Rules of the Road

The purpose of this blog is to share with you my thoughts on issues pertaining to Oil City and Venango County and to foster discussion.

However, that requires some basic rules. Personal attacks, inappropriate language and venom-filled postings will not be tolerated. Comments will be screened, and if necessary edited, before posting.

Disagreement and a variety of opinions are encouraged, but I ask that it always be in a respectful, positive manner. So fire away, but do so cleanly

Wednesday, December 9, 2009

The 2010 Budget -- Take 2

After council’s budget directives to City Manager Ryan Eggleston on Monday, I’m not sure where we are going with the 2010 budget.

The city manager came to the Monday meeting with a pared down budget/tax proposal as requested by city council at its Nov 23 meeting.

Largely as a result of a 34 percent increase in health insurance costs, the city’s 2010 expenses were greatly inflated even as some revenues dropped. To maintain the status quo required a 1.5-mill hike in real estate taxes. On first reading council approved the budget and accompanying tax hike on a 4-to-1vote. However, council also directed the manager to try to cut costs and pare down the tax increase.

By negotiating some savings in health and other insurance costs Ryan got the tax hike down to 1.25 mills and then gave council two additional options. Cut the money for paving in half, bringing the tax hike needed to balance the budget down to 1 mill and the second option was to do that and not fill a vacancy in the police ranks, which would bring the tax increase to .8 mills.

The majority of council held out for a no-tax-hike budget. So Monday night council on second reading approved a no-tax-hike budget by decreasing the budget’s bottom line. How to achieve that was left up to the city manager.

I went along and voted for it to keep the budget process on schedule. I voiced my concerns, but not as forcefully as I should have. (A long-time friend made the latter comment to me after the meeting and I’ve been reflecting on it ever since).

I know that every member of council is troubled and sincere in believing the position they have taken is best for the city.

I think there are worst things than a tax increase. Among them the further decline of the services and conditions of the city. I fear that will be the outcome if we insist on a no-tax-increase budget –we just dig a deeper hole. Certainly I hope someone finds a magic wand and brings about an easy way to cut costs the necessary additional $232,000, but that is not my expectation.

To me, the mandated no-tax-hike approach we are using is reactionary. We don’t know what the real consequences are since the cuts are not fully vetted, nor can they be over the next three weeks. There is no strategic planning to the process. The lack of strategic planning has long been a weakness of city government.

Any cuts that force a fundamental restructuring, and it is likely some would, are also unfair to the new city manager. We need to give him the opportunity to see how the city operates and make his own recommendations for the long-term. Four weeks on the job does not allow for that.

Councilman Neil McElwee has a good point about our real estate tax rate putting us at a competitive disadvantage, especially against the neighboring townships. Raising our taxes will only make that worse.

Still, if our core services and the conditions of the city continue to decline are we not also becoming less competitive?

I don’t know what I will or will not accept at next Monday’s council meeting either in terms of cuts or tax increase. Right now, I’m favoring a tax increase over further cuts. Right now, that is the minority opinion on council, but things change.