WARREN - City Council is reviewing the city's 2014 budget in hopes of passing it before the end of the year. City Auditor Dave Griffing said projected revenues are down slightly next year.
Council's finance Chairman Alford Novak, D-2nd Ward, said Tuesday's finance committee meeting will primarily focus on the 2014 budget. But he does not expect the budget package to pass during Wednesday night's regular council meeting.
"We want council members to have time to digest the budget and express their concerns," Novak said. "There likely will be a special call meeting later this month to pass the budget."
Wednesday's meeting was supposed to be the last scheduled meeting of 2013 because council voted to eliminate the regular meeting that fell on Dec. 25, Christmas Day.
The city's general fund budget this year ended at $29.3 million. Next year, the city's general fund is projected to be $26.5 million.
"Revenues are expected to be less next year due to several factors," Griffing said.
"Local government funds that were $1 million this year are projected to be $785,000 in 2014,'' Griffing said. ''Inheritance taxes were eliminated last year, so we will see a decline from $1.4 million this year to an estimated $100,000 in 2014, and income taxes have been pretty stagnant. Those things, along with other factors, have caused us to believe revenues will be lower."
The city received an unexpected infusion of money in inheritance taxes this year.
"Although inheritance taxes ended on Dec. 31, 2012, there were some things that already were flowing through the system," he said. "Our share of one person's estate was more than $800,000."
While the budget council is expected to vote on shows police wages in 2013 being $3.6 million, it is recommending that police wages be about $2.6 million in 2014.
Griffing says they are shorting both the police and fire department budgets slightly more than $350,0000 each for budgeting purposes. Because city expect to return most of the money to the departments after the beginning of the year, its budget is expecting to be closer to $3 million.
Wages in the department is expected to see some reductions due to retirements
"We have two officers that are going to go," Griffing said. "Joseph O'Grady is expected to retire in January and Terrance Eddington is expected to retire in February."
Griffing said several others have indicated they may be retiring, but he has not receive any official letters informing him of their intentions.
Those officers with more than 30 years experience likely would be replaced by officers paid at entry-level wages, he said.
Griffing expects the amount the police will be spending in overtime next year be less than the $243,020 that has been spent so far this year. Chief Eric Merkel requested about $150,000 in overtime for 2014.
The department spent $164,658 in overtime in 2012. Overtime hours in the police department were about $125,700 in each of the previous two years.
Mayor Doug Franklin said the significant increase in overtime hours this year was due to mandatory training that officers were required to have under the city's agreement with the Department of Justice, callouts due to several homicides that occurred earlier this year and the city doubled-up officers in patrol vehicles for a period of time.
Councilman Eddie Colbert, D-7th Ward, on Friday said he has questions on how the revenues from the golf course and Gibson building will be incorporated into the city's budget.
He questions whether the city intends to increase the staffs of some departments, such as police and operations, as well as what the city plans to do with the Staffing for Adequate Fire and Emergency Response grant firefighters.
Colbert said he also wants to know how the losses of income taxes from workers that worked for RG Steel and the GE plant, now closed, will affect the city's budget
Both Councilman John Brown, D-3rd Ward, and Councilwoman Helen Rucker, D-at Large, called the 2014 budget a living document that will be adjusted throughout the year.
Brown says he has full confidence in the work that Deputy Auditor Nancy Ruggieri put in preparing the budget document.
Rucker does not not expect to have a problem passing the 2014 budget.
"It is something that we can adjust as we go through the year," Rucker said. "I'm most concerned with the SAFER grant firefighters."
Fourteen firefighters were hired with the grant that was awarded the city in 2010. Franklin emphasized that while the city does not plan to add any employees in 2014, it is looking at ways to keep the firefighters paid for by the SAFER grant after it ends in May.
"However, right now, we do not have the funding to keep them," he said.
The bonds that were approved for sale by the council earlier this year do not appear in the budget being voted on because they have not been sold, he said.
"Moody's gave us an A1 bond rating, so we were able to finish our planning area official statement to send out to buyers," Griffing said. "We are anticipating next week to officially doing the sale."
The city is selling $8.6 million in bond sales that will be used to pay off various debts in the police and fire pension funds, to do street and road improvements, upgrade city-owned buildings and complete the purchase of the Gibson building.
"None of that will be done this year," he said. "While the money from the bond sales are expected to be obtain this year, it will be appropriated into 2014's budget."
Packard Music Hall earned about $234,000 in 2013 through its rent and concession sales. Its expenses, as of the end of November, was $501,000. The city has provided the music hall about $250,000.
"The $250,000 is the average the city has provided the music hall every year," Griffing said. "It has been higher some years and lower in other years."
Franklin does not expect the city to receive any money from the golf course in 2014. The new managers are being given time to build up the business.
"There will be no cash layout from the city," Franklin said. "They will be picking up the tax burden and doing all the maintenance."
The city is still doing contract negotiations with all but one of its unions. The police department's communications workers approved a new contract. New contracts with the city's other unions have not been achieved.
"We are trying to find new revenue sources through economic development," Franklin said. "We are keeping a sharp eye on our expenses and doing what we can to reduce costs."
The passage of several of the bonds will help to cut some of the city costs by upgrading some city-owned buildings, which will decrease maintenance costs and make them more energy efficient.
"The purchase of the Gibson building will bring us revenue through rental fees," he said. "It will provide us with a positive cash flow."