Sunset Hills board eyes wage freeze to balance city’s proposed ’12 budget

By MIKE ANTHONY

Executive Editor

A majority of Sunset Hills aldermen last week voiced their support for a freeze on employees’ salaries to balance the city’s proposed 2012 general-fund budget.

The Board of Aldermen conducted the first reading of the proposed 2012 general-fund budget that projects revenues of $6,932,966 with anticipated expenditures of $7,045,584 — a deficit of $112,618.

Final approval of the 2012 budget will be considered Dec. 13 by aldermen.

If the budget is approved without a salary freeze for next year, the general-fund balance would drop to $5,456,983 from $5,569,601. But if employees’ salaries are frozen for 2012, the proposed budget would be more than $27,000 in the black.

Aldermen who favored a freeze on employees’ salaries for 2012 include Dee Baebler of Ward 1, Scott Haggerty of Ward 2, Jan Hoffmann of Ward 3 and Pat Fribis and Claudia Svoboda, both of Ward 4.

Opposed were Ward 1 Alderman Frank Hardy, Ward 2 Alderman Tom Hrastich and Ward 3 Alderman Stephen Webb. The three said they would prefer to adhere to the provisions of the city’s Personnel Manual regarding salary increases for employees.

For 2012, city officials are anticipating a reduction in total general-fund revenues and expenditures compared to 2011 projections. Total general-fund revenues are projected to decrease by $405,143 compared to 2011. However, excluding federal grants, revenue is projected to increase by $210,876 compared to the current year.

Total general-fund expenditures are expected to drop by $645,877 compared to 2011. Excluding federal grants, expenditures are projected to decrease by $29,858.

Besides the general fund, the city’s capital-improvement fund balance is estimated to improve to $797,357 in 2012 from $694,292 in 2011, and Sunset Hills’ storm-water/local parks fund balance is projected to decrease to $1,364,883 in 2012 from $1,437,917 in 2011.

City officials expect the county road fund balance to drop to $133,027 from $163,027.

Hrastich, who serves as chairman of the city’s Finance Committee, presented the proposed 2012 budget to the board Nov. 8, saying, “… The first question is determine whether or not the 2012 budget needs to be balanced and if so, where should additional cuts be made. Right now, the budget for the general fund stands at a negative $112,000 … The second question: Are necessary projects or services being omitted to achieve even $112,000 deficit and if so, identify specific items that we need to add …”

Furthermore, he said, “… Right now, each department put a salary increase in of 3 percent for everyone and my calculations for the actual salary increase plus the benefit package that is based on a percentage of that will raise the expenses by $140,000 a year …”

But if the board follows the city’s Personnel Manual regarding salary increases, 10 people on the city’s top step would receive $500 pay increases instead of a 3-percent pay hike while the remaining city employees would receive 3-percent salary increases, Hrastich said. That would reduce the amount of budgeted salary increases to roughly $93,000 or $94,000 instead of $140,000, he added.

The city’s department heads reduced their proposed budgets by a total of $492,600, Hrastich said.

“… In preparing the budget, the department heads all got together and they tried to limit the size of their budgets the best they could,” Hrastich said, adding the Public Works Department slashed $383,000, the Parks and Recreation Department cut $76,800 and Public Safety trimmed $32,800.

“… I didn’t believe it was up to the Finance Committee to identify further cuts. It’s up to this board to identify further cuts or agree the budget is going to have a $112,000 overrun …,” he noted.

Haggerty later said he would be inclined to support a salary freeze.

“Tom, if you’re looking for some direction, as I guess as much as we all don’t like to talk about … freezes on compensation, I would lean more toward that at the present time …”

Hrastich said, “Freezes, you say? No salary increase?”

Haggerty said, “No salary increase.”

Fribis said, “I tend to agree with that. I run a business and I know at this time we have salary freezes in my business …”

She added that she did not want to see the city cut services.

Hoffmann later said it was a difficult decision, but given the need to balance the budget she was inclined to agree with Haggerty and Fribis.

“When I worked at the seminary, we had to have our salaries frozen for several years. That’s just a fact of this economy … I hate to say it, but I see that as a way of balancing the budget. I think our employees for the most part are paid well … Hopefully, it will be just for one year.”

At one point, Webb said he still was collecting information in response to questions he had about the proposed budget, “but at this point in time, I’d like to see us try to — at least attempt to try and stick with the policy manual, which I understand will be 3 percent, and make up the difference, which I would equate to right around $60,000 split evenly between public safety and parks …”

Noting that five aldermen — a majority — favored a salary freeze, Hrastich said, “… So we just balanced the budget.”

In a separate matter last week, Mayor Bill Nolan broke a 4-4 board tie to approve a 2011 budget amendment authorizing the expenditure of up to $5,000 for a holiday party to thank all of the volunteers who serve throughout the year on the city’s various committees and commissions.

The city spent $3,700 for last year’s volunteer appreciation party that was attended by more than 200 people.

Those voting in favor of the 2011 budget amendment were Baebler, Hoffmann, Svoboda and Fribis. Aldermen opposed were Haggerty, Hrastich, Webb and Hardy.