No cuts yet
I believe the council has been working its way through the different departments and seeing where they might cut. Obviously the police department has 51 employees and they are entirely funded from the general fund. There are a few employees that work at city hall and some of their work could be out sourced. I believe according to the minutes they are looking at RITA which is an outsourcing of the income tax collection. I don?’t think there is a whole lot to save there maybe $80,000. Many of the other functions that they are talking about will be difficult because of state statue and the City Charter.
The second area is debt restructuring. That also presents a problem. Most of the debt the city has is in general obligation bonds. Those bonds are set and I doubt the lender would be able to re-issue them. That area of the debt would be last resort. General Fund debt as of Jan 1, 2008 was listed at $11,862,415.37. The city plans to retire over $700K in principal and $520K in interest. Of the $11 Million only $1.4 Million is in bonds. The city has a $3.6 Million lease purchase on the police station. The city will have trouble re-financing any of this debt based on general revenues bonds because they are near the debt capacity based on the assessed value of the city real estate. What is also waiting in the wings is the $4.3 Million in debt to the TIF loans. These will come due starting in 2011 and later. Any solution here would also require voter approval with a real estate levy.
Let?’s be very clear here. I believe and this is my opinion and nothing said to me from any member of council that the best solution for the crisis is for the 2% income tax to be approved by the voters. I believe the council has cut what they can now and they are only making plans for when they know what will happen if the income tax issue fails.
If the council has to start cutting police services and city hall personnel then those cuts will have some very long term negative affects on our city. If the city were to not be able to address the issue it is facing and we defaulted then it would be decades before we were able to crawl out from under the burden.
I believe that they are hoping to be able to first give the voters a chance to approve higher revenues and deal with the cuts when that time comes or if the voters tell them to make the cuts. I agree with those that say the voters should at least be given a chance before these cuts are made.
I guess it really doesn?’t matter who is right about the fairness for this income tax increase. In the end the voters will make that decision. I only hope that the council can come together and get the issue on the ballot. I would have liked to have seen them start last year or the year before. It will be an up hill battle to fully inform the voters and to get an approval. The city has its back against the wall now because if this issue fails this year they must start the cuts next year.
By Ted Hackworth
