Wednesday Jun 24 2009
City passes budget
By: Brandon Darnell, News Messenger Reporter
No layoffs planned, structural imbalance still a problem
The Lincoln City Council passed the city’s $75 million budget Tuesday night, which calls for no layoffs. “This budget is really just a starting point for this fiscal year,” said Steve Ambrose, director of administrative services for the city. “We are aware that the state is having problems with their budget. Their actions will affect our budget.” City Manager Jim Estep stressed that the budget is balanced, albeit with about $1.6 million in one-time funds - $1 million of which came from a property sale. “What we’re presenting to the council is the most responsible budget we can do,” Estep said. This year marked the first time the city has created its budget with a “zero-base”– meaning the budget was created from scratch, and nothing was done simply because it had been done in the past, according to Councilman Paul Joiner. Though the city has a balanced budget and no layoffs are planned at this point, there are pitfalls. “While we have produced a balanced budget technically, we do have a structural imbalance,” Estep said. In short, the city’s expenses outstretch its revenues. That’s a big enough problem on its own, but the state is threatening to take gas tax funds – which account for more than $600,000 of the 2009/2010 fiscal year budget passed Tuesday. In an effort to prevent that, the council passed a resolution to add Lincoln to almost 70 California cities that have already joined together to declare that taking of tax money illegal. “The state has found another way of avoiding the will of the people,” said Mayor Pro Tem Tom Cosgrove. “If it happens, we will not (have funding to) fix a road in the city of Lincoln for two years.” Even with the structural imbalance in the budget and the state’s possibly taking more money from the city, there are more potential problems. According to Estep, not included in this year’s budget is the possibility for more large losses in property tax, sales tax and slacking returns on the city’s investments – the scenario that brought about the laying off of 31 city employees in February. “This should be viewed as a preliminary budget,” Estep said. “No one knows what’s going to happen in the next 12 months.” Along with the hits to the general fund, the development services fund is currently suffering – and is almost empty – since development in the city virtually ceased, according to Estep. “With all of this comes a drastic service reduction,” Estep said. Police and fire services are particularly hard-hit. Though no firefighters were laid off during February, two captains have since left the department, and their positions have not been filled. According to Fire Chief Dave Whitt, the fire department is working to find creative ways to keep three engines staffed most of the time – though at least one would only be staffed at the minimum level of two firefighters. “We have reduced services drastically,” said Mayor Spencer Short, adding that the fact Lincoln currently staffs only one traffic police officer is an example. Councilwoman Linda Stackpoole said there will be a “tremendous” level of service reduction, pointing out that the city had 270 employees in the 2007/2008 budget, and this year’s budget includes only 212. Stackpoole voted against the budget because of the city’s funding of nonprofit organizations, including the Lincoln Lighthouse family resource and counseling center, the Lincoln Area Chamber of Commerce and the Lincoln Volunteer Center. Stackpoole called the approximately $80,000 the city budgeted for nonprofit funding – along with related expenses including $1 per year rent on buildings – “not a wise use of funds.” Short was joined by Cosgrove, Joiner and Councilmen Kent Nakata in his opinion that the nonprofit organizations funded in the budget either promote Lincoln or relieve strain on other city organizations. Specifically, Short cited the Lighthouse’s helping reduce crime rates and Lincoln Arts’ hosting of Feats of Clay, which he called the city’s “signature event.” During the required public hearing, no member of the public spoke about the budget. Also on the agenda Tuesday night was the council’s acceptance of the Citizens’ Advisory Financial Task Force’s report – which Chairman Richard Pearl clarified was a collection of ideas and not recommendations as previously reported in the News Messenger. The council accepted the report with praise for the nine-member, all-volunteer task force. According to estimates by the task force, if all of its ideas were enacted, the city could see a combined savings and revenue increase in excess of $7 million per year. Included in those ideas were regionalization of the Lincoln Fire Department – essentially combining with other local agencies – increasing sales tax, instituting a business license tax and eliminating the solid waste department and hiring an independent contractor for the service. Michael Hart – representative for the Local 39 union – which represents about 100 city employees, including those in the solid waste department – said privatizing the solid waste department would be a mistake. None of the task force’s ideas are a part of the budget as passed Tuesday night, but the council will be holding a workshop with the task force as the city continues to look at its budget. “We’re going to be all over this budget all year long,” Estep said. Brandon Darnell can be reached by e-mail at firstname.lastname@example.org.