Council Approves $120.8 Million Budget

June 15, 2012
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On time and without much fanfare, the Chelsea City Council completed its review of and unanimously adopted the fiscal year 2013 (FY `13) budget submitted by City Manager Jay Ash.

The $120.8m spending plan is balanced and without any budget-related layoffs for the fiscal year that begins July 1st.

“Public budgeting doesn’t always need to be explosive,” commented City Council President Leo Robinson. “In our process, we maintain yearly attention to what is happening with our budget and are at the table thinking about both revenues and expenses. By the time the budget gets to us, frankly, all the heavy lifting is done. Our goals find their way into the budget and our expectations are most often satisfied with the results.”

Robinson oversaw six hours of budget reviews with all of the City’s department heads prior to calling for a vote on the budget.  He notes that the Council began the budget season months ago, though, reviewing the annual audit from the prior year and examining the City’s health via the annual five-year financial forecast.

“City Manager (Jay) Ash is fond of saying:  ‘All good things come from a balanced budget.’  All of us on the Council agree with that sentiment so we spend a great deal of time during the year, often behind the scenes, investigating this and recommending that. We work in partnership with the City Manager to make sure we’re responsible in both our revenue raising initiatives and what we then choose to spend our precious tax dollars on.  The five-year forecast is especially informative, as it gives us a window into where we are heading and an ability to change the course before we get there, if we need to,” added Robinson.

Ash heaped praise on the Council for all the work it does to help the City balance its budgets.

“The City Council continues to act responsibly, deliberatively and effectively to oversee the City’s finances. While communities around the state and country are wrestling with huge deficits and awful plans to overcome them, we here are plodding along, just fine, meeting our budgetary goals and accomplishing much in the way of bettering our community. In times like these, it’s tough to ask for more,” said Ash.

The FY’13 budget is up 4.9 percent over the FY’12.  Ash reports that of the $5.6 million in increases, $4.9 million  is attributable to required school spending.  Otherwise, the rest of municipal government is seeing an overall budget increase of just $700,000, or just 0.6 percent above spending levels this year.

“It’s always a challenge, but things are getting better in our budget,” said Ash. “Make no mistake about it, there are plenty of problems that could and will come up, but we appear to be in a position to continue to get through them without anything dramatic, like massive layoffs, service reductions or building closings.”

Said Councillor Dan Cortell, “I’m particularly pleased that we continue to find the resources to maintain public safety services, even while some of the grants we have relied upon from Washington are being cut. Not a single layoff, even while funding from other sources is being eliminated; that’s quite an accomplishment in this day and age.”

Ash told Councillors during their public hearing on the budget that public safety positions have been up 13 percent since FY’02, while schools have seen their workforce reduced by 4 percent and the rest of City government is down 33 percent.

“We remain committed to public safety and are finding other ways to address our other municipal needs.  There is some stress in our organization, but we have a great work force that is continuing to persevere and do more with less,” said Ash.

Ash also noted that the budget has certain other stressors, including huge underfunded liabilities for pensions and retiree health insurance costs. He also noted that there are no windfalls on the horizon, so no one should expect any revenue miracles to change the revenue path upon which the City is travelling.

The budget has a small operating deficit of about $950,000, half of what it was last year. Ash said the deficit is covered by reserves and is projected to be totally eliminated over the next three years.

“There really is a plan and we’re following it.  It requires discipline and hard work, every day.  We have to stay to the spending projections we have and be spot on with our economic development and other revenues sources. I wish we had a bottomless treasury from which we could withdraw funds, but we don’t, so we have to continue to be careful and prioritize spending responsibly and do everything we can to encourage growth through economic development,” said Ash.

Two significant features in the FY’13 budget are lower health insurance costs as a result of a new State law which mandated new plans for municipalities like Chelsea, and lower debt service as a result of less borrowing by the City.  Ash was a statewide champion of the former and one of several that have devised a plan for the latter.

“We are purposely borrowing less and instead using fiscal discipline to make annual appropriations to fund projects,” said Councillor Brian Hatleberg, another crafter of the debt reduction plan. “We’re avoiding borrowing and interest costs by having the discipline to pay for our needs as they come up and having the funding available to do so.

“It’s like buying a new car without needing to take out a loan. It’s cheaper in the long-run to be able to do that, but if you don’t have the discipline to save and then buy what you can afford, the strategy can’t work,” he continued.


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