'Tight' budget won't require tax rate hike

Friday, May 1, 2009

Lewisburg's $10.5 million budget is "tight," but it's "not hurting," according to the city treasurer who offered several cost cutting suggestions Tuesday evening - as did members of the City Council during a non-voting workshop.

"It's going to be tight this year," Treasurer Connie Edde said. "But it will be our 20th year to not go up on property taxes," Edde said during a 90-minute discussion that included her reminder that the city could raise the local option sales tax rate.

Sales tax rates are set locally and statewide. Edde reported recurring indications from the state capitol suggesting local governments take their rate to the maximum allowed. If not, then the state might intervene, raise that rate and keep the revenue.

State and local sales taxes on product and services total 9.25 percent in Marshall County. The state limit is 9.75 percent. Edde is "not advocating raising our local sales tax," she said, but it's an option available to the city.

"We're not gloom and doom, but we need to go lean and mean," Edde said after itemizing changes available to the Council such as scheduling some employees off at the golf course when it's raining, and proceeding with a warranty lawsuit over a $150,000 HVAC unit at the recreation center.

Meanwhile, City Manager Eddie Fuller distributed a proposed budget of $102,000 for Goats Music & More in October, when a $20,000 reduction in spending would cut that part of the budget by 17 percent from what it was last fall. In response, the Council praised the festival, but encouraged spreading the cuts beyond the categories of promotion and music.

There's another cost savings built into the proposed budget as Edde remains confident that the city won't have to spend $134,000 in tipping fees at Cedar Ridge Landfill because of the prospect of Waste Management Inc. receiving permission from the Tennessee Department of Environment and Conservation to use more of the land the company has west of town. Company officials said if they get the landfill expansion permit, they'll let the city dump for free as long as the facility is open.

Offering a broader view, Fuller said changes in revenue will probably "be a wash" with property tax payments increasing by about $100,000 and sales tax revenue dropping by a like amount.

The city's payroll will probably remain the same, the city manager said, noting last year the Council discussed providing merit raise.

Councilman Robin Minor responded: "We don't have the money for it." Councilman Phil Sanders suggested the leaders "be optimistic," and if the economy recovers, then pay raises could be readdressed. Councilwoman Quinn Brandon said, "We won't get the property tax revenue" as expected. "Foreclosures are up."

Edde said a state-funded program to employ summer workers age 16-24 would save the city money because "It does not cost us a dime." Summer jobs for youth at city departments could be at the airport, the cemetery, recreation center and City Hall.

Several small savings could come from removal of drinking water dispensers installed at the recreation center when plumbing failed, Edde said. The bottle service continues months after the plumbing was repaired and water fountains were working again.

Another cost savings for the recreation department arises from the fact that the city is paying for two dumpsters at the Recreation Center where some officials suspect that some city employees might be bringing their household garbage to the city dumpsters.

Sanders said it's easy to correct: "Stop it or you fire them."

Minor is on the Recreation Board and agreed to raise that and other matters to the advisory panel.

Discussion was also heard on other budget issues such as:

* The Tennessee Valley Authority raised rates by 9 percent and then the rate was uop 20 percent.

* Blue Cross-Blue Shield proposed a 40 percent increase for premiums, but negotiations led to an increase of 18 percent.

* Failure of a DecTron heating, cooling and dehumidification unit at the Recreation center's swimming pool was the subject of a five-year warranty claim three days before the guarantee expired. Replacement costs could be 150,000. A compressor costs $26,000. The machine serves the pool area only, so without it a portion of the Recreation Center might have to close. City Attorney Bill Haywood has been preparing a complaint to be filed in court over alleged failure to comply with the warranty.

* Lewisburg spent $500,000 for the old Murray arm property across Rock Creek from the city park on Old Farmington Road. While that spending isn't anticipated again, the city does not have the $500,000, but it will probably sell part of the land to the Water and Wastewater Department for a storage tank.

* The city has $1.55 million "tied up" in a business park building constructed by the ciy to help attract new employers. Discussion among members of the council revealed a willingness to consider selling the building and land for the cost of constructing the building to help City Industrial Development Director Terry Wallace attract a business to buy and use the building.

The next regular voting meeting of the Lewisburg City Council is scheduled for Tuesday, May 12.