“This morning, you’ll have a little different budget than I’m used to presenting you,” City Manager Kenny Smith said.
He said that decreases in revenue and increases in expenses have led to a 5 percent deficit, a deficit that Smith said will require decisions on spending to be made at the commissioner level.
He then made a presentation on the proposed budget to the commissioners, beginning with a list of priorities the commissioners had set earlier. These priorities included online payments and services for city customers, revising the zoning ordinance, removing obstacles to new jobs and businesses in the city, more code enforcement on substandard housing, the yard waste reform plan, community safety, automatic meter reading and an additional tree crew.
Smith’s presentation was lengthy and covered many topics. Although there will be no salary increases and no increases in health or dental insurance premiums, retiree benefits are a major expense. The combination of Other Post Employment Benefits (OPEB) and retiree health insurance total $1,704,000. There were many other expenses too, ranging from vehicle purchases to building repairs - including a $275,000 new roof for the Griffin Police Department - to $83,000 for the online bill-paying system.
He went into more detail about the city’s decline in revenue - residential water use is down 18 percent, commercial use is down 11 percent and industrial use is down 16 percent. Sales to Coweta County are up 28 percent but that does not make up for the slack - overall water revenues are down 6 percent.
Director of Public Works Brant Keller said he is writing a letter to the state to try to have drought restrictions eased, which would increase city water sales from nine million gallons per day to 12 million gallons per day.
After Smith finished the presentation, the wrangling about how to tackle the deficit began.
“The bottom line is $4.7 million we’re short,” Vice Chairman Dick Morrow said.
Smith confirmed this figure and Morrow said that covering the deficit would require doubling city taxes.
Chief Frank Strickland of the Griffin Police Department said 22 employees had left before their OPEB could kick in and newer employees would have fewer benefits, so the liability might not be as large.
Mayor Doug Hollberg suggested employees could be bought out of the retirement plans in exchange for $100 per month - $1,200 per year - in additional salary. Commissioner Joanne Todd disagreed, saying that this would present long-term problems, but Morrow said that the city is short $4.7 million and the money has to come from somewhere. Todd said the matter ought to be studied more closely.
After a brief discussion about the additional tree crew, Todd made a new objection to the buyout, pointing out that employees could leave without reaching the required age to vest into the retirement plan and thus get additional money without intending to enter the plan.
Smith suggested looking at retirement benefits for city employees. He cited Spalding County, which does not provide insurance for retirees older than 65, who are taken care of by Medicare, as an example to follow.
Commissioner Bill Landrum concurred. He suggested raising the retirement age to 65 and not paying health insurance for retirees, since they would be taken care of by Medicare.
Morrow also suggested insurance for retirees’ dependents - there were cases of grandparents adopting grandchildren - be cut. He also wanted the retirement age for police officers and firefighters, which is lower than that of other employees due to the nature of the work, to be increased. He said people are healthier than in the days when that age was set and cited how Delta Air Lines had raised the mandatory retirement age for pilots. Morrow said that if police and firefighters could not retire early, it gave them an incentive to stay healthy.
Smith said that Hollberg’s buyout idea was good but it would be difficult to implement. Morrow said employees who had been there less than 10 years would take it, but employees with more than 10 years, who are already vested, would not.
Todd said that perhaps it would be a good idea to fund some projects and defer others until the economy improves. She cited the automatic meter readers as one thing that could wait.
Landrum said he does not think the economy will turn around until 2011 at least.
“You’re going to have to help us bite the bullet,” he said.
Todd asked how much businesses operating in the city made and suggested that they could be taxed based on their income rather than the current method of using the number of employees. Todd said residential services like yard waste have been analyzed to death but nobody has taken a look at businesses, which, she said, use more police and fire services.
Morrow objected strongly, saying that businesses pay higher utility rates. He said the utility bill at his Solomon Street office, which used to be a house, would be half as much if it was still zoned residential. He said businesses should not be targeted just because it would be popular with voters. Keller and Hollberg backed him but Todd said it would still be worth a look.
Commissioner Cynthia Reid Ward said it would be a good idea to make small cuts from many departments instead of large cuts from a few. Keller suggested it might be a good idea to close the city golf course, which costs $220,000 to operate. Morrow agreed with him but Todd objected, saying that citizens should get certain amenities for their property taxes since they pay for services like water and power. Morrow disagreed, saying that police and fire alone cost four times the amount brought in by property taxes, but Ward said that certain services must be funded.
“I wish we could keep everything but we have to be realistic,” she said.
Ward said it might be a good idea to raise taxes but Morrow said that a tax increase could kill businesses, which are already having enough trouble making ends meet, and cost jobs. He said that 15 percent of his properties are vacant, while Hollberg said the rental houses he owns have been raided by metal thieves. When Todd said that Hollberg had insurance, Hollberg said he has a $1,000 deductible and that too many claims would lead to his policy being canceled.
Morrow raised the possibility of cuts to police and fire, pointing out that 60 percent of the city’s budget is dedicated to public safety. Smith said that Griffin puts “considerably higher” amounts of money into public safety than other cities due to its low tax base, high crime rate and the many employee benefits.
Ultimately, Landrum said the staff should look at the budget and see what can be cut. He said it is unlikely the commissioners will reach an agreement.
The budget will be discussed further at the next Board of Commissioners morning workshop, which will be at 9 a.m. Tuesday.