In approaching the city’s budget, I have two responsibilities that I bring to the table. The first is ensuring the fiscal sustainability and health of our city government. Services need to be efficient but funded and our long-term fiscal health is vital. Second is the impact of our budget on taxpayers. Particularly in this economy, any additional impacts need to be minimized as much as possible.
Our operating budget contains a few new items this year. Among them are five new police officers, pension fund monies, and retiree health care monies.
Note: The Police Chief came to our meeting last night and presented some information. I am hoping to have that information soon and will post some of it on here. Also, it turns out that staff was suggesting no increase was an alternative but was not in fact saying they did not feel it was needed. Regarding the police officers, I am not prepared to support any additional police officers. I am supporting in our budget the increase from 2 part-time to 2 full-time dispatchers. However, I have not seen the justification for the particular 5 proposed police officer positions. I understand that city council showed interest in increasing its police in response to crime in neighborhoods and it would have been very difficult for me to oppose one additional officer focused on community policing and working with neighborhoods to start and enhance neighborhood watch programs. However, the current proposal does not correlate to the need that was presented to council and there has not been any evidence presented to council yet that the proposed officers are a need that is currently lacking. I have the utmost respect for Newark’s police officers and this is not a reflection on the police department. Furthermore, with city staff no longer recommending this increase, I am confident that our Police Department will be able to continue to function successfully at its current personnel levels.
That being said, even with a decrease in crime, I am not satisfied with the current levels of crime and safety in Newark. During our comprehensive planning discussions we outlined that council will need to host workshops on issues such as affordable housing. I believe we also need to host a workshop or series of workshops on crime and safety. It is important that our community address this issue proactively and come up with a long-term plan to implement intentionally to make sure we address this issue.
The pension fund and retiree health care fund are underfunded contractual agreements. To that end they do need to be funded. I do not believe we should postpone this and make it worse or put forward a band-aid solution. The city will need to address its fiscal health as a long-term project and putting monies towards our pension and retiree health care funds is not going to work to put our cash reserves where they should be. Ignoring these contractual obligations would be a bad beginning to restoring our city’s fiscal health.
Finally, I believe the city is woefully behind the curve when it comes to recycling. I do believe we need to commit the funds to proceed this year with both curbside recycling and the Main Street recycling program. The operating expenses associated with the Main Street recycling program is $15,000/year, which at 0.05% of our 2009 budget expenditures I believe is affordable.
I would like to profusely thank Finance Director Dennis McFarland for all the work he has put into this budget and our vetting of it. We received a memo with potential revenue enhancements and cost reductions, some of which I felt were appropriate and some of which I felt we should not utilize.
In terms of providing ongoing monies towards the pension fund and retiree health care, I looked at the revenue enhancements and cost reductions and came up with a proposal that involves some additional user fees, some cost savings, and in terms of new taxes a 1 cent property tax increase and a 0.8% electric utility margin increase. If taxes were to be raised above this, I think it would be inappropriate in this economy and funds would need to be provided for low-income residents. I will explain my proposal more in-depth but first want to comment on a few other relevant items.
• Newark code allows the Finance Director to exhibit discretion and encourages the city to avoid when possible turning off residential electric service during the months of October through March. I believe that the City should put a freeze on all electric utility shut-offs during the Winter months.
• The City of Newark is very reliant on its electric utility. The University of Delaware is a large utility customer. Beyond our moral obligations, it is important for us to quickly move towards renewable energies to ensure that when UD’s contract is up, the university remains a utility customer. After the city’s conservation report is brought to council I plan to request that the Conservation Advisory Commission develop an aggressive Renewable Portfolio Standards for Newark.
• Economic development, and particularly business recruitment and management, is an areas in which the city needs additional support. It is a need we must consider and address in the future.
• The Police Department has a part-time Victim Support Officer, paid by through federal funding. It is important, in order for the city to continue receiving this funding, to implement a transition plan to fund the Victim Support Officer from city monies.
• The University of Delaware subvention does not meet the costs to Newark of servicing the university. This financial support should be higher and renegotiated. The Planning Department applied its fiscal impact model to the University in 2000. That analysis concluded that it cost the City $3.1 million to provide services to the University and that the City received $2.2 million in return. Thus, the University’s impact on the City’s finances was a deficit of roughly $900,000 annually.
• I planned to propose eliminating our $7,000 trolley fare subsidy because I have seen no movement by the state to begin to address the city’s concerns and make the trolley effective and because, particularly with the state’s budgetary concerns, I do not see this on the horizon. However, it is my understanding that we are contractually obligated to continue this subsidy for 2009. If there are not positive changes to the service I will not support continuing this subsidy for 2010.
• Considering the state of our economy, it is even more important that we implement Operation Round Up, a voluntary program that rounds up one’s utility bill to the nearest dollar. It is estimated this would raise over $50,000/year for economically disadvantaged residents.
The Budget proposal
• First, the Finance Department has lowered its estimate of real estate transfer tax revenue for next year by 270,000, which equates to a 3.375 cent property tax increase. These funds need to be found.
• I support increasing water rates 15% for those outside city limits who use Newark water. This still leaves these customers with a good deal as their water will still cost less than going with a private provider.
• I am proposing to raise our electric utility base rate 0.8%.
• I am proposing that the city no longer provide free yard waste collection or grass clippings collection. However, the city would still make these services available to residents for a fee.
• The State currently has a 50% surcharge court administrative fee. While I do not like the idea of this charge, I believe it is more palatable than property tax and revenues do need to be raised. There is not a good reason for this administrative fee to exist outside but not inside city limits and I believe it would be appropriate for Newark to instate this fee.
• A few additional small but easily implementable fees include raising the fee for reviewing liens, and higher fees for private area lights and a higher license fee for T-Mobile, associated with a new antenna at the West Main Street substation.
• This proposal eliminates the 5 additional police officers from the 2009 budget.
• The City has already realized a savings of $17,000 due to lower audit fees.
• As previously stated, the Main Street recycling program was not included in the initial budget proposal and would cost under .02 cents of property tax.
• Finally, I am proposing a property tax raise of 1 cent instead of 12 cents.
I look forward to hearing proposals and thoughts from other council members and working together to make sure that our final 2009 budget continues Newark’s ability to move forward, addresses our city’s financial obligations, and has minimal impact on our taxpayers.
This proposal includes a $64,000 decrease in the capital program and a $105,000 operating budget surplus.
