Janesville's financial belt gets tighter
This year, nothing is.
The city council is facing an estimated $1.8-million deficit in 2010, and that's after $1.2 million is taken from cash reserves to help offset the shortfall.
The shortfall number is based on a zero percent levy increase. A 3 percent levy increase would yield an additional $725,000 in property taxes, bringing the gap to about $1.1 million.
The council met Tuesday at a retreat and got a first look at a budget.
On the revenue side, the city expects to lose money from commercial and residential building activities, interest on investments and state shared revenues.
The city has union contracts that include 3 percent raises through 2010. Non-union staff received 3 percent this year. On top of that, they also typically receive merit pay increases ranging from 3 to 5 percent, depending on length of employment and pay. After 10 years, the formula changes and the employee could lose pay if he or she does not receive a merit pay increase.
City Manager Eric Levitt suggested ways to manage the budget.
"I want to know whether or not (a strategy is) off the table," Levitt said to the council. "I think we're going to have some hard decisions … to look at, and I want to start on the right foot and know what the expectation is."
Strategies and options on the table include:
-- Balancing the budget without using the cash reserve.
-- Levy increases ranging from 0 percent to 3 percent.
-- Increasing users fees.
-- Reducing services.
-- Layoffs, furloughs, salary and hiring freezes, early retirement incentives and eliminating merit pay. Personnel and benefits represent about 78 percent of the general fund.
-- Cutting back on capital projects.
Council members have been concerned about continuing to use the cash reserve to balance the budget. About $6 million remains.
Councilman Bill Truman said he doesn't want to lay off staff. But he said he would not rule out furloughs and eliminating merit pay.
The council could look at raising fees and cutting services, such as increasing landfill fees for outside contractors and picking up garbage every other week.
"I think this year we're going to look at everything on the table," he said.
Councilman Russ Steeber called layoffs "the last resort."
But Frank Perrotto said "everything and more" should be on the table.
Tom McDonald agreed. He asked whether the city could reopen union contracts but was told both sides must agree to that.
Steeber recalled that last year he was adamant against cutting police and fire budgets, and he said he still believes that.
But, "There's certainly other areas we really never dig into. I hate to go to parks and recreation, but I got to. Look at the funding we throw to adult sports. We subsidize a lot of the softball leagues (and the) different league activities that take place in our parks. I have to say, is that one of those things that are really a necessity? Do we increase our fees and still provide it rather than, say, cutting a firefighter or a police officer?"
Councilman George Brunner said the council should have the goal of a zero percent increase in the levy.
"We're in tough times," he said.
State employees are going without increases and are being furloughed, he said.
"I don't want to look like we're in the panic mode, but I think we really need to be in the sharper-pencil mode," Brunner said.
Steeber said it would be a mistake to keep the levy increase at zero percent because the city could never fill the resulting shortfall.
"We are all going to have some pain here," he said. "If you can do this without a tax increase, it would probably be one of the most creative things I've ever seen anyone do."
McDonald was adamantly against continuing to dip into the fund balance.
"I'd rather have taxes go up a little bit and not have us dipping into the reserves year after year," he said.
He said it's easy for the council to talk about increasing fees. But it just rescinded a bus fare increase and last year opted against increasing swimming admission.
"When we say, 'Everything's on the table, we have to stick with it," he said.