any money budgeted for city stormwater management come from the money in our reserve fund, which would obviously reduce that overall fund.
* One fundamental fact that we have done little to nothing to resolve is the ever-increasing burden of health insurance on the city budget. It remains a time bomb, which will eventually implode within our budget. I STRONGLY encourage that we sit down with our insurance providers and our unions, and either explore options to reduce the annual increases or increase the contributions of our employees to the costs. This year’s 11 percent increase is absolutely an unsustainable number for future years. The current ratio of annual increases to our annual tax growth GUARANTEES a financial apocalypse for the city, as it does virtually every other level of government. We are using reserve funds to balance the budget this year. What will we do in 2009???????
* I would strongly suggest that we consider doing the Ransom Street project entirely in 2010, rather than spread it over three years. An additional two years will only translate into additional costs, and since we are borrowing the money (in all likelihood), let’s do it in one year to also reduce the inconvenience to the residents.