Public will get chance to speak about Johnstown budget

PHOTOGRAPHER: Jason Subik

City officials have set Nov. 15 as the public hearing date for the city’s $10.2 million 2011 budget, which raises the city’s tax rate by 3 percent.

Copies of the tentative budget are available for public review at the city clerk’s office.

Under the city’s tentative budget, the property tax rate would increase from $16.36 to $16.85 per thousand dollars of assessed value. The total property tax levy for 2011 would be $4.25 million, up 7 percent from $3.95 million for 2010.

The difference between the rate and levy increase can be attributed to the city’s property tax roll increasing from $241 million to $252 million for 2011. Approximately $8 million of the tax roll increase is due to another 25 percent of the value of the Wal-Mart distribution plant in the city’s industrial park coming onto the tax rolls.

The budget calls for using $200,000 of the city’s approximately $1 million fund balance, its reserve of unspent taxes, to help stabilize the tax increase.

The budget increases spending only slightly, 0.89 percent, up from $10.1 million for the 2010 budget. Although taxes are going up, services will be cut. The plan includes no layoffs but eliminates three positions through attrition, one each from the city’s police, fire and public works departments. The plan also calls for no raises for both the city’s unionized and non-unionized employees, including the mayor and the Common Council.

Freezing the pay for the city’s union workers is only possible because all three of the city’s collective bargaining agreements have expired. State law mandates the provisions of the old contracts remain in place until a new contract is agreed to. The old contracts include some small step raises for certain employees.

The 2011 wage freeze for the unions may not hold up over time, unless the unions agree to it. If the unions don’t agree, a binding arbitration panel could award retroactive raises to the city’s fire and police unions, in which case the city would have to pay the raises which are not budgeted for in the 2011 tentative budget.

Johnstown 2nd Ward Councilman Chris Foss said budgeting no raises for the unions will make it easier for the city to negotiate a smaller raise with the unions. He said if the city had budgeted for a 3 percent raise the unions probably would have demanded it. A 3 percent raise would have also necessitated a much larger tax rate increase.

“It is a bit of a gamble I think, but I think we’re also saying to everybody that times are tough and we just don’t have the money,” he said.

Councilman-at-large Bryan Marcucci said if the unions demand a raise for 2011 it will probably require the city to consider layoffs.

Provisions in the city’s police and fire union contracts make layoffs complicated for either party. Johns-town’s police contract requires at least four police officers to be on duty during every shift. The fire department has a “two in and two out” rule that also effectively requires four on duty at all times.

Acting Police Chief Lt. Mark Gifford said the contract allows any police officer, including the chief, to count toward the four-person minimum. He said currently the city has two 12-hour shifts every day and any layoffs for the force would require him to restructure the department.

Treasurer Mike Gifford said he has cautioned members of the council to consider the pros and cons of the wage freeze gamble. He said the budget plan also defers some of the cost of a major spike in the city’s annual contribution to the state pension fund, which has additional risks.

The tentative budget includes $694,000 in pension contributions but defers another $110,000 in pension costs over 10 years. Spreading out the cost entails a 5 percent annual interest fee and does nothing to reduce next year’s pension costs.

“When we start amortizing pension costs we’re increasing costs in the future. It pushes costs out into the future. The worst case will be if pension costs continue to increase. Then what do you do?” Gifford said.

Public comment on the budget will be allowed at the Common Council’s Nov. 15 meeting at 7 p.m. at city hall.