All road leads to aggressive Greenfield budget plan

Greenfield - A proposed 2012 Greenfield budget that calls for a 2.15 percent property tax hike, mainly to finance an aggressive road program, has preliminary approval and is on its way to a Nov. 15 public hearing.

The Greenfield Common Council Committee of the Whole last week accepted a budget that has a property tax rate of $7.21 per $1,000 of assessed value, 17 cents higher than 2011, or about $34 more than this year for the owner of a home assessed at $200,000 both years.

The total proposed 2012 budget is $48,870,832, up 21 percent from this year mainly because of the road program. The operating budget would be $23,715,134, or 2.78 percent higher than this year's $23,072,958 package.

Road work discounts

Although a new state law keeps the levy increases at a zero unless there is growth in the community, cities can raise their levies to cover debt. That's where the proposed nearly $11 million borrowing for an aggressive road program comes in, an idea that city officials are just starting to consider.

Because interest rates are so low and contractors are willing to give a cost break just to keep crews working, a proposal has been made to lump road spending that is scheduled to be done over the next seven years and do it all in the next two years. Then nothing more would be done until 2015, when the city would again borrow money for those future projects.

On the minds of city officials as they consider the idea is whether people can afford the road plan. It would add about $82 onto the tax bill of an owner of a home assessed at $200,000, the city estimates.

But the city would save an estimated $2 million over the 15-year life of the proposed loan.

Worker compensation change

The budget also takes on a new reality when it comes to employee pay and benefits.

There will be no raises next year for city employees, and even though police and firefighters could have negotiated for raises, they agreed to a pay freeze next year. They also agreed to join other city workers in paying 5.9 percent toward pensions and 12.6 percent of health insurance premiums next year.

Currently, employees pay 9 percent of health premiums with a cap of $130 a month. As of January, in accordance with a new state law, that will rise to 12.6 percent and no cap.

But the city will pay most of the health insurance deductibles, said Ben Granberg, human resources director. The deductibles will be $2,000 for single coverage and $4,000 for families, but the city will help cover that, leaving only about a $200 deductible for those under single coverage and $400 for family deductibles, he said.

No one paid at all toward pensions until August, when employees not covered by union contracts started paying 5.8 percent in accordance with the new state laws affecting public employees, said Milt Vandermeuse, finance director.

There are no furlough days in the proposed 2012 budget, he said, as opposed to this year when there were five. The last one will happen Nov. 11 when the City Hall will be closed. Furloughs are forced days off with no pay.

The proposed budget contains no layoffs but there are some reorganizations taking advantage of attrition, he said.

Less fund balance reliance

It would use substantially less fund balance than previous budgets, Vandermeuse said. Only $320,000 is projected to come from the fund balance compared with $800,000 this year, he said.

But the city has a good-sized fund balance that can be drawn on to keep property taxes in check in hard times, he said. The city tries to keep the fund balance at 25 percent of the operating budget.

The proposed 2012 budget maintains that budgeting conservatively at about 25.5 percent, Vandermeuse said, but by the end of 2012, he anticipated a 27 percent fund balance.

AT A GLANCE

2012 proposed budget: $48,870,832

2011 budget: $40,344,052

Difference: $8,526,780 increase (21 percent)

2012 proposed operating budget: $23,715,134

2011 operating budget: $23,072,958

Difference: $642,176 increase (2.78 percent)

2012 proposed tax levy: $21,409,326

2011 tax levy: $20,959,028

Difference: $450,298 increase (2.15 percent)

NEXT STEP

WHAT: public hearing on proposed 2012 Greenfield city budget

WHEN: 7:15 p.m. Nov. 15

WHERE: Greenfield City Hall, 7325 W. Forest Home Ave.