The Legislative & Finance Committee (L&F) held its final budget hearing on Feb. 28th, in advance of the March 2nd Committee of the Whole (COW) meeting.
Councilman Leo Lombardo, a self-proclaimed fiscal conservative who is smart and also possesses a great deal of common sense, declared that it was a “pretty lean budget” and that there was “not much else you can honestly cut” from it.
As far as I was concerned, that was a top notch endorsement from the head of L&F.
The budget assumes that city salaries will be frozen in 2010—a concept that is disconcerting to many but is actually a much less drastic approach than that taken by other cities in the area. Pepper Pike, for example, is laying off workers, cutting remaining workers’ salaries by 10 % and also requiring those workers to take an additional 15 % pay cut through the use of mandatory, unpaid furlough days. The pay freeze is not a sure thing at this point; labor negotiations are continuing in the city.
Based on the no-raise assumption, the 2010 budget has a $150,000 surplus (projected revenue over projected spending). In a city the size of ours, that’s not much of a cushion. But as I’ve said before, at least it’s something.
Here are a few details from the L&F meeting:
- Lombardo and Councilwoman Cathy Murphy showed that you can’t get much by them. They both noticed that Finance Director Tony Ianiro had shortchanged the city’s permanent improvement fund by $ 50,000.
- L&F made clear that putting money in the budget and spending it are two different things. Murphy repeatedly talked about waiting to see how much revenue the city actually takes in before “pulling the trigger” on some spending.
- $ 50,000 was included in the permanent improvement budget for dealing with the old church building. That topic is up for discussion again at this week’s COW meeting.
- The L&F members (Lombardo, Murphy and Councilwoman Lisa Stickan) did what they could to help out the Parks & Recreation Commission (P&R) with regard to their deficit-spending budget (the second in two years). L&F suggested that $ 26,000 that P&R has decided it wants to spend on 2 “Funbrella” pool shades ( $ 11,000) and for either a tennis court shade area or baseball fencing ($ 15,000) could be taken from the park improvement fund rather than from P&R’s operating fund. That reduced P&R’s projected deficit spending from over $ 46,000 to $20,338. Of course, that also significantly reduces the amount of money left in the park improvement fund, and P&R's emergency reserve fund will also continue to shrink.
More Details About the Bond for Constructing the City’s New Swimming Pool
When he met with L&F earlier in the week, Recreation Director Dave Ianiro indicated that P&R wants council to rescind the ordinance that requires P&R to contribute $ 50,000 a year to reduce the bond debt that the city took on in 1997 for constructing the new pool and pool house.
That subject was a topic for discussion at the Feb. 28th L&F meeting. Here are some additional facts about that bond and the pool construction:
- Council placed an issue on the ballot in the mid 1990’s asking voters to approve spending money to replace the city’s swimming pool. The voters said no---twice.
- The 1997 Council (Mayor Scott Coleman and Councilman Ed Hargate were members), came up with a plan to bypass the voters and to get the pool constructed anyway. Council planned to obtain bonds to pay for a number of city projects. It agreed to include constructing a new pool and pool house as a bond-funded project in exchange for P&R’s agreement to use $ 50,000 from its budget (P&R gets 1 mil of property taxes each year for its exclusive use) to help pay down the bond debt.
- Council passed an ordinance in 1998 memorializing that agreement. It requires P&R to pay $ 50,000 a year for 18 years. P&R has six payments left under the ordinance.
- A 27 year bond was used to get money to pay for the pool construction. P&R's payment obligation ends after 18 years. At that time, P&R will have paid $ 900,000 of the original $ 3,140,000 bond debt (not including interest).
- When asked whether P&R would end up paying the full cost of the new pool and pool house, Mayor Coleman answered with an emphatic “No.” The arrangement always anticipated that taxpayers would pay for part of the construction cost--even though they had voted the pool construction issue down.
- If council rescinds the pool funding ordinance (it has yet to discuss the issue), taxpayers would end up picking up the tab for the last $ 300,000 that P&R owes to the city and P&R would end up with a $ 300,000 windfall.
Having chartered a course to achieve that goal without voter approval, however, it is very troubling that P&R now wants to reneg on its part of the bargain--especially when its reason for doing so is so that it can continue on a path of oblivious, unbridled spending.
We are in a severe economic recession. The city is projected to experience a significant decrease in revenue this year. City workers are being asked to accept pay freezes. Yet P&R, not content with its $ 630,000 in revenue, is actively angling to get even more money to spend--at taxpayer expense.
I guess that shouldn't be a surprise. As Dave Ianiro indicated at the last L&F meeting (and as P&R's 2010 deficit-spending budget makes clear), P&R has no intention of changing what it's been doing. Its big problem--as P&R sees it--is that its revenue isn't keeping up with its spending. It thinks it can fix that problem, at least in the short term, by having council rescind the pool bond ordinance.
P&R has shown that it doesn't really care about finances--its own, the city's or taxpayers'. But they are not entirely to blame. Mayor Coleman keeps reappointing the same individuals to P&R---giving his unbridled support and stamp of approval to their free-spending ways.
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