A slightly amended 2011 city budget was approved last week by the Crestwood Board of Aldermen.
The board granted final approval Dec. 14 to ordinances setting next year’s budget for the city’s major funds.
Overall, the 2011 budget anticipates total revenues of roughly $11.6 million and roughly $11.9 million in expenditures. Reserves would be used to cover the resulting deficit.
The board voted 5-3 to approve the 2011 general fund budget. Ward 2 Alderman Jeff Schlink and Ward 3 Aldermen Paul Duchild and Jerry Miguel were opposed.
Aldermen voted 6-2 to approve the 2011 park and stormwater fund budget. Schlink and Duchild were opposed.
The board voted 5-3 to approve next year’s capital improvement fund budget. Schlink, Duchild and Miguel were opposed.
In addition, the board voted unanimously to approve motions by Ward 1 Alderman Darryl Wallach to reduce a proposed $500,000 transfer from the general fund to the park and stormwater fund by $23,457, and to decrease parks and recreation expenditures within the park and stormwater fund by the same amount.
As initially proposed in the budget, a $500,000 transfer from the general fund and a $300,000 transfer from the capital improvement fund to the park and stormwater fund would help make roughly $1.06 million in principal and interest payments next year on certificates of participation for the city’s aquatic center.
But the city expects to see some savings next year in the Parks and Recreation Department, City Administrator Jim Eckrich said. The department will undergo a restructuring that will include the hiring of a program supervisor to replace Parks Director Amy Meyer, who left the city earlier this year, he said.
The supervisor position was advertised on the city’s website with a starting base salary of $31,064 — less than the $65,000 base salary Meyer was paid.
In making the motion to reduce the general fund transfer to the park and stormwater fund, Wallach said he was impressed by the city’s sales-tax receipts for the past four months, which he described as “much better than anticipated.”
“I’ve been looking at the trending of the city the last four months and comparing 2009 to 2010, if you look at the last four months — September through December — we’ve actually increased in sales tax (revenue). The increase for those four months was $55,000. That’s technically a 3-percent increase for those four months,” Wallach said. “So I’m optimistic about the city. I think we’re hitting a bottoming point.”
While no employee pay increases are budgeted for 2011, the budget does include a 15-percent increase in health care costs.
Major 2011 capital-improvement expenditures include: $80,000 placed into savings for a fire truck; $128,504 for police needs, including three vehicles; $55,000 for information systems needs; $120,000 for the city-funded part of the Whitecliff Service Bridge construction; $34,400 for the city-funded part of the design of Spellman Avenue improvements; $80,000 for in-house concrete street improvements; $21,000 for building maintenance and $73,340 for public works vehicles and equipment.
While $357,000 was requested from public works staff for mill and overlay work on 13 streets in 2011, Eckrich did not recommend any money for these projects so the $300,000 transfer could be made to the park and stormwater fund from the capital improvement fund for the aquatic center COP payments.
No major park or stormwater projects are budgeted in 2011.
Aldermen last week rejected motions by Miguel to set up and nominally fund a retiree health insurance fund, and to remove the replacement of two police cars from the 2011 budget.
Miguel’s motions were defeated 6-2 with only he and Duchild in favor.
Both aldermen expressed a desire during a budget work session last month to set up and appropriate money toward a retiree health insurance fund.
At the work session, Miguel referenced a page from the city’s most recent financial audit that states as of Dec. 31, 2009, Crestwood’s total obligation for employee benefits besides pensions — also known as Other Post-Employment Benefits, or OPEB — was $242,013. The audit states Crestwood paid out $23,148 in OPEB in 2009.
“That is a real liability. It is shown on our financial statements, and really as a matter of fairness to employees, I think the city needs to establish a retiree health care fund, and that fund needs to be funded,” Miguel said during the Nov. 9 work session, referring to the roughly $242,000 net OPEB obligation.
“It seems to me that we have a responsibility here to our employees to create such a fund, and we also have a responsibility to the taxpayers to bring them to the awareness that we have this future liability, in contrast to what is happening in our country right now where all of a sudden cities and states are realizing they have this tremendous unfunded liability.”
Eckrich told the board retiree health benefit costs likely won’t fluctuate greatly year to year.
“My opinion is that health care issue differs dramatically from the ones Alderman Miguel referenced … There’s always going to be retiree expenses related to health insurance unless we change our program, unless we change our ordinance that covers retirees for a defined period,” he said. “It does not fund their health insurance indefinitely. It’s a short period. I think it’s 10 years for public safety, five years for general employees. We have money in the budget this year. That amount is not likely to vary substantially over time. It doesn’t cover families. It only covers … individuals. It’s funded in the current budget, and the amount’s always going to be similar to that …
“It’s the auditors’ obligation to point it out, but I don’t see it as a major issue,” Eckrich continued. “The important difference here is that with the pension, it goes on indefinitely. With the health insurance, it’s only for a finite number of years after your retirement. That’s the biggest difference between the two issues.”