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HomeMy WebLinkAboutMN-CC-1989-10-18IN�<I 1 COMMON COUNCIL PROCEEDINGS CITY OF ITHACA, NEW YORK Special Meeting 8:00 A.M. October 18, 1989 PRESENT: Mayor Gutenberger Alderpersons (8) - Booth, Hoffman, Johnson, Killeen, Nichols, Lytel, Peterson, Schlather ABSENT: AlderpersQn Romanowski (excused) Alderperson Cummings (excused) OTHERS PRESENT: City Clerk - Paolangeli City Controller - Cafferillo City Engineer - Gray Cai Deputy City Controller - Thayer Acting Superintendent of Public Works - Fabbroni .t.4 Board of Public Works Commissioner - Reeves Youth Bureau Director - Cohen Fire Chief - Olmstead Building Commissioner - Datz PLEDGE OF ALLEGIANCE: Mayor Gutenberger led all present in the Pledge of Allegiance to the American flag. MAYOR'S BUDGET MESSAGE: Mayor Gutenberger expressed his gratitude to Dominick Cafferillo, Steven Thayer and Barbara Ruane of the City Controller's Office for all the many hours of work they put in on the budget. Mayor Gutenberger presented two documents to Council - the 1990 Mayor's Budget and his Budget Message. Mayor Gutenberger made the following comments to Council regarding the budget and the process that was used: "The department requests which were submitted to the finance department and me,had every one of the requests been granted, would have required approximately a 58% tax increase. I wish to point out that the budgets submitted by the departments were not frivolous. They were well put together, well thought out, and represented each department's view of what they felt they needed to provide a high level of service to the entire community. In almost every case these budgets were reviewed by the lay boards that work with the various departments so they had some citizen review as far as the lay board members. However, with a 58% tax increase to start with, obviously we had a lot of work to do. You have heard me and others say in the last few years that tough days were coming -- well, the tough days are here. If you thought the last few years were tough, as they say - "you ain't seen nothing yet!" In the previous years we have done everything possible to increase revenues, to try to find other sources and new sources of revenues. We just do not have that luxury this year. So, with the wide gap between the budget and the departmental requests and the communities ability to pay, we have reversed the process this year. In the past we have taken the department head requests, gone through and cut out items, whittled down where we thought we could, put it back together and in most cases we would not be too far apart. We would then have to go back through, go back into the budgets and take out a little more once we knew what we were looking for. 190 2 We started out with roughly a $3.7 million difference between the requests and last year's budget. Thus, we just had to do something different. What we did this year is to set aside departmental requests and went first to the revenues and took all of the revenues and stretched them to the limit. After doing that and then applying the ultimate that we could determine in revenues to the budget requests, it still would have required a 44% tax increase - this is after increasing revenues. Obviously, that was not coming anywhere near close to closing the gap. So I made a decision and asked Mr. Cafferillo to re -do the budget requests with certain guidelines. And let me say, that by the time we got done with even those 44% tax increases, we were still looking for about $2.2 million to close the gap. To put that in perspective, to raise taxes 1% only generates about $69,000.00. So you can quickly estimate how many $69,000.00 it takes to come up to even the $2.2 million. Each 1% raises very, very little additional revenue when you are looking at this magnitude of difference. So to see where we really were, I gave instructions to delete all new position requests in all departments and to apply to the 1989 budget the increase in salaries for all existing staff that is already set by contract. As you know there are still a couple of bargaining units that are in negotiations right now. Let me warn you that if we were below on our estimates of contract negotiations for those that are not settled, that is going to make this picture even worse. We then applied the known expenditures that we have no control over, things for which we are already obligated. In addition we held the line on all other expenses other than salary-, basically the 200 and 400 lines, the equipment lines and contractual services lines. We put into the 1990 budget the same dollar amounts that existed in 1989. Knowing that we still weren't going to be close, we eliminated all new capital projects. In doing that - deleting all new positions, putting in known salary increases, and putting in what we know we have to spend and no additional monies for the 200 and 400 series and no new capital projects,'�we came out with roughly $207,000.00 that was available to spend above 1989. So that $2.2 million figure that we were trying -to whittle down left us with $207,000.00. Obviously not very much money. What we did then is to not go through the usual, knock off a lawn mower here, take out a paver or a garbage packer or those things. There was so little money left for all the departments, that we spread that $207,000.00 back through all the departments. We did that basically on the break down of expenditures by departments as they existed in 1989 and to let the individual departments then prioritize how they want to spend their share of the $207,000.00. Doing all the things I've just listed still requires a 5.3% tax increase. To reiterate, no new positions are recommended, no monies for capital projects, holding the line, basically, on all expenditures still requires a 5.3% tax increase. What is going to happen? Obviously, a lot of discussions, a lot of decisions have to be made. We will be sending back all the budgets to the Department Heads showing what their total dollar amounts would be under this scenario and asking the Department Heads then to re- prioritize their requests, to stay within the amounts allocated to them. It is going to be tough - it is going to be hard. If a particular department feels that they cannot live within that dollar amount after they have reprioritized, obviously they will have to come to B &A and Common Council to plead their case of why they should get more than the dollar amount shown on the sheets. If those arguments are successful then obviously Council has two choices. They can take that increased amount and subtract it from some other department or obviously raise taxes even more than the 5.3% or in this next month and a half, which is not much time, try to identify even 19 fail 3 additional revenues than we have been able to identify. There are a lot of tough policy decisions that have to be made in this next month and a half. If the priorities, as far as spending, stay the same as they have historically, (there is a pie chart on the first page of the budget message which shows percentages by departments that were spent in 1989), and if you went back over the years, you probably would not find a great fluctuation in that, maybe a percent or two here or there. For every dollar amount over and above what you would want to spend in a particular department, you are going to have to take that corresponding amount away from some other department or find new revenues or increase taxes even more. I guess the thing to re- emphasize again is the fact that there are no monies in this budget for new capital projects and there are things that we should be doing. There are things I know that the various departments want to do and feel very strongly about. There are projects that individual Council members feel very strongly about that should be done. The money is not in this budget for any of those items." .a Discussion followed on the floor. Alderperson Booth asked about tax increases for the last few years. Mayor Gutenberger stated that since he has been in office, tax increases have averaged between 5 -7 %. Alderperson Booth asked the Mayor to list any major new items that the Council ought to be looking for. He said that he knows the sludge and garbage is certainly a significant increase. Mayor Gutenberger stated that garbage, sludge, and increases in insurance is all significant. He stated that what you really have to keep in perspective is to go back to the example that he used of a 1% tax increase only generating $69,000.00. We know we have lost federal revenue sharing, and the State revenue sharing has been staying constant, and has not gone up at all in 4 - 6 years. Then we add into that, what we do with our own salary increases. Roughly 67 - 68% of our total budgets are in people, salaries and benefits. 5 to 6 to 6 -1/2% negotiated settlements on salaries on top of the gap of level revenues are things that we have no control over. Mayor Gutenberger stated there is some good news in all of this, otherwise we would even be in worse shape. The State of New York, has informed us that because of new procedures, our cost for retirement is less in 1990 than what it has been in the past - quite a considerable chunk. Had that even stayed the same, we would be in much worse shape than we are now. So there has been a reduction in one of our major expenses, but even with that reduction you see bad news like this. Alderperson Nichols stated that he wanted to make it clear that what the Council is talking about here does not include the water and sewer fund. The cost of the sludge disposal will be coming out of that fund. Mayor Gutenberger agreed with Alderperson Nichols and stated that other than sludge, the other landfill costs are in the operating budget. City Controller Cafferillo, for clarification, stated that in regard to the retirement issue, what the State did was to take two years of the retirement that the City would normally owe (there is a 21 month back -log) and they financed that over 17 years so the City is paying a 1/17 payment annually to wipe out those back years, plus paying the current liability so they did 1192 1. 4 not really lower the costs, they just borrowed a portion of the costs and stretched it out. That did have an effect of about $220,000 in our operating budget. City Controller Cafferillo answered questions regarding the City's debt service. Alderperson Schlather stated, for clarification, that this budget that is being presented includes all of the fire positions that the Council added this past year, but does not include a single new fire position for 1990. He said that if we wish to implement the schedule of 5 or 6 fire fighters in 1990, that is all new money. Mayor Gutenberger said that is correct. The same holds true for every department. After further discussion Alderperson Schlather put forth the following resolution. Resolution By Alderperson Schlather: Seconded by Alderperson Killeen RESOLVED, That the Mayor's budget for 1990, as presented and received by this Common Council, be referred to the Budget and Administration Committee for review, which committee shall sit as a Committee of the Whole Common Council. Carried Unanimously Alderperson Booth asked if there is any way to briefly summarize what each City Department has asked for. Alderperson Schlather responded that as you do the budget reviews there will be detailed sheets from each department. Adjournment On a motion the meeting adjourned at 8:45 a.m. allista F. Paolange i City Clerk John C. Gu enberger /Mayor J IN�<I 1 COMMON COUNCIL PROCEEDINGS CITY OF ITHACA, NEW YORK Special Meeting 8:00 A.M. October 18, 1989 PRESENT: Mayor Gutenberger Alderpersons (8) - Booth, Hoffman, Johnson, Killeen, Nichols, Lytel, Peterson, Schlather ABSENT: AlderpersQn Romanowski (excused) Alderperson Cummings (excused) OTHERS PRESENT: City Clerk - Paolangeli City Controller - Cafferillo City Engineer - Gray Cai Deputy City Controller - Thayer Acting Superintendent of Public Works - Fabbroni .t.4 Board of Public Works Commissioner - Reeves Youth Bureau Director - Cohen Fire Chief - Olmstead Building Commissioner - Datz PLEDGE OF ALLEGIANCE: Mayor Gutenberger led all present in the Pledge of Allegiance to the American flag. MAYOR'S BUDGET MESSAGE: Mayor Gutenberger expressed his gratitude to Dominick Cafferillo, Steven Thayer and Barbara Ruane of the City Controller's Office for all the many hours of work they put in on the budget. Mayor Gutenberger presented two documents to Council - the 1990 Mayor's Budget and his Budget Message. Mayor Gutenberger made the following comments to Council regarding the budget and the process that was used: "The department requests which were submitted to the finance department and me,had every one of the requests been granted, would have required approximately a 58% tax increase. I wish to point out that the budgets submitted by the departments were not frivolous. They were well put together, well thought out, and represented each department's view of what they felt they needed to provide a high level of service to the entire community. In almost every case these budgets were reviewed by the lay boards that work with the various departments so they had some citizen review as far as the lay board members. However, with a 58% tax increase to start with, obviously we had a lot of work to do. You have heard me and others say in the last few years that tough days were coming -- well, the tough days are here. If you thought the last few years were tough, as they say - "you ain't seen nothing yet!" In the previous years we have done everything possible to increase revenues, to try to find other sources and new sources of revenues. We just do not have that luxury this year. So, with the wide gap between the budget and the departmental requests and the communities ability to pay, we have reversed the process this year. In the past we have taken the department head requests, gone through and cut out items, whittled down where we thought we could, put it back together and in most cases we would not be too far apart. We would then have to go back through, go back into the budgets and take out a little more once we knew what we were looking for. 190 2 We started out with roughly a $3.7 million difference between the requests and last year's budget. Thus, we just had to do something different. What we did this year is to set aside departmental requests and went first to the revenues and took all of the revenues and stretched them to the limit. After doing that and then applying the ultimate that we could determine in revenues to the budget requests, it still would have required a 44% tax increase - this is after increasing revenues. Obviously, that was not coming anywhere near close to closing the gap. So I made a decision and asked Mr. Cafferillo to re -do the budget requests with certain guidelines. And let me say, that by the time we got done with even those 44% tax increases, we were still looking for about $2.2 million to close the gap. To put that in perspective, to raise taxes 1% only generates about $69,000.00. So you can quickly estimate how many $69,000.00 it takes to come up to even the $2.2 million. Each 1% raises very, very little additional revenue when you are looking at this magnitude of difference. So to see where we really were, I gave instructions to delete all new position requests in all departments and to apply to the 1989 budget the increase in salaries for all existing staff that is already set by contract. As you know there are still a couple of bargaining units that are in negotiations right now. Let me warn you that if we were below on our estimates of contract negotiations for those that are not settled, that is going to make this picture even worse. We then applied the known expenditures that we have no control over, things for which we are already obligated. In addition we held the line on all other expenses other than salary-, basically the 200 and 400 lines, the equipment lines and contractual services lines. We put into the 1990 budget the same dollar amounts that existed in 1989. Knowing that we still weren't going to be close, we eliminated all new capital projects. In doing that - deleting all new positions, putting in known salary increases, and putting in what we know we have to spend and no additional monies for the 200 and 400 series and no new capital projects,'�we came out with roughly $207,000.00 that was available to spend above 1989. So that $2.2 million figure that we were trying -to whittle down left us with $207,000.00. Obviously not very much money. What we did then is to not go through the usual, knock off a lawn mower here, take out a paver or a garbage packer or those things. There was so little money left for all the departments, that we spread that $207,000.00 back through all the departments. We did that basically on the break down of expenditures by departments as they existed in 1989 and to let the individual departments then prioritize how they want to spend their share of the $207,000.00. Doing all the things I've just listed still requires a 5.3% tax increase. To reiterate, no new positions are recommended, no monies for capital projects, holding the line, basically, on all expenditures still requires a 5.3% tax increase. What is going to happen? Obviously, a lot of discussions, a lot of decisions have to be made. We will be sending back all the budgets to the Department Heads showing what their total dollar amounts would be under this scenario and asking the Department Heads then to re- prioritize their requests, to stay within the amounts allocated to them. It is going to be tough - it is going to be hard. If a particular department feels that they cannot live within that dollar amount after they have reprioritized, obviously they will have to come to B &A and Common Council to plead their case of why they should get more than the dollar amount shown on the sheets. If those arguments are successful then obviously Council has two choices. They can take that increased amount and subtract it from some other department or obviously raise taxes even more than the 5.3% or in this next month and a half, which is not much time, try to identify even 19 fail 3 additional revenues than we have been able to identify. There are a lot of tough policy decisions that have to be made in this next month and a half. If the priorities, as far as spending, stay the same as they have historically, (there is a pie chart on the first page of the budget message which shows percentages by departments that were spent in 1989), and if you went back over the years, you probably would not find a great fluctuation in that, maybe a percent or two here or there. For every dollar amount over and above what you would want to spend in a particular department, you are going to have to take that corresponding amount away from some other department or find new revenues or increase taxes even more. I guess the thing to re- emphasize again is the fact that there are no monies in this budget for new capital projects and there are things that we should be doing. There are things I know that the various departments want to do and feel very strongly about. There are projects that individual Council members feel very strongly about that should be done. The money is not in this budget for any of those items." .a Discussion followed on the floor. Alderperson Booth asked about tax increases for the last few years. Mayor Gutenberger stated that since he has been in office, tax increases have averaged between 5 -7 %. Alderperson Booth asked the Mayor to list any major new items that the Council ought to be looking for. He said that he knows the sludge and garbage is certainly a significant increase. Mayor Gutenberger stated that garbage, sludge, and increases in insurance is all significant. He stated that what you really have to keep in perspective is to go back to the example that he used of a 1% tax increase only generating $69,000.00. We know we have lost federal revenue sharing, and the State revenue sharing has been staying constant, and has not gone up at all in 4 - 6 years. Then we add into that, what we do with our own salary increases. Roughly 67 - 68% of our total budgets are in people, salaries and benefits. 5 to 6 to 6 -1/2% negotiated settlements on salaries on top of the gap of level revenues are things that we have no control over. Mayor Gutenberger stated there is some good news in all of this, otherwise we would even be in worse shape. The State of New York, has informed us that because of new procedures, our cost for retirement is less in 1990 than what it has been in the past - quite a considerable chunk. Had that even stayed the same, we would be in much worse shape than we are now. So there has been a reduction in one of our major expenses, but even with that reduction you see bad news like this. Alderperson Nichols stated that he wanted to make it clear that what the Council is talking about here does not include the water and sewer fund. The cost of the sludge disposal will be coming out of that fund. Mayor Gutenberger agreed with Alderperson Nichols and stated that other than sludge, the other landfill costs are in the operating budget. City Controller Cafferillo, for clarification, stated that in regard to the retirement issue, what the State did was to take two years of the retirement that the City would normally owe (there is a 21 month back -log) and they financed that over 17 years so the City is paying a 1/17 payment annually to wipe out those back years, plus paying the current liability so they did 1192 1. 4 not really lower the costs, they just borrowed a portion of the costs and stretched it out. That did have an effect of about $220,000 in our operating budget. City Controller Cafferillo answered questions regarding the City's debt service. Alderperson Schlather stated, for clarification, that this budget that is being presented includes all of the fire positions that the Council added this past year, but does not include a single new fire position for 1990. He said that if we wish to implement the schedule of 5 or 6 fire fighters in 1990, that is all new money. Mayor Gutenberger said that is correct. The same holds true for every department. After further discussion Alderperson Schlather put forth the following resolution. Resolution By Alderperson Schlather: Seconded by Alderperson Killeen RESOLVED, That the Mayor's budget for 1990, as presented and received by this Common Council, be referred to the Budget and Administration Committee for review, which committee shall sit as a Committee of the Whole Common Council. Carried Unanimously Alderperson Booth asked if there is any way to briefly summarize what each City Department has asked for. Alderperson Schlather responded that as you do the budget reviews there will be detailed sheets from each department. Adjournment On a motion the meeting adjourned at 8:45 a.m. allista F. Paolange i City Clerk John C. Gu enberger /Mayor J