The Hagerstown City Council said Tuesday that it doesn't want to raise refuse rates to balance the fiscal 2012 budget, asking instead that city officials find an additional $500,000 to cut from general fund expenditures.
At the same time, the council also indicated its intent to dip into reserves to purchase a new $600,000 home for the Antietam Fire Co., that it will lease back to the company at 3 percent interest.
General fund revenue for fiscal 2012 is estimated at about $36.37 million, while expenditures are expected to reach about $36.36 million, according to city budget documents.
City staff members proposed balancing next year's budget, in part, by raising the refuse rate by $12.50 per quarter, from $37.50 to $50, to generate $720,000.
None of the five council members or the mayor favored raising refuse rates more than what it would take to cover the cost of service.
"What I won't vote for, and I don't think any of us will, is to balance the budget on the back of the refuse collection. I think we all feel similar on that," Councilman Lewis C. Metzner said.
Mayor Robert E. Bruchey II said it would take about a $3.50 increase in the refuse rate to cover operational costs for the service.
Estimating that not raising the rate would leave the city about $500,000 short on revenue, council members and Bruchey proposed a mix of options to consider as possible savings or other revenue generators.
Bruchey proposed doubling the hourly parking rate to recoup a proposed $100,000 general fund subsidy for the parking fund. The current rate is 25 cents per hour.
"We need to try to find ways to cover that general fund subsidy by user fees and not on the back of every taxpayer," he said.
Only Metzner echoed the sentiments of citizens who testified during the public hearing last week, suggesting the council raise the property tax rate by 2 cents. The city's current rate is 78.8 cents for every $100 of assessed property value.
Due to declining property values, Hagerstown will fall 13 cents short of constant yield in the coming fiscal year, Metzner said. Raising the rate by 2 cents means the city is, in effect, lowering its tax rate by 11 cents, he said.
No other member of the council supported his idea.
"I'm not willing to raise taxes unless we have a broad consensus, and I don't think that we do," Councilman Martin Brubaker said.
Councilwoman Ashley C. Haywood suggested the city reduce employee overtime, saying some departments were proposing increases in overtime pay of more than 50 percent.
"For me, from an operational and business standpoint, overtime is something to avoid not budget for," she said.
Councilman Forrest W. Easton had the largest list of suggested cuts.
He suggested the city cut unallocated expenditures and expenditures for Christmas decorations, traffic calming, the Hagerstown Suns, police professional services, the golf course, the city pool, fire department contractual services and overtime for the fire department.
The council must introduce the budget at its May 17 meeting to adopt it by the May 31 deadline, Budget Officer Al Martin said.
It will also vote May 17 on introducing an ordinance authorizing the purchase of the former Four Seasons RV building at 790-800 Potomac Ave. for lease to the Antietam Fire Co. as a new fire station.
Michelle Burker, acting city finance director, said the city would spend $600,000 from its reserves to purchase the building.
It would lease the building back to the fire company for $2,530 a month for the next 30 years, Burker said. At the end of the 30 years, if the company does not default, the city would transfer the building's title to the company, she said.
The city would realize greater return investing in the building than leaving the money in reserve, she said.
In addition to purchasing the building, the city would grant the fire station $200,000 from city bond proceeds toward renovations, Burker said.