Several last-minute ammendments including a sizeable revenue stream from the BPU and an increased projection for sales tax revenue helped the City Council reduce the tax levy increase to less than 1 percent for 2013.
Following a short work session, the Jamestown City Council moved into an executive session to make last-minute amendments to the budget prior to the public meeting, which saw the 2013 general operating budget for the city unanimously pass. According to councilman Tony Dolce, R-Ward 2, several of the factors that led to the amendments came at the 11th hour.
Following the amendments, the City Council was able to reduce the tax levy increase to .82 percent, down from more than 6 percent when the budget was originally released. The most substantial of these amendments resulted from a resolution that was passed during a board meeting at the BPU on Tuesday afternoon. The resolution authorized payments of $300,000 from the electric division and $120,000 from the water division to be made to the general operating fund of the city in 2013.
According to Mayor Sam Teresi in the past it was a common annual practice to either refund profit money to the city general fund or pay dividends to its taxpayers from the electric division. There is language in the municipal law that allows municipalities that own and operate their own utilities to receive an amount equal to what that utility would pay in all forms of taxation if it were owned by a private sector. There is also companion language in that legislation that allows the municipality to retain some of the profits generated out of operating those utilities. In Tuesday's board meeting, the BPU decided that it will be sharing some of that profit with the City of Jamestown.
"We also saw a decrease in appropriations," said Dolce. "There was an $35,000 reduction in payments for city street lights and a redistribution of workers compensation fees will save the city $175,000. Refinancing the BPU debt from 4 percent to 2 percent saved us another $8,700."
Despite the savings that were made available to the city through their reductions, the closing of the budget gap relied heavily on the increased revenue that the city was able to find, including a $125,000 increase in projected sales tax revenue.
"I'm pleased that we were able to maintain the services that we have and continue the things we do in Jamestown," said Dolce. "It would be nice to come with no increase, but we didn't feel it was necessary to go any further than what we did. We felt pretty comfortable with this. The BPU and the sales tax were the two big tickets in this."
According to councilman Gregory Rabb, D-President, it wasn't easy getting the budget to where it is, but he sees the ability of the City Council to get the tax rate increase down as low as they did as a major accomplishment.
"I'm happy that we were able to deliver tonight's budget," said Rabb. "I know that any tax increase can be objectionable to people, myself included as a taxpayer, but we were able to get it down quite low. There were a lot of discussions, a lot of hard work and we achieved our goal that we set out to achieve."
Rabb is also hopeful that the economy improves during the fourth quarter of this year and moving into 2013.
"We got some really good news on that third quarter sales tax payment," said Rabb. "If economic activity picks up, that changes the dynamics of the budget, too."
Mayor Teresi was also extremely pleased with the outcome of the budget, but is also holding out hope that the economy continues with the current trend.
"The City Council made some tough decisions, they did some good work and I'm very pleased that we were able to bring the levy down to a .82 percent increase and the tax rate down to a .98 percent increase. In this day and time I think that's exactly what the doctor ordered. The revenue lines are real and attainable and I'm satisfied with the cuts. I'm proud of the fact that we were able to do that in a day and age where local governments all over the place are having difficulties keeping their tax levy increases down in the single digits. We're going to have to hope that some things break our way and that the economy continues to improve since we did bump that sales tax number."
The beauty and the genius of the city charter is that they create a deadline where a budget goes into place one way or another," Teresi continued. "We don't go into a new year without a budget."