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Hagerstown officials roll out preliminary 2012-13 budget numbers

Council members in favor of keeping taxes steady

February 06, 2012|By C.J. LOVELACE | cj.lovelace@herald-mail.com

HAGERSTOWN — The Hagerstown City Council got its first glimpse of a preliminary budget for fiscal year 2012-13 and, while it’s still early in the process, it does not include a property tax rate increase.

“The signs are good that we’re going to be able to balance the budget without a tax increase,” Councilman Martin E. Brubaker said.

Preliminary figures for next year’s budget keep the property tax rate steady for the fifth straight year, according to a report from City Administrator Bruce Zimmerman at a city council budget retreat Jan. 31.

The current tax rate is 78.8 cents per $100 of assessed value, which keeps rates unchanged since fiscal year 2008-09.

“Everybody’s in favor of holding the line on taxes whenever possible,” Councilman Lewis C. Metzner said. “Clearly, when our city administrator presents a budget to us that involves no tax increase, I think there’s a lot of people that are very happy.”

Metzner said the city has been able to cut expenses the past few years to minimize the strain on the city’s taxpayers, despite declining revenue.

Revenues are projected to decrease for the third straight year, but not by as much as they did in the previous two years, the report said.

City administrators have until March 31 to submit the proposed 2012-13 budget to Mayor Robert E. Bruchey II and the five-member council.

Early projections indicate the city can expect $35.6 million in general fund revenues, down by about $312,000, or 0.9 percent, of the current fiscal year revenues of $35.9 million.

Projected expenditures of $35.8 million are up about $80,000, or 0.2 percent, from the current year’s $35.7 million.

The projection based on those figures would be a net shortfall of about $244,000 that will need to be made up to balance the spending plan.

Michelle Burker, the city’s director of finance, said it’s too early to tell if a tax increase could be avoided, but officials will look at the operating budgets of the city’s departments to determine where additional cuts could be made to make up the difference in the proposed budget.

Burker said the council has been “extremely responsible of city expenses.”

Councilman William M. Breichner acknowledged that the numbers were preliminary, but said they give the council a “good indication of what we’re going to have in the coming year.”

Breichner said he is in favor of holding the line on taxes, despite projected expenditure increases at the state and county levels.

“I know the jobless rate, the economy is not good and raising taxes even a little bit would probably not be a good idea,” Breichner said. “I know the state is looking at a lot of increases in costs.”

The city has cut 43 positions covered in the general fund and 13 in other city operations, the report said, for an 11.5 percent reduction in staff from the 485 total positions at the beginning of the previous fiscal year.

“Across the board, we’ve been trying to find ways to make do with less,” Brubaker said.

Brubaker said the city has cut down on the amount of capital projects while city employees have worked three years without a cost-of-living pay increase and two years without step increases. Zimmerman’s preliminary report calls for another year of frozen wages for city employees.

The employees did receive $1,000 holiday bonuses in November. Bruchey said then that the bonuses were a way to thank workers, who took 10 furlough days last year that decreased their annual wages by 3.8 percent.

“We’ve tried to work a balance in the government and work quietly to try to do that with the minimum impact on the citizens,” Brubaker said. “So far, it’s been working out fairly well.”

Uncertainly remains over the impact of Gov. Martin O’Malley’s state budget proposal, the report said.

The governor’s proposed budget includes a 35 percent redution in state aid for police protection and a 34 percent drop in highway-user revenue for municipalities, from $9.9 million this year to $6.5 million next year, Zimmerman wrote in the report.

In the city’s other departments, which are funded by user fees, Burker said water and wastewater costs will continue to rise as part of a five-year plan that started in 2009.

City residents can expect to see increases of 5 percent for water and wastewater in fiscal year 2012-13, while out-of-city users should expect hikes of 6.5 percent for water and 3 percent for wastewater, Burker said.

Metered parking rates were increased this year, but there are no plans to increase them in the coming fiscal year, Burker said.

The city’s unassigned reserve fund balance is projected to be about $7.9 million to $8 million at the end of the current fiscal year on June 30, 2012.

“We have a very healthy reserve fund balance,” Burker said. “We’ve done really well with that.”

Council members Forrest W. Easton and Ashley C. Haywood could not be reached Monday for comment.

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