City Could Face $335K Budget Deficit

Based on assumptions including 2 percent wage increases, the city's 2012 budget could face a $335,000 deficit to maintain the same level of services, officials say.

City Finance Director Robert Scott gave the Finance Committee Tuesday night an overview of preliminary budget planning. The mayor will work with department heads this summer to present a recommended budget in fall.

About $100,000 of that budget gap could be covered by applying 2011 pension savings from the state's budget repair bill, Scott said. 

Common Council President Mark Nelson asked Scott about two other figures that could more than fix the projected deficit. Nelson noted the city annually allocates $400,000 toward a contingency fund. The city has not had to tap those funds, Scott said.

Nelson also asked if the city was projecting a 2011 city budget surplus. Last year the .

Scott said he couldn't speculate what the year-end surplus might be, although it would not be as large as in 2010. "I don't think it's going to be $500,000 but I don't think it's going to be $10," he said.

Scott cautioned against planning to use 2011 surplus to fund 2012 operations.

"I know we don't like to touch our surplus, but it keeps growing every year," Nelson said.

Finance committee members discussed other ways the $335,000 gap could be funded, such as raising fees, cutting spending and services, shifting revenues to different expenses and additional borrowing.

Revenue from cellular tower leases continues to rise and is earmarked to fund improvements for the Greenway Trail Corridor. One discussion item was whether the city should divert those lease payments to pay for other city public works expenses, such as sidewalks.

Funds collected annually from cellular companies have risen from $384,000 in 2009 to $398,000 in 2010 and $415,000 projected in 2011.

Ald. Gerald Mellone opposed raising fees and suggested that all city departments be asked to find, for example, $50,000 in savings from non-labor cost, "discretionary" items.

Ald. Dan Sutton said he believed the city had the potential to save overtime costs, although that could not occur until 2013 after the city's union agreements expire (except for the fire union agreement that expires Dec. 31).

Scott cautioned overtime savings, while substantial, were still relative to the overall city budget in excess of $37 million. Total overtime savings in the highway department, for example, is $60,000, he said.

City Human Resources Director James Zwerlein agreed significant cost savings could be achieved in the future on not just overtime but other labor costs due to the state Legislature's votes to shift pension costs to workers and nearly eliminate collective bargaining for all but existing police, fire, state trooper and transit workers.

Under the biennial budget awaiting the governor's signature, newly hired police and fire fighters would have to contribute half of their pension, currently calculated at 5.8 percent.

Ald. Sutton said he was not happy that different employee groups were being treated differently and hoped the city could rectify that after current agreements expire.

He said he also was "not thrilled" that police and fire officials would be getting 2 percent wage increases next year while not making the pension payments that other city workers will.

Sutton said he hoped the city could gain union concessions on pension payments by essentially threatening to otherwise cut fire staffing per truck from five employees to four.

Other budget information presented by Scott showed: 

• The city will lose about $280,000 in state shared revenue and transportation aids.
• The city will under the state budget repair bill and biennial budget changes. About $105,000 in additional savings will be lost due to a provision to exempt non-union public safety command staff from the pension requirement.
• State-imposed property tax limits would mean Brookfield could collect a maximum of $130,000 more in property taxes, excluding tax levy for borrowing. That is based on projected new construction growth of 0.4 percent, or $25 million.
• The projected budget would increase general fund spending by 1.7 percent, resulting in a $25 increase in the city portion of the property tax bill for the owner of a $335,000 home. The portion of the tax bill for city government would be $1,824, compared to $1,809 last year.
• City employees — union and non-union — would receive a 2 percent wage increase in 2012. Ald. Lisa Mellone said she thought the union contracts called for 1 percent increases in 2012. Scott said that didn't include merit adjustments.