City budget cut by $376K, tax incease by half
A preliminary budget approved by the Batavia City Council cuts $376,000 in spending from a previous draft, allowing the proposed property-tax increase to be cut in half.
Instead of anticipating a 3-percent tax increase, city property owners can expect an increase of just under 1.5 percent if the budget gets final approval following a Feb. 8 public hearing.
A good portion of the cut in expenses comes from a $150,000 reduction in the contingency fund. That fund might be needed if the city's unions win its any arbitration cases.
"As I mentioned, it's (cutting the contingency fund) a moderate risk," City Manager Jason Molino said following the meeting. "There's the potential there that there could be retroactive awards that could exceed that, and the city's fund balance position isn't where it should be now, though we're building it. It could be very difficult. One thing that has to be understood is that wages and benefits aren't what they used to be -- all work forces and city employees and unions have to understand that, and this is really their opportunity to recognize that and react to that. The community doesn't have the ability fund these things and in the future we're not going to be able to, and that's just something we're all going to have to react to."
In 2009, the city was forced to pay out $235,000 to the Police Benevolent Association after the union won its arbitration against the city. The city and PBA have yet to resolve all contract issues and the city will be three years behind in potential police raises in March. Two additional union contracts for city workers expire at the end of March.
Both Molino and Council President Marianne Clattenburg agree that some large settlement is likely.
"Something the unions are going to need to realize is that the city does not have the ability to provide that level of benefits," Molino said.
Cutting the property-tax rate increase in half reduces revenue by only $84,000. The additional expense cuts in the budget come from an anticipated $322,000 drop in sales tax revenue.
The spending plan now stands at $5,441,630.
The revised budget also cuts $105,000 from equipment reserve funds for police, fire, public works and facilities.
"They (the Council) did not feel they could support anything more than what was adopted," Clattenburg said. "We're just going to have to continue to live within our means."