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Nigh calls for cuts in budget

April 18, 2002|BY DAN KULIN /Staff Writer

dank@herald-mail.com

Hagerstown City Councilwoman Penny May Nigh's plan to eliminate the need for proposed city tax increases calls for cutting thousands of dollars the city gives each year to local nonprofit groups, and spending hundreds of thousands of dollars from the city's reserve account.

"I don't think the citizens should be hit again," Nigh said, referring to last year's city tax increase. "People are fed up with the increases."

City Administrator Bruce Zimmerman's proposed $79.55 million budget for the fiscal year beginning July 1 calls for 7.2 percent increases in the city real estate and business property tax rates.

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In a memo distributed to the mayor and council members Tuesday night, Nigh calls for cutting $588,000 in spending and taking $612,000 from the city reserve fund, which essentially is the city's savings account.

Nigh also proposed reducing spending on Fairgrounds Park, downtown beautification, and the ice rink.

She also wants to cut $169,400 in contributions to groups including the art museum, public library, municipal band, and Citizens Assisting and Sheltering the Abused (CASA), which operates a domestic violence shelter.

Community Rescue Service, the private nonprofit ambulance company that serves most of Hagerstown and parts of the surrounding area, would receive $50,000 from the city under Nigh's proposal.

"With all of these agencies knowing the city is in a deficit, can't there be one year we say we can't do it? Except for CRS, which is vital, there's no other ambulance company (in Hagerstown)," Nigh said.

Dipping into the city's reserve account is usually a "no-no. ... Because we need it if there's an emergency" Nigh said. "But I'm saying, 'Can't we use it one time?'"

Nigh said she wants to find another way to pay for $150,000 in new vehicles. This expense is listed on Nigh's memo as one of her proposed cuts, but she said if the money can't be found elsewhere the council may have to approve the expenditure.

Not all of Nigh's proposed cuts would affect the city's general fund, which pays for departments such as police and fire and is the only city fund that receives money from city taxes.

For example, Nigh proposes cutting $75,000 that would help pay for the design of Southern Boulevard, also known as the Funkstown Bypass. The tentative budget calls for borrowing that $75,000.

Nigh's proposals would free up $1.2 million, which is more than is needed to cut the proposed tax increases from the budget.

The proposed tax increases would bring in about $930,000 in additional revenue, city Finance Director Al Martin has said.

Nigh's proposed cuts, including the $150,000 for vehicles, would trim about $480,000 from the general fund. About $450,000 would need to be taken from the city reserve account to eliminate the need for the tax increases.

Nigh said her goal is for there to be no tax increases. If the council agrees to fewer budget cuts than she's calling for, she would want more money taken from the reserve account, she said.

There is about $5.5 million in the city general fund reserve account, about $4 million of which is cash, city Assistant Finance Director Ray Foltz said.

Mayor William M. Breichner said he hadn't fully reviewed Nigh's proposals yet, but said cutting city contributions to nonprofit groups and taking money from the reserve account are not good ideas.

Some groups depend upon the city contributions, he said.

"In my opinion it is not a very good policy to affect your reserves like that," Breichner said. "It's been a great year for snow removal, but next year could be the worst ever."

The reserves are needed in case of emergencies, he said.

Nigh spent about two weeks going through the hundreds of pages in Zimmerman's budget proposal, putting together the list of budget cuts she'd like to make, expenditures she feels should be scrutinized, and possible money-saving or money-generating changes that should be looked into.

She suggests the city find out whether it would be cheaper to hire an attorney to work for the city full time. The city contracts with the firm Urner, Nairn & Boyer.

Nigh also suggests the city adopt a landlord registration program, which would charge a fee.

Increasing the tax rates 7.2 percent would help balance the proposed $25.7 million general fund. The proposed general fund includes an almost $1.2 million increase in spending on city employees' wages and benefits, plus about $500,000 in increased spending on vehicles and construction projects.

The proposed tax increases would cost a Hagerstown homeowner with property assessed at $100,000 an additional $53 next year.

A business with equipment assessed at $10,000 would pay an additional $13 next year if the proposed tax increases are approved. Manufacturing equipment and inventory items are exempt from this tax.

The proposed budget also calls for the water and sewer rates each to increase 3.5 percent in October.

A public hearing on the proposed budget is scheduled for April 30 at 7 p.m..

The council is scheduled to approve a new budget on May 28.

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