Bernard Schoenburg
The State Journal-Register
Most members of the Springfield City Council have worked together to propose an alternative to higher taxes put forth by Mayor Jim Langfelder. The aldermen’s plan released on Monday includes not filling some vacancies; having City Water, Light and Power pay back money the corporate fund gave the utility; and delaying repairs on city buildings.
“It’s no secret that we have a revenue problem, and one approach that’s been put forward by the administration has been to raise four taxes,” said Ward 9 Ald. Jim Donelan. “We believe that there is an opportunity to put some savings forward as well as utilizing some other avenues to not have to raise taxes and also keep the reserves at a respectable level.”
The cuts
Donelan is among seven aldermen quoted in a joint news release issued Monday. Their plan calls for:
* Cutting non-personnel operating lines in the city’s corporate budget by 2 percent, for a savings of $350,000;
* Not filling what Donelan said were nine vacancies and making other reductions for a total of $1.1 million in savings;
* Having CWLP repay the corporate fund $1.3 million; and
* Delaying improvements, including roof work on the Municipal Center complex, totaling $1.1 million.
For the budget year that begins March 1, Langfelder has proposed four tax increases:
* A quarter-cent increase in the city sales tax — from 2.25 percent to 2.5 percent — to generate $3.1 million;
* A 2-percentage point increase in the city’s telecommunications tax, from 4 percent to 6 percent, bringing in $795,067 for the city’s public library;
* A 1 percentage-point increase in the hotel-motel tax to raise about $600,000 to help fund operations at Oak Ridge Cemetery; and
* A new 4 percent city tax on natural gas, which would raise $1.2 million for pensions and equipment purchases.
Other aldermen joining in the plan to cut spending are Chuck Redpath of Ward 1, Herman Senor of Ward 2, Doris Turner of Ward 3, Andrew Proctor of Ward 5 and Joe McMenamin of Ward 7.
Time for CWLP to pay back
McMenamin said one of the current council’s first actions was to divert $4.4 million from the corporate fund, which pays for general city operations, to the electric fund, part of City Water, Light and Power.
The action allowed the utility to maintain its debt coverage ratio and avoid a technical default on its bond covenants, McMenamin said in the release. He adding that since then the utility has made a “dramatic financial turnaround the last two years and is now much more secure with a growing cash position.” He said the utility has “entered into a new coal contract, refinanced its utility debt, renegotiated portions of the wind contracts and restructured utility rates,” all of which mean it is time for the utility to begin repaying the corporate fund.
The aldermen also encourage a slowdown in non-public safety hiring, holding positions open for at least three months; a slowdown of major purchases; and a monthly detailed posting of revenues monthly on the city website.
Monday’s news release was distributed by Council Coordinator Tim Griffin. Donelan said that aldermen met or communicated in small groups — in compliance with the state’s Open Meetings Act — to come up with the plan. He said no more than three aldermen at a time met about the plan, and it was usually groups of two.
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Numbers provided by the mayor’s office show the city initially budgeted for $122.8 million in revenue for the current year but is now projected to the end the year with only $116.6 million in revenue.
The mayor’s proposed revenue for the year beginning March 1 is $124.7 million. Without the tax increases, it would be at an estimated $119 million.
He also said he is “totally against” taking the $1.3 million from CWLP, as he thinks financial moves the city made helped bring a stable bond rating to the utility, and financial underwriters could look at the move as taking the “wrong path.”
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The council is expected to discuss the mayor’s tax proposals at their meeting Tuesday. Langfelder said the budget also will be discussed at the council’s committee of the whole on Feb. 14, and he expects final budget passage could come Feb. 21.
Joe McMenamin for Ward 7 