Council begins to paint budget picture

The Lebanon City Council is working to whip the city's next budget into shape.

Finance Director Russell Lee said current working numbers are a "snapshot" of what the city's finances look like at the moment, figures that could change because the situation is fluid.

"By the time I finish it, it will change," Lee said.

The Lebanon City Council is working to whip the city's next budget into shape.
Finance Director Russell Lee said current working numbers are a "snapshot" of what the city's finances look like at the moment, figures that could change because the situation is fluid.
"By the time I finish it, it will change," Lee said.
He presented the council a summary of the general fund budget it requested. In it, Lee outlined his best estimates ofthe "major changes" for next year's budget. In the summary, Lee said the 2013-14 budget begins with a deficit of more than $2.5 million. Lee estimates once the dust settles and the new budget is approved, the general fund deficit will grow to more than $3.6 million.
The summary has a long list of expected cost increases, the largest is a projected 15 percent increase in health care coverage for city employees estimated at nearly $450,000.
The city also plans to add a personnel director with a projected $103,690 annual salary. Lee said the figure includes not only that position's salary, but also retirement and health care costs that will vary depending on whether the person hired wants individual or family coverage.
The city will also and a public safety director and reorganizing the public safety department at an estimated cost of $65,149.01.
"Some people at the department are working 12 hours on/12 hours off, three days a week, so this will be a reorganization," Lee said.
The city anticipates less revenue in several areas, including a projected $10,000 cut in state corporate excise tax, $20,000 less in fees from the juvenile docket and another $10,000 less in interest earnings. In larger numbers, the city looks to collect $250,000 less in loan proceeds and $115,580 in reduced transfers from the Jimmy Floyd Family Life Center.
Lee suggested two things the city might consider to bring down the projected $3.616 million general fund deficit. One would be a property tax increase of 45.21 cents, which he estimates would raise about $80,000 for each cent increase or about $3.616 million.
Another idea would be instituting a $16 monthly sanitation fee for city residents, which he estimates would reduce the deficit by $1,15 million. The city currently taxes property owners at a rate of 34.56 cents per $100 assessed value. If his proposal is accepted by the council, Lebanon's property tax rate would rise to 79.77 cents.
"Actually they should raise the property tax rate about half a buck," Lee said. "The city has a very low tax rate compared to surroundin cities, and it hasn't been raised since 1992."
Lee said he wasn't advocating these ideas. He said they were just possible solutions to the city's deficit. He said the city could also consider parts of each idea, for example, raising the property tax by a smaller rate and/or combining it with a smaller monthly sanitation fee.
"These are just a couple ways it can be done," Lee said. "Orthey could use a combination of those ways or something entirely different."
Lee said he realized raising the property tax rate would be an unpopular move. He noted Gallatin has a property tax rate of 99 cents with an $8 per month sanitation fee.
"Even with an 80-cent property tax rate, it would still be 20 percent below most," Lee said.
Lee also said if citizens had approved the proposed half-cent property tax hike on the last ballot in November, it would have meant about $3.4 million more in the city's budget and would have come close to taking care of the entire projected deficit.
"I can't fault the voters for rejecting it though," he said.
Lee doesn't envy councilors' hard choices they will have to make.
"Why anyone would want that job is beyond me," Lee said. "At least half the city is always angry with you no matter what you do."
Ward 3 Councilman Rob Cesternino said any talk of how to reduce the city's budget deficit is premature.
"It's too soon yet; we just got the numbers from Russell," he said. "Until we go department by department and ask them what they need, what they want and if what they need is critical, we won't know. We have to have all those conservations."
As to Lee's comment that he didn't know why anyone would want to be a city councilor, Cesternino said he was motivated by a source close to home – his wife.
"I used to go to the city council meetings when we first moved here, and my wife told me not to gripe about the things I heard, but to suit up and get in the game," he said.
The ongoing budget process will continue when the council meets Wednesday at 5:30 p.m. at Lebanon City Hall.
"We will be discussing the mayor's area, the city attorney's area and my area," Lee said.