WATERTOWN City Council members warned Monday that property owners can expect a double-digit tax rate increase after City Manager Sharon A. Addison unveiled a $39.9 million budget that carries a tentative 23.6 percent increase in the tax levy.
As proposed, the spending plan would increase the amount to be raised by property taxes to about $9.3 million. The projected tax rate would be $8.93, a $1.63, or 22.3 percent, increase, per $1,000 of assessed value.
A taxpayer with an average assessed property of $107,000 would pay $955.50, or $174.41 more than this year.
During what was described as a budget introduction Monday night, Watertown City Council members agreed they have a lot of work ahead before adopting the final budget.
Mayor Jeffrey E. Graham predicted that council members will use some of the citys $8.4 million fund balance to lower property taxes. He pointed out that the council has tapped into the fund balance to reduce property taxes 5 percent in past budget years, so it should have known that this day would come.
But council members Teresa R. Macaluso and Joseph M. Butler Jr. contended that using $1 million of the fund balance could hurt the citys bond rating and cause more financial problems down the road.
I believe well get to a double-digit this year. Im not in favor of it, but our backs are against the wall, Ms. Macaluso said after contending that council members should leave the fund balance alone and not use it to lower the tax rate.
In recent weeks, Ms. Addison has been warning the Council to brace for a difficult budget year, with the city facing a budget gap because projected sales tax revenues have not come through.
Her proposed budget reduces projected sales tax revenues from $18.1 million to $17.4 million.
Overall, the city faces a $1.7 million budget gap going into the 2014-15 fiscal year. While working on her budget, Ms. Addison instructed her staff to make 10 percent across-the-board budget cuts in the police, fire, public works and parks departments and the Roswell P. Flower Memorial Library. The other department heads were told to find 2 percent budget cuts.
In her financial package, Ms. Addison has proposed not using any fund balance to help keep taxes down, saying it would be fiscally dangerous to continue that practice as was done in previous years.
The city would spend an estimated $39,928,817 in the general fund in the coming fiscal year, down from the $41 million budgeted this year, a decrease of about $1.1 million or 2.7 percent.
In explaining the budget reduction, Ms. Addison said the city would not rely on sales tax revenues as much as it has in the past.
In arguing against using huge chunks of the fund balance, Mr. Butler said the city now enjoys a healthy credit ranking, so the city must be careful in how it plans its financial future. He noted debt may be climbing with a planned overhaul of the Watertown Municipal Arena ice rink at the same time the fund balance has been shrinking.
Were going both ways in the wrong direction, he said. I want to do whats right for the city.
The budget would include:
n Closing the pool in Thompson Park and restructuring the Parks and Recreation Departments summer playground program.
n Eliminating pay increases for management and flu shots for retirees and discontinuing an employee assistance program.
n No change in health benefit premiums.
n Cutting one of two bulk drop-off events during the year.
n Implementing a 5 percent rate increase for metered sewer services and a 20 percent fee increase for tanker-hauled sludge and leachate.
Ms. Addison also recommends the council take a series of steps to correct the course of expenditures and preserve fiscal health during the next five years and beyond, she wrote in her budget message.
In explaining the recommendations, Ms. Addison said they would change the way of doing business.
She and her staff also suggest cutting back the scale of the proposed $6.2 million to nearly $7 million renovation to the ice arena at the Alex T. Duffy Fairgrounds, which has been a major goal of council members. Instead, they recommend making only necessary improvements to the facility.
Other future considerations include eliminating the citys refuse and recycling collection and either eliminating or modifying the citys sidewalk program.
They also suggest reducing the hours at the Roswell P. Flower Memorial Library, after the library added Sunday hours during the past year. They also would like to see the librarys new security contract, which began just a few months ago, eliminated.
The CitiBus operations should be transferred to a regional authority, they suggest. They also would like to revamp the citys health care and prescription coverage for employees and future retirees, although that would require employee unions to agree on any possible changes.
The public got its first look at the tentative budget when it was released on the citys website Monday morning. Council members were given the proposed budget Friday. Council members then had a chance to look through the document over the weekend.
They plan to meet about three times before finalizing the budget. The public hearing was scheduled for 7:30 p.m. May 12, with a budget session starting that night at 6 p.m. and another one on the following night.