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City Council focuses on challenging financial issues

February 25, 2006|By DANIEL J. SERNOVITZ

daniels@herald-mail.com

HAGERSTOWN -

Hagerstown City Council members will confront a series of tough choices in the weeks ahead as they are forced to balance a variety of competing financial issues, including staffing needs, the accounting of retiree health benefits, a slowdown in development projects and an overdependence on property tax revenues.

"I'm not suggesting that this is an alarming situation, or a crisis, but I think we need to work through it and consider it as a package," City Administrator Bruce Zimmerman said Friday during a city council budget retreat.

Preliminary city figures do not include a tax increase, but City Finance Director Alfred Martin said any additions, such as hiring more workers, could force the city to look at increasing taxes, finding other revenue streams or cutting other programs.

Among the city's challenges, Martin said, is a change in Governmental Accounting Standards Board requirements. The change calls for the city to earmark funds in its budget to cover the cost of health insurance for future city retirees as well as current retired city employees.

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The city will not need to make the change before its 2008-09 budget two years out, but Martin said the city might need to consider trimming the retirement health insurance package it offers to city workers in the future.

"The underlying principle that we need to think about is being fair with our retirees, with our employees, and at the same time, with our taxpayers," he said.

Several departments are expected to request staffing increases, including 19 positions for the fire department at a cost of $946,798, and eight for the police department, at a cost of $419,601. In addition, the city is awaiting the results of a commissioned wage study that could call upon the city to increase the salaries for its employees to avoid losing them to employers offering more money.

Other issues include federal reductions in Community Development Block Grant money, rising fuel and electricity costs, and the possibility of a tapering in growth and development projects.

Zimmerman is expected to submit a proposed budget to the mayor and council by March 31, according to a schedule established in the city's charter, and the mayor and council will review and hold hearings on the budget in April and May. Council must adopt the budget by May 30, to go into effect on July 1.

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