Special Board of Aldermen Public Hearing — 5/17/2018 Page 2
have for some time because of the opioid epidemic and the resulting problems. But we tried to stick
with keeping hopefully what we have without adding too much because we want to keep the budget
very tight.
One very significant issue in the budget is always the Capital Equipment Reserve Fund or CERF. We
have funded that a $1 million dollar level and as a result have talked with departments and deferred
purchases of some items of equipment into the next year or two. | think Mr. Chair when we get to the
issue of the escrows, which is going to come up in the fall, this is an area that we need to consider
backfilling at that time, as we have in prior budget years to help to contribute money into the CERF
fund making sure that we maintain the quality of equipment that we have and a reasonable
replacement schedule.
There are some cost pressures in the budget on non-salary items, you see that in the next line item.
Probably the most notable is that there is $600,000.00 increase in our solid waste costs. As you
know, we contribute tax money into the Solid Waste Enterprise Fund. One particular cost that has
gone up considerably is the disposal of the recycled items that we have. We have a contract with
Casella who is a major hauler and they dispose of the recycling that we collect curbside as well as the
recycling that people deliver to the landfill.
In talking with Public Works, the cost of disposal of about between 5,000 and 6,000 tons of recycled
material has gone from less than $1.00 a ton in July of 2017, so that’s about 10 months ago, gone
from less than $1.00 to now $82.00 a ton, which is the current rate. So it has gone up 100 times in 10
months. We have budgeted in the budget $400,000.00 to dispose of recycled items, which if the
current rate of $82.00 a ton holds, will probably be enough. However, Casella has warned that it is
possible, the recycling market is bad, and it is possible that costs could go up more than that, in
which case we might have to look at trying to find another source of funds or some emergency
measure. But right now it looks like we have budgeted enough, even though costs have gone up as
much as | have indicated.
We are concerned about some reductions as always in State revenue. One area where we are
seeing a reduction in revenue is the School Stabilization Grant which has a very long history but it
now is about $4 million of the total in-school aid that we got. $4 million of the school aid is the
Stabilization Grant and that is being reduced by about 10% or about $400,000.00 a year so we will be
getting $400,000.00 on the Stabilization Grant less in Fiscal 19 then we do in the current year which
is Fiscal 18. Those are some of the challenges.
In terms of our strategy for this year, first | presented the budget earlier than ever before. At the first
meeting in March, just a couple years ago it was the first meeting in May and the point here is to give
the Board of Aldermen more time to consider the budget in a more comfortable manner allowing a
few months rather than 4 to 6 weeks, both because of the challenges, the complexity of the budget
and because of the fact that we have a number of Aldermen who have not been through the budget
process before. | think it made the process much more constructive to have proposed the budget
back in March.
Again, one of our strategies is to limit the budget as much as possible to make sure that the
assessment has the least possible impact so that the budget itself doesn’t result in any significant
increase in property taxes. We have also tried to maintain level services in the face of the fiscal
challenges that | have outlined.
Here is a slide that you have seen before which just outlines the potential effect of the revaluation.
This is just a model, we are trying to make sure we maximize commercial values, but as you can see
here it could result in a shift of values. Residential properties currently represent about 62.5% of the
entire assessed value of the City of $8.5 billion dollars. That could go up as high as 66% and
