Council amends, then approves 2017 budget

Here are my notes from last night’s city council meeting:

2017 Budget – Council unanimously approved the 2017 budget, after making 2 amendments:

First, Brian Lowdermilk made a motion to reduce the budget by $1.5 million. As you’re aware, storm-water fees were increased last year. It is likely the city will use this additional revenue to service new debt, for the purposes of major storm-water improvements. The administration said we probably won’t actually incur the new debt in 2017. Therefore, it was appropriate for Brian to make this amendment, so that the budget reflects reality. His amendment passed by a 4-3 vote (D’Antonio, Costello and Pribonic voted “no”).

Second, I made an amendment to reduce the Clerk of Court’s budget by $31,000. The clerk’s office dramatically increased its funding request last year. My amendment in 2016 reduced the allocation by $71,000. The clerk came back to us later in 2016, and obtained an extra $25,000, but she told us that the technology advances in her office would permit her funding to be reduced in later years. My amendment this year reduces the clerk’s allocation to the same level as my amendment in 2016, with two adjustments: (1) an additional reduction to reflect the fact that 2016 had 27 payrolls, and 2017 has 26, and (2) an additional allocation to reflect the fact that staff received a reasonable 2% pay increase. My amendment passed by a 7-0 vote. Then the budget passed unanimously.

As I said last month, this is a solid budget. It is VERY conservative in terms of estimating tax revenue. I say this because the budget projects 2017 to be one of the worst years in the past few decades; however, nothing in the national economy or local economy should lead us to that prediction. I suppose it’s better to receive a positive surprise at the end of the year (i.e., our revenue beat projections) than a negative one (i.e., revenue failed to meet projections). If we have a decent year on the revenue side, then we will have yet another surplus.

Seasons Road – Phase 3

Council approved a tax incentive for the third phase of the Seasons Road Business Center. This third building will be on the east side of Route 8, like the 2 existing structures, but it will be about 20% larger and 50% more expensive to build than its siblings. The first two buildings are almost full, by the way.

We expect that Phase 3 will create 60 jobs, with $40,000 in annual income tax for the city. The incentive we approved allows the “owner” to pay income taxes at the current appraised value (i.e., the value without the building) for 15 years. It’s an annual savings of $117,000 per year. I placed “owner” in quotation marks because it is really the future tenants that will be paying income taxes. By the city passing this tax incentive, it will be easier for the owner to attract tenants for the building, which is constructed on a speculative basis. The owner will also compensate the school district with an annual $55,386 payment, to make up for the district’s lost revenue.

Next meeting

Council will meet next on April 13. At that time, we will continue our discussion about increasing EMS fees and moving/eliminating the primary elections.