The city of Springfield approved a more than $43 million budget for next year, which includes a surplus for the first time in eight years due to a recently approved income tax increase.
However, one outgoing city commissioner believes Springfield leaders must begin examining cuts and cost saving measures to avoid asking voters to renew the tax increase.
Springfield is expected to collect about $43.1 million in general fund revenue next year, including $33.9 million in income taxes. The city is projected to spend about $42.6 million, leaving a projected surplus of about $520,000 next year.
Springfield voters recently approved an income tax increase that will generate about $6.7 million annually. Without the new revenue, the city was facing being placed under fiscal emergency from the state, local leaders said.
The city is also projected to have a surplus of about $1.3 million at the end of this year — a year after projecting a deficit of nearly $850,000.
Outgoing commissioner Dan Martin voted for the budget, but spoke out about several concerns, including a lack of cost reduction and saving effort, he said.
Last year, both the Community Financial Advisory Committee and an independent consultant presented reports that said the city must find ways to make cost reductions and cost savings, Dan Martin said. The income tax increase approved last year is basically a loan from the voters, he said.
“In three to four years, it’s very likely we could be back in the same position we were in last year without addressing the other end of the equation that we told voters we would and that’s to also look at new ways of saving money, consolidating, coming up with other ways of doing things,” Martin said.
The commission must address those moving forward, he said.
“Four or five years from now, people will be asking those questions of what happened to doing things that were recommended in those reports,” Martin said.
Commissioner Kevin O’Neill has voted no on multiple budgets over the years, including last December. This year, however, he said “it was hard to throw cold water” on this budget because it was balanced.
However, the city must look at cuts, but he doesn’t believe it’s the right time, O’Neill said.
O’Neill views the tax increase as a grant because it doesn’t have to be paid back. Residents will take the money away if the city doesn’t follow through with its promises, he said.
“It’s going to be in the forecast,” he said. “I have two more years here. I’m going to see that all of the things I recommended before are brought up again.”
The commission must continue to find ways to save money because it doesn’t want to ask voters to renew the .4-percent income tax increase approved earlier this year, Commissioner Joyce Chilton said. She wants the commission to discuss those issues at its upcoming retreat in February.
The city has every intention of following the recommendations that make sense, City Manager Jim Bodenmiller said. The process has already begun in some instances, including leasing equipment, examining a wellness program for employees and contracting certain maintenance services.
“It’s only been six months since the levy passed,” Bodenmiller said. “We’ve done a hell of a lot in six months. We’re on track and we’ve kept every promise we’ve made during the levy campaign. We’re going full force. You can’t expect to change the course we were on for 10 years in six months. … We should be proud of what we’re doing and we should be proud of our employees as well.”
Springfield is expected to spend about $28.4 million on personnel next year, the largest expenditure in its general fund. The city is also expected to spend about $5.6 million on medical insurance, a 12 percent increase from the previous year.
The budget includes raises for employees, Bodenmiller told the News-Sun last month. It’s currently in negotiations with five of its six unions, he said.
The city recently gave raises to its AFSCME units, including 3 percent raises this year and a 2 percent increase next year. Those employees also agreed to pay an increased share of health-care costs, Bodenmiller said.
Some employees have gone eight years with virtually no increase, Bodenmiller said, which the recent performance audit said isn’t sustainable.
The city plans to hire 11 new positions as part of the preliminary budget, including seven new police officers to kick-start the Safe Streets Task Force.
Other positions to be hired include several that were recently scaled back, such as a payroll officer, an income tax account clerk, a code enforcement officer and a communications officer.
The city will spend about $5.4 million to make capital improvements, including $2 million for neighborhood streets pledged as part of the income tax increase, Bodenmiller said.
At the end of last year, the city was projected to have rainy day reserves of about $1.39 million, or about 3.5 percent of its overall budget. With the increased income tax, the rainy day fund is projected to be about $4.2 million at the end of 2018, which is nearly 10 percent of the budget.
The commission’s goal is to have about 10 percent set aside but a recent performance audit said the city’s rainy day fund should sit at about 16 to 17 percent, Bodenmiller said.
2017 BUDGET TIMELINE
Staying with the story
The Springfield News-Sun has written extensively about the city’s budget issues and the recent income tax increase, including stories digging into a performance audit and its plan for how to spend the tax increase.
By the numbers
$43.1 million: Springfield’s projected revenue in 2018.
$42.6 million: Springfield’s projected expenditures in 2018.
$520,000: Projected surplus at the end of next year.