LOCKPORT — Mayor Mike Tucker’s administration will approach all five city employee unions asking for concessions in health care benefits in order to stave off a double-digit tax rate increase, layoffs or both.

After talking with department heads about their 2012 budget requests the past few weeks, members of the Common Council on Wednesday had their first look at hard numbers — total expenses, income and impact on the tax rate if every department gets what it says it needs to function.

The numbers weren’t pretty.

Even after revaluation, which raised citywide taxable property value to $714 million from $635 million, the preliminary general budget drives a gag-inducing 17 percent increase in the city tax rate.

Turns out the rate-lowering effect of revaluation, trumpeted on every property owner’s change-of-assessment notice this past May, was theoretical only. From this fiscal year to the next, the “savings” will be wiped out by employees’ contractual salary increases, spikes in the employee health insurance and pension tabs and the exhaustion of general fund balance.

The Council will not vote next month on a $23.8 million spending plan, with a $17.50 tax rate attached, that’s for certain. Before and after the required public hearing on the plan, set for 6 p.m. Sept. 28, line cuts will be made across-the board, in nearly every department.

But every $100,000 less spending only knocks 1 percent off the tax rate. Nickel-and-dime cuts in supply, equipment and contractual lines won’t get the tax rate increase close to palatable. To get to a single-digit percentage hike, the Council needs to go at the big-money lines — and none are bigger than the ones reflecting 219 full-time employees’ pay and benefits.



Health spending seen as one ‘controllable’ line item

Average pay raises of 3 to 4.5 percent for nearly all employees are not subject to change, as they were given in writing through 2012 in five union contracts. Fringe benefits — from vacation time, longevity payments and clothing allowances to city-paid health insurance, disability, Social Security and state pension contributions — aren’t much subject to change either, as they’re negotiated with the unions or required by the state.

One of the biggest expected line item increases in the 2012 budget is in medical spending.

In the general fund, which covers all departments except water and sewer, Budget Director Dick Mullaney is penciling in a 15 percent/$600,000 increase, to $4.7 million for insurance for all workers and over 100 retirees. When water and sewer workers and retirees are included, the health tab could rise to $5.9 million.

Fifteen percent over this year’s tab is a ballpark figure only, as Community Blue hasn’t confirmed its 2012 rates to the city yet, Mullaney said.

Mayor Michael Tucker said he is aiming for a meeting with union leaders next week, to ask their consideration of unspecified concessions on the health benefit front. Getting them could knock about $500,000 off the 2012 health insurance tab — and, therefore, 5 percent off the projected tax rate. There’s no greater savings to be had in a single line item.

“We’ve got to get some help from the unions,” Tucker said. “They’ve been pretty gracious over the years ... and I have no doubt we’ll have a good conversation (about health savings). Whether it happens remains to be seen.”

The unions don’t have to agree to any givebacks/benefit reductions, Mullaney observed; their contracts are in place through next year, and any unilateral action by the city to cut health costs would likely be met with legal action by the unions.

In 2012 budget deliberations, the retiring budget director’s constant comment to the Council over the years, “the only thing you really control is the number of people who come to work here,” reverberates loudly.

While most aldermen say job cuts are the last thing they want to consider, 4th Ward Alderman Andrew Chapman argued they can’t afford not to. Personnel is where most of the tax money gets spent.

“Philosophically, I say we go for zero (tax increase) even if that means layoffs,” he said. “It’s our responsibility to keep streamlining and downsizing” city government.

Jack Smith, 2nd Ward alderman, doesn’t believe a zero increase is possible, or wise. Layoffs will put the city on a “slippery slope” to reducing services, he said, especially if they’re in departments whose services are “felt” daily: streets, forestry and building inspection, for example.

If job cuts were to be considered, Smith suggested residents might not notice them as much if they were in the police and fire departments.

That challenging comment got no response from the other alderman, except for an observation by Council President Richelle Pasceri that as they’re engaged in budget cutting, they have to be cognizant of residential “quality of life issues” — including the impact of city spending on perceived luxury items like concert stage rentals and recycling/refuse transition debt service, she hastened to add.



Demands are high and cash supply is low

The perceived and real demands of residents upon City Hall are numerous and conflicting. In this spirited election year, there’s been unhappy talk in Council meetings about housing blight, neglect of Outwater Park, the condition of city streets and, of course, the new refuse collection deal that’s been struck with Modern Disposal. By the end of this year, property owners will start paying a fee for privatized trash collection, on top of their property tax bills.

That the Council OK’d private refuse collection for long-term taxpayer savings — to get the city out of that business and away from the associated employee “legacy” costs including health insurance and pension — seems lost on its critics, some of whom simultaneously bash the program and the tax rate/the cost of city government.

“That’s why we make tough decisions like we did with garbage,” Tucker said. “We get criticized for that, but the reality is we have to change the way the city operates.”

Requests by department heads for money to hire full-time employees — an engineering aide/draftsman to pick up some of the slack since Norm Allen became head of public works, and a housing inspector to increase inspection and code enforcement on all housing types, not just new construction and most deteriorated properties, likely will be rejected. A proposal by Treasurer Mike White to pay him and two treasury employees a combined $20,000 stipend to take over Mullaney’s budget director duties appears headed for rejection too.

In their budget work session Wednesday, nobody even mentioned the new 2 percent tax cap that the state put on local taxing jurisdictions; it can be overridden by a majority vote of the governing board or council and doesn’t seem to be on the aldermens’ radar now.

Alongside personnel demands and rising fixed costs, the Council also is grappling with a 2012 revenue gap in the form of no fund balance. Last year, it appropriated $1.1 million of fund balance, meaning unspent cash, to balance the 2011 budget. There’s no more fund balance to roll into 2012, so year-over-year, essentially, the city starts out $1.1 million in the hole. That amount has to either be cut from spending lines or raised as tax or other non-tax revenue.