School Board members, including School Superintendent Dr. Lois Berlin, were on hand at the work session tonight concerned that a sudden enthusiasm by the Council, first expressed a week ago, for even further budget cuts might occur. However, their concerns were laid to rest by a definitive Council response to a question by Mayor Robin Gardner on just that subject.
The meeting was called to evaluate a report by City Manager Wyatt Shields that the Council had asked him to provide a week ago. It involved laying out concrete scenarios for what it would do to vital City services if, instead of the budget Shields recommended last month to make deep cuts but still raise the real estate tax rate by 20 cents, there were even deeper cuts, decreasing the tax rate increase to either 10 or 15 cents.
Shields presented a 38-page report reviewing every “line of service” in the City government and the consequences for their operations in Shields’ current proposed budget, in one that limits the tax rate increase to 15 cents, and another limiting it to 10 cents. Holding the rate to 10 cents, while excluding further cuts from the schools, would, for example, result in 44 layoffs in the City government of a total of 200 employees.
The Council decided that, in addition to exempting the schools from more cuts, to take the notion of holding the rate to 10 cents off the table, as well. Mayor Gardner and Vice Mayor Hal Lippman publicly stated that they prefer keeping the rate at Shields’ 20-cent increase level, with options for savings in particular areas.
Mayor Gardner said that she wished the kind of information that was provided, and discussion taken, tonight would have happened six weeks ago, as the date for the final approval of the FY11 budget looms on April 26. Shields added that he felt the exercise of the Council coming to grips with the consequences of reducing or eliminating specific lines of service was also the best way for it to decide on a budget, rather than simply reversing to comprehensive dollar targets.
Other decisions about the budget were left open at the conclusion of the meeting tonight. A town hall meeting to garner public input will be held Saturday morning at the Community Center, and a public hearing on the budget will be held at the opening of the City Council meeting Monday night at 7:30 p.m.
Tonight, Councilman Dan Maller raised the question of why the FY11 budget should include a restoration of the City’s fund balance to eight percent of the total annual expenditures when, he said, it amounted to taking money out of citizens’ pockets and holding it in the bank. However, the City’s Chief Financial Officer John Tuohy noted that the City would be putting itself at risk if it did not restore a minimum sustained balance. This last year, for example, it was noted, the City’s needed the fund balance buffer against an unusual assault on its resources, first by a negative court ruling on its ability to extract a return on investment from its water fund and then on the results on a sales tax audit by the state that deprived the City of over a million dollars.
Tuohy also noted, in a solemn note during that discussion, that he predicted a continued decline in the City’s commercial real estate values into the next budget cycle of 10 percent or higher. He said that residential real estate values will also continue to drop, but at a much smaller rate.