Tough budget decisions are in store for Aberdeen Mayor Bill Simpson and the City Council this year.
Aberdeen’s revenue for next year is expected to be almost flat, although expenses will jump by at least 4 percent, Aberdeen Finance Director Kathryn Skolrood reported during a special budget workshop Wednesday night focusing on the 2013 operating budget.
This year’s operating budget is about $13 million with about $12.5 million of revenue coming in, which Skolrood said is about $124,000 more in taxes than what was budgeted this year. That still means $522,432 will come out of reserves.
Next year’s budget, without any alterations, is already shaping up to have about $13.5 million in expenditures — half a million dollars more than this year — with revenues coming in at about $12.55 million. Just to fund the current level of services would mean the use of nearly $1 million of reserves, which Skolrood said is not sustainable for the city.
The city is expected to start with about $5.38 million in reserves next year. Skolrood says that $3.25 million of the reserves — about 25 percent of the general fund budget — are required to ensure the city can pay its bills and have a contingency. She said that the only real reserve money the city has left is about $2.1 million, which would disappear by the end of 2015 at the current rate of spending.
Simpson said he would typically have had his budget ideas prepared for the city on Wednesday, but delayed his mayor’s report as he brainstorms with Skolrood on ways to reduce costs for the city. He hopes to come up with his version in the next week or two. As mayor, he prepares the first draft of the city’s budget and the City Council makes changes and approves it.
“We’re still trying to figure out exactly what we want to do,” Simpson said last night.
For the past four years, Simpson has introduced budgets that don’t lay any employees off, but relies on a small amount of reserves and concessions from union employees. The council rarely has made alterations.
Next year’s budget includes contractually guaranteed raises for city employees — 3 percent for employees covered by the American Federation of State, County and Municipal Employees union and a 2.7 percent increase for the police and fire unions.
Health insurance premiums are expected to go up about 4 percent, the smallest increase in years, thanks, in part, to a wellness initiative the city has in place for its employees. The increase in expenditures also includes the retention of two corrections positions, which the city no longer has the grants to fund, as well as $124,000 in capital improvements around the city, the implementation of court security and increased costs for public defense for those who are charged with misdemeanors and can’t afford an attorney.
Simpson said that the only vacant position in the city is a firefighter, the result of when Fire Chief Dave Carlberg retired last month. However, the city is contractually mandated to fill the position to keep minimum staffing levels according to the firefighter union’s contract, put in place a few years after the city laid off some firefighters.
Aberdeen Police Chief Bob Torgerson said he didn’t have any vacant positions, but did have a few patrol officers out on injuries and more waiting to go out to get surgeries, which could reduce his staffing and increase overtime.