LS City Council Considers $200M FY 19 Budget

By Leilani Haywood
Tribune Reporter

The LS City Council held a closed session on June 14, 2018, to discuss collective bargaining agreements and salaries for 2019 with the Fraternal Order of Police, International Association of Fire Fighters and the International Association of Machinists. At its June 7 meeting, LS City Manager Steve Arbo’s proposed $200 million budget for the fiscal year 2019 cleared its first hurdle. The proposed budget is an $18 million drop from the fiscal year 2018 because of completed capital improvement projects.

Mayor Bill Baird led the five-hour council meeting with Councilmembers Rob Binney, Craig Faith, Trish Carlyle, Bob Johnson, and Diane Forte. Mayor Pro Tem Beto Lopez, Councilmembers Fred DeMoro, and Phyllis Edson were absent. During the meeting, Johnson who is also the chairman of the Finance and Budget committee proposed several amendments to the budget. His amendment to raise projected sales tax revenue from two percent to three-and-a-half percent and increase the pool of funds for wage increases from $1.4 million to $1.6 million was adopted.

However, Johnson’s amendment to limit the Business and Industry Fund expenditures to what’s raised failed. The amendment would also eliminate revenue from general funds going forward. Specifically, Johnson was concerned about the $60,000 from the general revenue fund going towards the Downtown Main Street Association which also receives funds from the community improvement district. “How many times does this entity get public money?” Johnson asked.

“In the big picture of this I think it’s fine for your question to these things,” said Mayor Baird. “As council member Forte said, we need an overall plan with our public service agreements before putting some of them at risk of not receiving funding. I’m all about what the return on investment and what do they really need. We need more information.”
Baird added, “I have to say I would vote no as mayor. I probably would not support the motion. But I do support the merits of what you’re saying.” Councilwoman Carlyle agreed with Baird saying, “I could completely support this motion if it wouldn’t limit the balance as well. I believe we should not spend more than we should make. If there is a balance in this fund I don’t see why we couldn’t spend it.” Johnson withdrew that motion.

Johnson also moved to amend the budget to raise the pool of funds for raises from $1.4 million to $1.6 million. Forte moved to forward the budget as amended and Carlyle seconded the motion. “One of more challenging matters we’ve been dealing with over for last 12 months is to address compensation and benefits for our employees,” Arbo said during his presentation. “We set aside $2 million for some form of wage adjustments. In September the city council approved a two percent wage increase for the non-represented employee base which was $400,000. That dropped the $2 million set aside to $1.6 million.”

The proposed the fiscal year 2019 budget includes $47 million for wages, benefits, and salaries for 778 full-time employees. The primary revenue sources for the city’s budget includes property tax, sales tax, and franchise tax. LS Assistant City Manager Mark Dunning said revenue from the franchise tax is decreasing. The franchise tax is based on taxes from natural gas, telephone, electric, and cable TV. Dunning is projecting a $400,000 revenue shortfall from the franchise tax. “(The use of) Natural gas and electric are dependent on weather,” Dunning said. “When you look at the trend with cable and tv, that trend is not a good one.”

Dunning reviewed several funding challenges such as the shortfall with billing for emergency medical services. Currently, the city is projecting collecting 49 percent of $7.25 million billed for EMS. Another challenge is the unfunded $1.3 million requested for expansion. Among other things, the unfunded request includes $343,000 for six communication specialists for the fire department, a $375,000 rate study for storm water utility and $110,000 for a building inspector.