NA Budget Hearings for 2007

I'm Disappointed! I figured the blogs would be alive with numbers & speculations by this time but alas, I was wrong. Maybe that's because they were so sparsely attended by the public.

Well the Highwayman was present for both events so here is how it looked from the back row.

On Wednesday evening most city department heads were heard from and all were quizzed by CM Coffey as to where cuts in their respective budgets would be the least damaging. They all responded in kind that their proposals were bare bones as it was. When pressed, they were willing to forego the 3% pay incereases across the board and some indicated that cuts in travel and subscription budgets would be in order.

They were then queiried by CM Price about various small expenditures such as training seminars, flowers, credit card purchases, etc. Most all of them were explained away on the spot as legitimate city expenditures either by the department head in question or by Ms Garry.

Economic Development's Paul Wheatley took it on the chin by proposing that the city work in conjunction with local lending institutions to create a revolving loan pool to provide "gap funding" in the event of an ongoing project stalling in midstream due to a shortage of funds. He suggested this to be an incentive to draw developers to the area. As expected, many on the council could only see this as more coroprate welfare, and veiwed it as an unnecessary burden on the city. "If they can't afford to stand alone, they needn't start" was the attitude prevailing from some.

Finally, the stars that all had come to see ( H.J. Umbaugh Accountants) took center stage and the real show began. As a craftsman, there is little that trips my trigger more than to see another craftsperson ply his or her trade. The presentation given was organized, concise, and professionally done.The technicolor graphs and charts were easy to read & understand, the verbal explanations clear and questions posed were patiently & thouroughly answered.

It was stated up front that the city is in default of the bond covenant for failing to have in cash reserve 125% of the annual bond payment on hand.

The proposal to correct this situation basically had three parts outlined as follows;

1) A 19% sewer rate increase spread out over the next three years which amounts to just over $2.00 per month per year totaling about $7.00 per month the 3rd year. The idea here being to increase income to the point of being able to complete ongoing EPA mandates as well as create the 125% reserve for the bond requirement.

That calulates in my head to about 2 Happy Meals a month the 1st year and a total of a Big Mac Combo and a 12 pack of Bud Light cans per month the 3rd year.

Again, as expected, the rallying cry was this creates a hardship on the low income strata of our city that is beyond the pail.

My observations have been that even at the lowest income levels, more $ than this are spent weekly if not daily on cigarettes & cheap booze. As for me and mine, if my toilet continues to flush for $7.00 a month, sign me up! But I ramble, so next we had....

2) To re-amoratize the existing bond which if agreed to before August 7, 2006, would reduce this years September payment by just over $1 million as well as level the semi annual payments for the life of the bond to a savings of around $478,000 per year.

3) To acquire another $1.28 million in new SRF bonds which would go to reimburse the Sewer Department for EPA mandated projects that have been completed & paid for out of Sewer Department cash. The repayment of this additional money is to be included in the re-amoratization of the original bond payment.

The goal of these three steps are to A) satisfy the EPA and get them off our collective backs, and B) to get the sewer utility back on track with enough income to satisfy the bond covenant.

Predictably, there was not much support for this proposal in the room. CM Coffey restated his "deja vu" speech and CM Price felt the council was being backed in a corner to act too hastily. Mr. Price feels there is more than on way to skin this cat, and that EDIT funds, TIF funds, Riverboat funds, and the jail bond windfall could be put into play to offset the rate increase.

At this point, the question that came to me was if we commit these various monies to the sewers, where are we to get $ for any other need that may arise within the city?

The response from the Mayor, Mr. Fifer, and the accountants was that if nothing was done, the bond payment for September is available. However, that only leaves $130K to $160K in the Sewer Dept. account to operate on . Not nearly enough to begin to be compliant with the bond covenant! At the current rate, the sewer income is at least $1.9 millon per annum what is needed to cover that requirement, not including ongoing projects.

Fast forward to Thursday evening. The remainder of the departments presented their budgets for 2007 and likewise were asked where cuts could be made.

Fire Chief Toran indicated that eliminating one ambulance may help, but other needs such as air pacs & other safety equipmnet was a must for his department to properly do its job.

Council members agreed to cut their travel budget from $4K to around $1K to pay for them to go to training seminars. I found it curious that although willing to eliminate pay increases for city employees, nothing was mentioned about their willingness to forego their salarys for the good of the cities financial health.

Not so long ago some in this group were falling all over themselves to serve in various capacities for free. I guess free is one of those terms that has a myriad of meanings.

At any rate, the second session was the more congenial of the two and ended with the Mayor once again reminding the council that failure to act on the sewer rate issue would result in remaining non compliant with the bond agreement and as such put the city at risk of being sued by the bond holder. At that point a state judge would decide the sewer rate level for us.

He also said that the possiblity of the EPA taking similar action at the federal level was also a possiblilty. He was asked by CM Price about the possibility of imploring the EPA to give us some leeway. He responded that he had attempted to convince them of the hardship this action would cause the citizens of New Albany should it proceed. The EPA's position was that they were unconcerned about the citizens of New Albany, only that said city was violating the Clean Water Act and it would stop one way or two!

Mayor Garner did say that it was time for elected officials to do what was right for the city as opposed to what might get them relected.

The final act of the evening was a decision for the council and the sewer board to meet this next Tuesday following the regular Sewer Board meeting to explore alternatives to the Umbaugh proposal.

The one person I was most interested in hearing from during these proceedings never showed up. That being the city attorney. His proposed budget consisted of Ms. Garry adding a 3% increase over the law departments current budget. Looks like slim to no chance of getting an increase in staff there for next year.

So there you have it sports fans. The game is on and the winners wil be.........?