Solutions to city budget crunch

By Sandra Sorrels May 27, 2010 12:20 pm
To the credit of the city manager, I thought it was a brilliant idea to hold town hall meetings and get public involvement in the city budget. The topic was the “critical budget shortfall” of $500,000 and what to do about it. I would surmise from the wording of the survey given at the meeting, that the manager’s preferred solution is a tax levy to “maintain current services.”

There were some excellent suggestions from the public on those surveys, some of which the city manager used in budgeting. For instance, several people suggested eliminating the Urban Renewal District, as those tax dollars amounting to around $500,000 were dedicated to urban renewal only and couldn’t be used for anything else. By cutting the boundaries of Urban Renewal, half of those taxes, or $250,000 was put into the general fund.

Many suggested that salary freezes or reductions are required. “City wages are holding our services hostage,” commented one citizen.

The police and the fire department agreed to a pay freeze, which helped their departments stay close to what they had budgeted last year. Managers also agreed to a freeze. What happened to the rest of the employees? Do they not know that we are in a recession and money is limited? State workers and school district employees have taken furlough days as well as pay freezes.

City employees for the most part work hard and do a good job, some even a great job. However, concessions need to be made if the city is going to survive. The recession has hit us hard in La Grande.

The elephant in the room is health insurance. The city of La Grande, aka citizens of La Grande, pay for each city employee, $1,250 per month, adding up to $1.7 million per year or 13 percent of the entire operating budget of the city.  This seems to me an outrageous amount.

According to the U.S. Bureau of Labor Statistics, the private sector in Oregon pays an average of $4,513 per year per employee. Our city pays $15,000. Most of us in the private sector now have really high deductibles ($5,000 to $10,000) in order to afford health insurance. Is it too much to ask city employees to pay a little more of their premium or take a higher deductible?

If the city paid just 20 percent less for health insurance, it would save $340,000 per year.  If the city paid what the private sector pays, we would save over $1 million per year. It’s really complicated because unions are involved, but the hospital deals with one and their health insurance costs are quite a bit less. They also don’t insure employees who have retired, as the city does.

One citizen asked, “Do unions run the employees?” I would ask, “Do we need a more effective union negotiator?” I know it’s not an easy job and I feel sorry for the person who has to do it. Maybe a committee of concerned citizens could explore health insurance solutions.

When income in business is down, we’re forced to cut staff. Management is first to be cut because they cost the most. Sometimes positions can be combined to do two jobs.

When Ron Perkins took care of the parks, he also managed the pool. When Wes Hare was city manager, he managed the Urban Renewal District. Maybe instead of hiring a full-time manager at the pool, costing more than $100,000 per year, a half-time person could have been hired, saving $50,000.

I know there are good arguments against cutting positions and that many positions have already been cut in the police department, the fire department and public works. I don’t propose cutting any positions in the fire or police department. Everything else should be on the table.

The library’s labor budget went down 7 percent because they hired a librarian at a lesser rate than our previous librarian.

Many citizens in the survey suggested making better use of volunteers for aquatics, parks maintenance, the library and recreation. Five years ago, Mark Touhey ran the parks pretty well with 60 percent of the labor costs of today, $189,593 versus the $329,037 proposed in this budget. I know that we have more parks than five years ago and that Mark had some great volunteers in those days, but don’t we have some newly retired people who would help with the parks?

And why not close City Hall (except for the planning department) Friday afternoons? I’m sure the public would rather have City Hall closed than the library or the swimming pool.

Eastern Oregon University, thanks to President Bob Davies and Past President Dixie Lund, has done a great job of getting its budget in order. They eliminated the equivalent of 18 full-time jobs, without cutting teaching staff. Now EOU’s reserves are back above 10 percent of the annual revenues, enrollment is up and confidence is back.

None of these city solutions are overnight fixes, but we should set goals for reducing the budget and move toward them. If employee costs cannot be reduced, then employees need to be cut. If you keep the right employees, services will not be noticeably reduced.

What I do know for sure is that with the decrease in manufacturing jobs here and the closure of the Boise Cascade mill, this recession will not end anytime soon. A tax levy in this economy will simply not fly.

Sandra Sorrels, a local business owner, has been on the budget committee for five years and was a member of the La Grande City Council in 1988-89.