Fulton lawmakers Tuesday approved a budget for 2011 that holds taxes and spending level, at the cost of 9 positions.
The $15.3 million budget spends $80,000 less than the 2010 budget, but takes in more than $150,000 less. That’s largely due to a $108,000 cut in state aid. Most of the gap will be filled by taking $50,000 from the city’s appropriated fund balance.
The budget will take in an extra $20,000 in tax revenues from the 2010 level, but because the assessed value of city properties went up by about one-half percentage point, the tax rate will actually fall about a tenth of a percent.
“The budget does not include a tax increase but it is not without pain and sacrifice,” said Mayor Ron Woodward in his budget address.
The city cut four full-time and two part-time positions earlier this month, a sudden and surprising reaction to a deteriorating end-of-year budget. The 2011 budget keeps those cuts, and adds savings from three positions left vacant during the year due to retirement.
The state aid cut hurt, but it’s not the only problem. The city, and every other municipal government and school district in the state, is having to cope with another sharp rise in the cost of employee pensions. The collapse of Wall Street destroyed investments, including the state’s investment of state worker pension contributions. Local governments make up the difference between the investments’ earnings and the amount of money needed to pay pensions. Within the last decade, local contributions were as low as zero. This year, the city will spend more than $1.2 million on retirement contributions. The city’s contribution to its police and fire retirements is up $65,000 this year, while contributions to the state retirement fund for other workers is down $15,000, largely due to the layoffs.
The $680,000 the city will spend in police and fire overtime in 2011 is also a problem area. Much of the overtime in the police department is actually paid for by grants that provide for targeted activities, such as quality of life patrols, aggressive driving enforcement and underage drinking stings. There are no such grants for the $330,000 in overtime in the fire department, some of which is due to the city’s contract with its firefighters union that mandates a minimum staffing level.
“We can not go on the way we’re going,” said Woodward, who noted that a Syracuse law firm, Bond, Schoeneck & King, has been hired to review city contracts as negotiations on new deals begin in 2011.
He said the city will also look at ways to generate small amounts of income, such as charging people or businesses when city workers clean up environmental spills on their property, or finding ways for renters to pay for services they receive.
“We just don’t have enough people sharing in the costs” of city operations, said former Alderman Robert Weston during the budget’s public hearing.
But Woodward said he did not want to raise water or sewer rates. He noted that the Birds-Eye food processing factory uses a large amount of city water and accounts for half of the city’s sewer use. Raising those fees could drive the company out of town, he said.
He warned that the city has lost its flexibility to respond to changes, adding, “there is a breaking point.”