The city of Springfield will ask residents to help it find ways to cut spending in the coming months in the face of a projected $930,000 deficit next year.
City commissioners and staff members will select about 12 residents for a blue-ribbon committee, including some business and community leaders. They will examine where cuts could be made to Springfield’s budget and recommend whether the city should ask voters for a tax increase next November.
Springfield leaders discussed the city’s preliminary spending at budget meetings held this week.
The city projects it will collect about $37.9 million in general fund revenues for 2016, including about $28.9 million in income taxes.
But it also estimates it will spend about $38.9 million next year, most of it — $26.4 million — on personnel costs. About $4.8 million of it will be for health insurance.
Springfield might have to reduce services or ask residents for a tax increase to balance its budget in the future, City Manager Jim Bodenmiller said. Commissioners ruled out seeking a levy on the March ballot.
“We will not have a positive budget in 2017 as it’s going,” Bodenmiller said. “We will have to make a lot of tough decisions, not only right now, but also during 2016.”
At the end of this year, the city’s rainy day funds will be about $2.3 million, about 6 percent of its total budget. With the projected deficit, those reserves will fall by the end of next year to about $1.4 million. The city’s unofficial goal is to have reserves of about 10 percent.
The blue-ribbon committee will work over the next two to three months, Bodenmiller said. At the same time, the city will begin to form a levy committee for the November election if it decides to place a tax increase on the ballot. The city hasn’t decided how much money it might seek from voters.
“If we can uncover some things, save some money and reduce some costs, great,” Bodenmiller said. “If not, I think we should work toward something different in the fall.”
The committee must represent a strong cross-section of the community, Mayor Warren Copeland said.
“The whole community needs to feel like our people took a look at it,” he said.
About three quarters of the city’s general fund costs are safety services, including police, fire and the municipal court. Residents often say that’s where the budget should be cut, Copeland said. But the Springfield’s charter mandates minimum staffing for the police and fire divisions.
“The answer is: We can’t do that. The people voted for those minimum staffing,” Copeland said. “That’s a part of the communication and education that needs to happen.”
He believes residents want to keep the same level of services in those areas. The voters will be the ones to decide if the city can cut safety services, he said.
“Everything that we need done requires a vote of the people, to increase revenue or reduce our safety forces,” Commissioner Kevin O’Neill said.
The city should also do a better job of marketing itself, Commissioner Joyce Chilton said. She wants the committee to discuss ways to improve that.
A survey of residents could gauge what’s supported by residents, Commissioner Dan Martin said.
Springfield’s budget had projected it would bring in $32.2 million in income taxes, but now it’s more likely it will get $31.2 million by the end of the year.
The city has budgeted about a 3 percent increase in income taxes next year at $32.1 million. Some of Springfield’s top employers have done well this year, Springfield Finance Director Mark Beckdahl said, while other smaller employers have struggled, making the projection a challenge.
“We’ve got a number that may be a little bit aggressive, but it’s doable,” Beckdahl said.
The city has recently lost about $3 million in annual revenue from the state through cuts to the local government fund and the elimination of the estate tax, among others. It’s also expected to lose more revenue from changes to the municipal income tax code, which will fully come into effect in 2017.
“If it weren’t for those cuts … we would be in solid shape financially,” Bodenmiller said. “Sorry if you’re tired of hearing that, but I always feel like I have to repeat it because that’s what’s got us into the trouble we’re in. The state balanced its budget a couple years ago on the backs of the locals. It’s very frustrating.”
The proposed budget for next year calls for 568 full-time employees, down from 700 about 10 years ago. The police division will have 124 employees, while the fire/rescue division will have 127.
Union workers will receive 2-percent wage increases next year, but raises for non-union employees aren’t included in the preliminary budget. The city will also likely increase costs workers pay for health insurance, Bodenmiller said.
Springfield residents may also see increased sewer and stormwater rates over the next three years to pay for the combined sewer overflow project. The Environmental Protection Agency has required the city to reduce the flow of raw sewage into local waterways.
Sewer rates for the average customer could go from about $32 to about $40 a month over three years. The monthly stormwater rates are expected to go up about 65 cents for an average household.
The city recently spent about $52 million on a project at the Wastewater Treatment Plant, which was completed earlier this year. Sewer and stormwater rates were last raised in early 2014.
The National Trail Parks and Recreation District is expected to receive an extra $150,000 to break even this year, bringing its total from the general fund subsidy to $1.1 million for this year. The district was projected to receive about $950,000 this year.
Next year, the district will receive about $900,000, which includes $650,000 from the general fund and $250,000 from the stormwater fund.
“They’re taking care of maintaining one of our largest stormwater areas in Snyder Park and Buck Creek,” Bodenmiller said. “It helps the general fund a little bit.”