City postpones budget vote until Monday
Published: Monday, December 5, 2011
Updated: Tuesday, December 6, 2011 05:12
City officials held a public hearing about Newark's proposed operating budget for 2012 at the city council meeting last week.
The budget was presented to council and members of the public, allowing them to ask the finance and city manager's department follow-up questions. City council did not move to approve the budget that night, but instead chose to postpone the vote to the next council meeting on Dec. 12.
Newark City Manager Kyle Sonnenberg said the goal of the budget was to meet their financial goals of maintaining credit, having predictable utility rates and managing costs, amongst other aims.
"We tried to maintain long-term perspective while dealing with short term constraints and that current economic environment," Sonnenberg said.
He said the 2012 budget will increase by less than the rate of inflation, with utility revenues going down as property taxes rise.
However, even with these changes, the majority of the city's income will still come from its utility revenues, which dwarf its property tax revenues by 48 percent.
Sonnenberg said most of the city's costs are contractually obligated personnel wage and pension increases.
"We are a people-based service delivery organization and it is reflected in our costs," he said.
Sonnenberg said he believes budget will be effective, but there are still issues being overlooked.
"We are making progress as far as keeping the infrastructure, but we are not making progress with providing a sufficient cash reserve for the city," he said.
Sonnenberg said cash reserves have steadily dropped since 2004 and will continue to decreasing with next year's budget.
"We have made some progress recently, but with next year's budget the level is expected to drop, which leaves us with a ways to go if we want to reach our goal," he said.
Newark Director of Finance Dennis McFarland said even with the changes in the city's budget, Newark remains competitive when compared to other municipalities in the region. He said the finance department conducted a study comparing the city's rates to other municipalities, such as Wilmington and New Castle, using the income and costs of an average taxpayer.
"For all the services we provide for a typical taxpayer, the city is the lowest cost for these services amongst the other municipalities," McFarland said. "This does not include the reduced utility rates which will be enacted on Jan. 1."
District 2 Councilman Jerry Clifton said he felt troubled by the fact that the budget outlined personnel cuts and property tax increases but did not outline any recuperation of utility write-offs and debts owed to the city by some businesses.
"I just find it very difficult for me to pass along a tax increase when I see issues like that sitting on the table which I actually consider low-hanging fruit that we can go after," Clifton said. "What are we doing to regain the money that is owed to the city and ultimately to the neighbors of the city?"
District 5 Councilman Ezra Temko said he believes increasing costs are a constant problem for any city. He said he also believes it's smart that the city has taken the initiative to invest in infrastructure and create a plan without rates increasing every year for the foreseeable future.
"I would also say that even with financial constraints and a conservative budget, we have here some exciting things going forward into 2012," Temko said.
He said new services, such as the city's new conservation program and building skate spots, should not be forgotten amidst the property tax increase.
"I think that it's exciting that even with the financial difficulties that we continue to face, we are able as a city to continue to move forward and grow," Temko said.