Budget gap may force Saratoga Springs to cut work force

At least two city commissioners said Tuesday that job cuts will be necessary to avoid a nearly 40 percent tax increase next year.

“I’ve already asked the council to come up with some other cuts — whatever they have,” said Ken Ivins, commissioner of finance. “A 40 percent tax increase is totally unacceptable.”

City officials said at Monday’s City Council meeting that the proposed $38.7 million budget — put together after funding requests from departments heads were compiled — would create a $6.5 million shortfall that would require the drastic tax hike.

And with 77 percent of the city’s general fund budget taken up with personnel costs including salaries, benefits and health insurance, layoffs could be the only solution drastic enough to cut enough spending, said Ivins and accounts commissioner John Franck.

“We haven’t made serious cuts,” Ivins said.

The city’s deficit got so high because officials opted to dip into the city’s savings, and also relied on one-time grants to pay for operational expenses, after revenue fell in the middle of this year. They cut spending slightly but essentially put off making big cuts until this fall.

“There’s going to have to be cuts in labor somehow,” Franck said. “It’s not like one of these games where we’re playing tricks with the revenue. The money’s just not there.”

Ivins is required by the city charter to present a comprehensive budget to the City Council and the public at the Oct. 6 meeting. The council must approve a final budget by Nov. 30 or else Ivins’ comprehensive budget becomes law.

But Public Safety Commissioner Ron Kim balked at layoffs and said he will fight cuts in essential services.

He said the city can temporarily solve most of its budget crisis by accepting a bid from Bonacio Construction to develop the city’s parking lot off High Rock Avenue. Bonacio has offered the city a $4.5 million upfront payment in connection with that bid, which would give the city a public safety station and parking garage in exchange for an annual fee.

Kim also wants to see the city stop building its indoor recreation center, encourage senior employees to retire and resolve its union contracts with city employees and require them to pay more for health insurance.

“I’ve got at least 20 people in my department that probably would retire with some kind of nominal incentive,” Kim said.

Kim has criticized Mayor Scott Johnson in the past for Johnson’s handling of the contract negotiations, saying the city is overpaying outside lawyers to do negotiations that the city could effectively do in-house.

Johnson could not be reached for comment Tuesday. Kim is challenging him with a mayoral run this fall.

Other officials disagreed with Kim’s assessment on the parking garage.

“The parking garage, honestly, is not a long-term solution at all,” Ivins said.

Franck said there are still expenses associated with paid parking, such as putting in the system.

Kim said he realizes asking for a vote again on the Bonacio deal is a lost cause.

“It’s one of the things that I’m working on in my campaign. I’m making sure that people are aware of the huge opportunity that the mayor has foregone.”

Most city officials have given up on the hope that the state might restore revenue from video lottery terminals to the city and the county, although they may continue to lobby state officials to return that money.

Ivins said Tuesday he has asked council members to cut their requested budgets where they can. “We’ll see what they bring in.”

Franck said he is hopeful that the comprehensive budget will make substantial cuts.

“In this economy, to go in with a double-digit tax increase, even 10 percent, is going to be a burden to the taxpayers,” he said.

It’s likely the final budget will be passed after the Nov. 3 election, when all the City Council members are up for re-election.

But Franck noted the public will probably have a pretty good idea of what kind of tax increase to expect before the election.

“I think the whole ball game is really going to be when the comprehensive budget comes out in the first meeting in October.”

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