Council To Begin Budget Ordeal

By: David Mcgee | TriCities.com
Published: May 26, 2009

BRISTOL, Va. – The wrestling match over the fiscal 2009-10 budget resumes tonight when a divided City Council holds first reading.

For the past month, the council has digested and debated a draft $50.3 million general-fund spending plan that includes no salary increases for city employees and reduces capital spending.

At the heart of the debate is a plan to balance the budget by restructuring two bond issues and eliminating a $1.1 million payment due during the upcoming fiscal year. Without restructuring, city leaders will have to find an additional $1.1 million in reductions.

As an alternative, the council is expected to consider a version featuring additional cuts of 5 percent to some city departments. Councilman Jim Heaney requested information about the impact of the additional cuts during a May 7 budget work session.

“We’ll have the first public hearing on the budget Tuesday and the second public hearing June 9,” City Manager Bill Dennison said last week. “I don’t know what the council will do.”

Mayor Jim Rector, Vice Mayor Fred Bowman and Councilman Ernie Sprouse have said they favor restructuring the debt. Heaney and Odum have expressed doubts and concerns.

The plan, which would cost the city about $107,000 in refinancing fees, also has been endorsed by Davenport & Co., the city’s Richmond, Va.-based bond counsel.

“Whether we do the restructuring or not, we need to look in more depth at reducing the budget now,” Heaney said during the council’s most recent meeting.

Rector has called for approving the entire plan and said he doesn’t know where additional cuts would come from, without reducing services or cutting employees. The city’s current plan includes no layoffs.

Dennison said the restructuring wouldn’t extend the city’s time frame to pay off the debt, but would eliminate large payments scheduled in fiscal 2009-10, of $1.1 million, and a $500,000 payment slated for 2010-11.

The council also could balance its budget by raising the real estate tax rate to capture a portion of the recently completed citywide reassessment, but all five council members have said they wouldn’t vote to further increase taxes or fees.

The draft budget is based on reducing the tax rate to 94 cents per $100 of assessed value, which amounts to an increase of less than 1 percent for property owners – because of the increase in property values.

Tonight’s agenda also includes voting on the School Board’s $24.6 million budget, which currently includes about $8.8 million in local funding.

School officials said imposing that additional 5 percent cut represents a $400,000 reduction in funding.

“That would be catastrophic,” School Board Chairman Ronald Cameron said. “We’ve already cut our budget $1.6 million.”

Unlike the city, the school plan eliminates some teaching, administrative and support positions, plus reduces or eliminates extra-curricular supplements. No school employee will receive a wage increase and many can expect to make less money through a furlough program.

During the meeting, council members also are expected to vote on a new health insurance contract for employees and consider a plan to disburse federal Community Development Block Grant funding.

The meeting is scheduled to begin at 7 p.m., in the City Hall council chambers, 300 Lee St.

dmcgee@bristolnews.com | (276) 645-2532