City eyes restructuring, service cuts

With the economy lagging and the state treasury bare, City Hall is growing increasingly worried about how it can cope with an expected shortfall of more than $8 million heading into the next fiscal year.
“Restructuring is going to be the key,” said Finance Chairman Rich Miecznikowski.
Officials said they’re left with no choice except to search out ways to pare services and revise the way the city operates in hopes of saving money. The alternative is a massive property tax hike that would squeeze already hard-pressed taxpayers.
The issue is likely to become one of the hot topics on this fall’s campaign trail as candidates lay out their own agendas for reducing spending and holding the line on taxes during the toughest economy the city’s seen in decades.
“These are big numbers,” City Comptroller Glenn Klocko said. “We have a monumental task ahead of us.”
John Smith, a finance commissioner, said the city needs to “get aggressive” about trimming spending on its employee health care tab and utility expenses.
“We have to save every dollar we can,” Smith said.
Cheryl Thibeault, another finance commissioner, said the city also needs to do more to hold down overtime spending.
Though finance officials say the city will likely manage to end up with a small surplus during the fiscal year that ends next June, the following year appears especially dire.
This year, officials drained cash from every available fund, tapped $2.5 million from the rainy day fund and squeezed budget requests to deliver a property tax freeze aimed in part at helping residents who got clobbered by the economy.
Next time around, though, the accounts will have been depleted and there won’t be excess to use in the rainy day fund, officials, creating a $2 million gap right off the top because that source of revenue won’t be available.
Adding to the fiscal hole are expected increases in health care, salaries, utilities and the necessity of buying equipment and material that got shelved during this year’s budget process.
There’s also growing concern that state funding, which covers a large part of the budget, especially in education, may fall short.
“I have no confidence the state’s going to fund us like they should,” Smith said.
Klocko said that departmental budgets this year are “pretty lean” because of the efforts made to hold the line on spending.
That makes it hard to clamp down on them more, he said.
Yet the only way to hold off a major tax hike next year, officials said, is to reduce spending.
“It’s gotta be a restructuring,” Klocko said. “We’ve got to have a long-term strategy.”
For now, at least, there isn’t one.

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Copyright 2009. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com