The Auburn City Council heard the first draft of the proposed 2021-22 city budget at its meeting Thursday night, with more discussion anticipated going forward as the municipality faces a budget gap.
The meeting was the first held with the full Auburn City Council at Memorial City Hall in 2021 after months of remote sessions due to the surge of COVID-19 cases after the holidays.
With full in-person meetings the plan going forward, the council will be working on the 2021-22 budget over the next several weeks. On Thursday, members heard a presentation on the first draft from city Comptroller Rachel Jacobs.
The city's general fund under the proposed budget would total $37,932,323, a 3% uptick from the 2020-21 revised budget. The spending would be funded in part through a 3.3% proposed property tax increase, which would stay within the city's state-mandated cap. The proposal also assumes a 3.9% increase in sales tax collections, a revenue source that largely depends on the health of the local economy.
A draft gap in the general fund between anticipated revenue and expenses under the plan totals $1,353,371, but the presentation said the city's fund balance from previous budget surpluses can cover the difference.
Before Jacobs began her presentation, City Manager Jeff Dygert said staff were developing an "austerity budget," as they had last year, and added that there are still "a lot of unknowns" due to the COVID-19 pandemic, including the local economy, since "we still haven't fully gotten back to normal."
"The other unknown that we have is the state budget. While we know that certain funds have been restored and others have (been) increased by this most recent budget, we have not yet been informed of details of that and how that will impact us," he added.
A big driver of expense increases for next fiscal year, according to Jacobs' presentation, is state-mandated pension costs, which are set to go up 25% for the police and fire retirement system and a 11% for the general employee retirement system. The city also currently anticipates health insurance costs to go up by 10% through its current consortium. Councilor Jimmy Giannettino expressed concerns about that increase.
"The whole premise of going to a consortium is to keep that number down," he said. "I think this may require additional conversation."
Dygert said the city continues to talk to city staff members that are part of the consortium and are constantly looking for alternatives. One of the most common suggestions is go to the county consortium, he continued but the city found that "if we were to get into that system, their rates are still higher than ours." Dygert said the city is exploring different possibilities.
In addition to a tax levy increase, the budget presentation also posed the question of some potential fee increases due to budget gaps in other dedicated funds. There are draft gaps for the refuse collection fund and transfer station of $447,000 and $419,000, along with a $388,000 water fund imbalance. The presentations floats the possibility of increasing water, solid waste collection and transfer station fees as ways to help close those gaps.
After the meeting, Councilor Debby McCormick said she personally would like to avoid raising property taxes and hope alternatives can be found to close that gap. She said she believes the city would prefer to avoid increasing property taxes or using the city's fund balance if possible. She praised the efforts of staff with the budget and said she hopes staff and council can find a way to "make something work."
"I don't think anyone wants to see (property taxes get raised), especially this year," McCormick said.
Jacobs noted after the meeting that council's input for the budget, if they would like anything changed, is due at the April 22 meeting, with a final presentation on the total budget set for the April 29 meeting.
Staff writer Kelly Rocheleau can be reached at (315) 282-2243 or email@example.com. Follow him on Twitter @KellyRocheleau.