City Council

CITY OF SARATOGA SPRINGS 2009 BUDGET AMENDMENT WORKSHOP CITY COUNCIL ROOM MONDAY, MAY 18, 2009 PRESENT: Scott Johnson, Mayor John Franck, Commissioner of Accounts Ken Ivins, Commissioner of Finance Anthony Scirocco, Commissioner of DPW STAFF PRESENT: Michele Boxley, Deputy Commissioner, Accounts Eileen Finneran, Deputy Commissioner, DPS Kate Jarosh, Deputy Commissioner, Finance Shauna Sutton, Deputy Mayor Patrick Design, Deputy Commissioner, DPW EXCUSED: Joe Scala, City Attorney Ron Kim, Commissioner of DPS RECORDING OF PROCEEDING The proceedings of this meeting were taped for the benefit of the secretary. Because the minutes are not a verbatim record of the proceedings, the minutes are not a word-for-word transcript. CALL TO ORDER Mayor Johnson called the meeting to order at 6:55 p.m. Commissioner Ivins stated he would like to give the Council a chance to talk about the budget and any ideas they have. There will be another budget workshop tomorrow evening at 6 p.m. He hoped to get all changes/cuts from the Council by the end of this week. He plans to do a presentation at the June 2nd City Council Meeting with another budget workshop following that. Commissioner Scirocco stated his department has been conscientious about the DPW budget. They were cut $497,000 for 2009 while everyone else received minimal cuts. At this time, he feels they areright where they should be with expenditures. If Commissioner Ivins is looking to cut bodies or funding he needs to know what the number is he is looking for them to cut; $2 million, $3 million? Commissioner Ivins explained he his looking to make $3 million in cuts. Also, MVP wants to pass along a surcharge from the governor’s office of about 4% of our health care costs. Commissioner Scirocco asked Commissioner Ivins if there is a specific number he is looking for DPW to cut based on the size of their budget. There are cuts DPW can make such as services, but he needs to know what Commissioner Ivins is after. They have been trying to live within the current budget and still provide essential services. He doesn’t know where to go from here. 2009 Budget Amendment Workshop 5/18/09 Commissioner Ivins stated he hasn’t come up with a specific number for each department to cut. He would like to see each department make cuts on their own and adjust from there. He could make the cuts for each department but would rather each department offer the cuts. Commissioner Scirocco stated they realized from day one they weren’t going to get the money from the VLT, but he thought they should have left the whole VLT amount in the budget. The money didn’t happen. The concern is we didn’t have a tax increase either and that hurt us. Are we looking at a tax increase in 2010 to compensate for shortfalls in this budget? He understands where we are with the economy and he understands they have to make some cuts; they knew that early on but they as a Council still passed a 0% budget not leaving us any room in an economy that wasn’t going to give anything back. A $1 million dollars can be from his budget but that will require cutting bodies and services. The 4th of July celebration can’t happen if they have to make those kinds of cuts because they don’t have the personnel to do those kinds of things. He would like to see what else is going to happen before he makes any big cuts in his budget because he took the biggest budget hit in 2009. What is everyone else doing here? They are bare bones and providing essential services. If they cut back, they will have to cut back bodies and on essential services. In 1998, the Board of Supervisors gave the City $500,000 when they gave the City half the admissions money. We need to start lobbying the County for some of that revenue; there is probably another $500,000 sitting down there. There is also OTB money down there. He would be glad to lead the charge down there. He believes the sales tax formula is out of the question. He brought Kathy Moran, who is his budget person, she is aware of more budget issues than he is. If there are any questions or concerns, he would like to refer them to her and she can sit down with him and Commissioner Ivins and go over the budget and look at some of the key points. Public Works and Public Safety provide essential services and visual services. He stated again he would like to see what everyone else is going to put on the table, then they can work together to try to trim the budget a little. Commissioner Ivins stated he will set a time up for later in the week with Commissioner Scirocco and his staff to see where he can help them make cuts. Mayor Johnson stated he went through his 2009 budget line by line. He has done some trimming. There are certain positions that aren’t filled in the City. They are reorganizing the building department and have expanded the abilities of the current inspectors to allow them to issue building permits. He will defer hiring anyone for the senior building inspector for the rest of the year, they will not be filling the secretary position in Civil Service, there is a part time telephone operator they cut back, a part time building department stenographer funding has been eliminated, and reduced a portion of the heritage area coordinator. The total savings is approximately $80,000. He is also looking at the soon to be vacant human resource position and how to handle that. Non-payroll cuts he was able to make totaled another $3,000. He will continue to look for cuts; however he already made significant cuts before with the initial 2009 budget. There isn’t much revenue produced by his department; they can look at raising some fees. They don’t want to discourage development in the city. He feels as a Council they need to recognize that they have to look at the reserves to close some of the deficit. He suggested examining the hotel occupancy tax. The City gets the least amount of hotel tax money compared to the City Center Authority and the Convention & Tourism Bureau. The question is could the City sustain a 1% increase? If the increase was put into place for the balance of 2009, that would mean $200,000 for this year; and $400,000 for 2010. He has been told this may discourage the business traveler. The family coming to our community will not be appalled by looking at their bill and seeing an additional 1% tax. Maybe we could look at doing this on a temporary basis, if that is legal. He also felt furloughs need to be discussed as that is more desirable than layoffs. He hoped that the labor in the City would recognize that they are better off working a day less a month and keeping their job rather than taking a hard line. Payroll is approximately $70,000 per day – if there is one furlough day per month, the savings would equate to $420,000 a year. With this type of deficit, we need to be considering all the options. Commissioner Franck advised he is willing to maybe take half of the $120,000 that Commissioner Scirocco’s budget owes the Accounts’ budget and use the difference to reduce the $3 million on the revenue side. He would use that before reserves. A SPAC tax is probably too late to do this year, but a $.50 per ticket tax or a percentage of the ticket sale would assist with the clean up DPW has to do after events at SPAC and public safety presence. Also, the waterfront property can either be sold or rented to get some form of revenue. The property is just sitting there. His department is small, only 10 employees. Page 2 of 4 2009 Budget Amendment Workshop 5/18/09 When he first came into office, the department budget was $1.7 million. He has gotten the budget down to $1.15 million over the past 3 – 4 years. He has one person retiring the end of June, so he will be taking that position out; there will be some savings there will pay and benefits. He stated he is not sure why they are waiting if they know they are going to cut certain things. If they can be given the basic idea of a minimum number, that will help. The problem is with the spending end. Whether we had a tax increase or not, this problem would still have presented itself because $2.5 million of the deficit is from the sales tax, which is $500,000 - $600,000 short, and from the VLT money. He doesn’t see sales tax increasing in the future. The County is down in sales tax more than the City. There are County services we could be using and we should look to the County to have them do them to get through this rough period of time. He will try to cut in his department and is willing to work with the other commissioners. The other problem we have is 2010 – it needs to be looked at almost immediately as there was a lot of one time money in 2009. Pushing the decisions out to July or August is too late as it gives everyone the time to spend down the lines or putting it other places. If we don’t do something major here, we will be looking minimally at a 17% tax increase. Every day that goes by is going to make it more difficult going into 2010. Mayor Johnson advised he failed to mention the cuts made in the recreation department; those cuts amount to another $30,000. Commissioner Ivins stated he only has 10 employees in his department; therefore most of his budget is salaries. Special Assessment Districts are offset by revenues; they just sit in his budget. The July 4th celebration is budget neutral and the cost for DPW to clean up is part of the grant money put in for that event. There aren’t a lot of supplies, mailings for tax bills. His department also provides all information technology (IT) equipment and support for everyone. He has been approached by some of his staff about furlough; they are interested and willing to cut back some of their time not to reduce the department by a person or two. He can probably find $30,000 - $50,000 without really crunching the numbers but will look to find more. He also advised the mortgage tax is up a little right now; it runs October through September. Paid parking has been brought up a number of times. He has a meeting with the Downtown Business Association on Wednesday to talk about that to get their reaction. Commissioner Scirocco stated he hasn’t heard a lot about the future of the City at the table. Paid parking is a revenue stream that could work for the City. Commissioner Ivins asked Deputy Commissioner Finneran if she wanted to ad anything for public safety. Deputy Commissioner Finneran advised that Commissioner Kim has sent an e-mail to his staff asking them to look at the budget and asked if there were any possible retirements. She asked for clarification of the MVP issue. Commissioner Ivins explained that the governor has passed on a surcharge to all the health insurance companies around the state. MVP was hit with a $35 million dollar surcharge which they plan to pass along to the subscribers retroactive to January 1, 2009. They want the January to June payment made by July 1st and take the rest month by month on a go forward basis. The other insurance companies plan to wrap it into next year’s rates. Mayor Johnson stated he discussed this with Commissioner Ivins the other night. He has question as to the legality of this and will be investigating if contractually they have any ground to do this. Commissioner Franck brought up the Lillian’s lot again – there was nothing legally that said how that money is to be used. This money is 25% of the shortfall. That number alone is close to a 5% increase. There is no taxing structure for 2009, so we have to use that money. The other communities that were eligible for VLT money did not put it in their budgets. Commissioner Ivins reminded everyone that even if they had left it all out, people were unwilling to make cuts back then; so they would have just taken more out of reserves. Page 3 of 4 2009 Budget Amendment Workshop 5/18/09 Commissioner Franck stated he disagreed with that; if they took it all out there would have been a moderate tax increase and the cuts they have to do now would have been done then. He believes we are in an emergency and the $750,000 needs to be used. This sale is not a tax. Commissioner Ivins stated he is concerned about one time money. Commissioner Franck stated then cuts should be $3 million. Commissioner Scirocco stated we are talking about developing that lot, there will be tax money and some give back from the $750,000 we are getting for the lot. Commissioner Ivins stated selling High Rock is going to do the same thing. Commissioner Franck stated the guidance has to be given within the next couple of days for each department to have a guideline to hit. Mayor Johnson reminded everyone that the Waterfront property was purchased with open space bond money. The only legal use of the proceeds for the sale of this property would be to pay down the debt. That will not solve nor can it be used to solve our deficit problem right now. Commissioner Franck stated he is looking at this from a long range plan going into 2010. As a council they should look at taking the money from the sale, paying off the bond and have that bond for other properties in the future. Also, there was a serious dip last July in our assessment figure. PUBLIC COMMENT PERIOD Al Colucci of 9 Lexington Road stated in the last 5 years, the occupancy rate has decreased for July and August. A lot of that is due to high prices at the hotels and the packages that are offered at hotels in Latham. He believes 50% of the initial cut is easy to do based upon dollars that have accumulated in certain departments that are questionable. Also, they can probably cut $1 million to $1.2 million in one department. Mr. Colucci further commented that he attends every budget meeting and reads all the blogs. There are 30,000 people in this City, why do people have to say things behind people’s back; come in to the meetings and voice opinions. Because no one is going to come forward, the Council is the one who will have to make the decisions on the cuts. There being no further business, Mayor Johnson adjourned the workshop at 7:55 p.m. Respectfully submitted, Lisa Ribis Approved: 6-2-09 Vote: 5 - 0 Page 4 of 4