Budget Update: Passed

Tonight, Council adopted on second reading the FY 17/18 Budget.

The budget approved on first reading was amended as follows:

  1. To retain trash collection of one roll cart per business in the core central downtown business district only.  This is the area from where Garrison Rd. meets Main to Chancellor’s Park Ct. It includes only those businesses that are front-facing on Main, N. Main, S. Main, NE Main, or SE Main.  All other businesses previously receiving city trash pickup will be required to contract for private services.

Here’s my why: The businesses located in the core of the central business district have unique characteristics. This district is characterized by buildings that are located at the front of the property boundary so that only a sidewalk separates the building from the street. They are serviced in the rear by an alley that provides little or no parking because the buildings take up most of the lot. The City has encouraged the maintenance of some of these buildings in their current character and design by an overlay district. Therefore, there is no room for dumpsters that would be required for commercial solid waste pickup. Traffic would be increased in already cramped places where there is already a lot of pedestrian traffic if multiple trash services were collecting solid waste. Therefore, roll a waste container collection should continue to be provided by the city.

2. Retain trash collection services to mobile home parks and duplexes: one roll cart per unit. The only real why here is that these people have always received the service, and many are on limited incomes, and the park owners do not want to contract for services for their residents.

Here are the changes that we made to get there:

  • Charge the Mobile Park Home Owners for the PW fee ($34.00) for each unit within their park.
  • Charge the Duplex Owners for the PW fee ($34.00) for each unit within their parcel.
  • Charge per business the $34.00 PW fee.
  • Decrease Administrative Contingency fund by $30,000.
  • Decrease contribution to General Fund (reserve) by $22,168.

This budget represents one heck of a series of compromises. And I have my reservations about it.  In particular, I am very concerned about the long-term fiscal sustainability of these services.  These changes make this work this year–but next year these same funds aren’t guaranteed.  In my opinion, that’s no way to plan for the future.

But I’ve been calling for better long-term planning, for thinking beyond the current budget cycle, since I got elected.  And we’re not there. Still. I hope we will be by the first Saturday of January 2018 (more on that later).  In the meantime, look for upcoming opportunities to share what’s important to you with councilmembers and the City Administrator.  Because you should help lead the way for this long-term, strategic planning we need to get started.

In the meantime, the budget is DONE.

Read previous posts about the budget here.

Q&A: HP’s + $80k

Another thing recent survey comments has brought to light: there’s some misinformation out there regarding the Heritage Park Amphitheater budget. And I can see how residents might be upset and/or confused regarding this part of the budget.

Take, for example, this comment:

“A large chunk of money has been moved to the Heritage Park account. Until that is explained, I don’t support any increase.”

So I’d like to clear that up: the money for the HP Amphitheatre comes from hospitality/ accommodations tax, which is collected and held in our Special Revenue Fund. City staff indicates an increase in revenue of approx. $99,000 this year. That money must by law be spent on tourism-related expenses. The additional $80,000 in this year’s budget is for the 4th of July event and other qualifying events the city will plan over the course of the year.

One resident offered this advice on the budget:

“Take the money from the 80k in the proposed budget from entertainment…”

That would be great, but let’s be clear: No money from the General Fund goes to any of the HP Amphitheater expenses. None. It all comes from the Special Revenue Fund, and the use of that money is dictated by State law. No money from the Special Revenue Fund can be used on city services like sanitation. So we can’t move that $80k to pay for trash/leaves/brush.

You can read the city’s ordinance regarding hospitality tax here. State law is here.

Returning a Service in a Sustainable Way

In reading some of the comments on the survey, I’ve realized I should clarify our plan for brush collection. The proposed budget provides for the purchase (through a bond) of two new brush collection trucks and provides funds for two new personnel to go along with them. This means that the city will be providing the service—as it did before.

One person asked why we don’t get one brush truck and one leaf truck and alternate them each week, so we can provide both services. And that’s a valid question—one I asked myself. So here’s the thing: we’re planning long-term, not short-term—something the city has absolutely must improve on. We ended up in the situation we were in last year because we pushed our equipment too far, expected too much out of what little we had, for far too long. Simpsonville has simply grown too much for one truck to serve us all. That’s why, you’ll recall, we often waited multiple weeks for pick up. The truck just couldn’t keep up with the volume. And the years of trying took its toll on the equipment. This go round, we’re planning smarter. If we want a sustainable brush service long term, we need two trucks, not one. And we need a plan for maintaining and replacing equipment, so we don’t just drive our equipment into the ground. If we’re going to do it, we need to do it right. Period. Otherwise, a few years down the road, we’ll be right back where we were.

What the Businesses Say…

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In my previous post, I told you that at our public hearing for the budget, several business owners expressed their concerns about eliminating trash services to the downtown businesses who still receive them.

{Years ago, the city of Simpsonville decided to stop commercial trash collection, yet continued to provide the service to approximately 35% of our businesses–primarily those downtown.}

I said in that previous post that their concerns are valid, and I share some of them.  I didn’t specify what those concerns were. So what are they?  The Chamber of Commerce surveyed their members, and 21 replied to the survey.  Allison McGarity of the Chamber summarized their concerns in a letter to Council.

Here’s [part of] what it said:

“After reviewing the survey responses and discussing the matter with business owners, it is clear to me that their disapproval can be attributed to three major areas of concern: the financial burden this decision will place on businesses, the lack of transparency surrounding the process, and the degradation of the City’s appearance.

Understandably, the primary reason for concern is the financial impact on businesses and the long-term increase in the cost of doing business here. Survey respondents reported an average cost increase of $3,600 per year for their business to secure adequate trash removal services. That amount will be a difficult challenge for many of our local small businesses and will tie up capital that could have otherwise been used for salaries, rent payments, etc. These businesses will be forced to pass the expense to their customers by raising the prices of their products and services. In the long-term, that will make Simpsonville a less attractive destination for shopping, eating, and staying. The economic ramifications of this decision will cause Simpsonville to be less business-friendly and could result in the loss of current and future businesses to other communities with more competitive service offerings.

The second reason for concern stems from the manner in which the City distributed notification of this issue. Per the survey results, many respondents did not know about the budget’s impact on trash removal until they received our survey on Monday, June 5, 2017. Many have expressed that the City’s handling of this issue has caused them to lose trust in the City’s leaders, and they do not appreciate the obvious lack of consideration for their interests. Some respondents reported having supported various City projects in recent years, but now feel unappreciated and neglected. The long term implications of these feelings will damage the City’s reputation and perceived integrity.

The final reason for concern has not been discussed as ardently as the first two, but it should be given equal consideration. Currently, the City provides a uniform method for collecting and removing trash from our commercial and residential areas. Each area of the City has one designated pick-up day each week and a designated method for trash to be placed by the roadside for removal. If we part from this regular one-day-per-week system, and turn to the inherently irregular system that will occur when businesses are independently responsible for their trash removal, the appearance of our community will suffer. Instead of having trash carts and bins out in plain sight just once per week, they will now be out in plain sight almost every day of the week in accordance with the various service providers used by each business. Many in this community have worked very hard to improve the appearance of the City and now feel that this issue will degrade their efforts.”

After our public hearing, some business owners approached Council with a solution to retain their trash removal services without sacrificing brush pickup to residents: raise that Public Works fee even higher. We would need to raise that fee by $26, making it $50 in order to achieve this. I want to know what YOU think about paying $50/year instead of $24/year (current Public Works fee). Please read more and submit your thoughts via the survey by going here: http://bit.ly/2roQY6h.

Seeking Resident Input: Fee Increase

wp-1497397545171.Note: There’s a survey for city residents at the bottom of this post. You will be asked for your name and address to verify city residency; however, that information will not be shared publicly.

We’ve been wrangling with the budget for about 6 months now, trying to balance the budget so that our expenses do not exceed our revenues.  City staff worked hard to present options to Council that would would balance the budget while also delivering on priorities Council discussed.

One of these priorities, as expressed by several council members, was a return to brush pickup service similar to what we had before last year’s switch to ACE.  In an ideal world, we would get both leaf and brush pickup; however, doing both was no more feasible this year than it was when we made the difficult decision last year.

Of the two, most of us agreed that the bundling of yard debris is the most burdensome on citizens.  Since September of last year, we heard regularly from residents across the city about the difficulty, frustration, and dissatisfaction resulting from the brush collection requirements.  In response to that, we created a budget that returns that service.  To do that, we will take out a bond (a loan) for equipment.  But you can’t put personnel costs on a bond.  And if you remember from last year, the problem wasn’t just a lack of equipment.  It’s the need for additional personnel to ensure we are able to complete critical work on the sewer.  We moved staff from brush and leaf collection to sewer service for that reason.  So we had to find money in the budget for two more personnel in Public Works in addition to the equipment costs.

We also couldn’t ignore other needs within the city, such as the need for a new City Planner and a new Assistant Fire Chief (read more about that here).

The majority of Council agreed that now is not the time to raise taxes–not without a long term plan for the city. But we are cognizant of the fact that we only have so many ways we can raise revenue. We can raise revenue with taxes or fees.  Since the service we are trying to restore is a Public Works service, staff recommended an increase in the Public Works fee. That recommended increase was $10, which would bring the fee from $24 to $34.  While I prefer no increase, I compromised to this $10 IF it would restore brush collection to the city.  However, we still didn’t have enough revenue to make the budget work. So staff looked for places to cut money.  One recommendation was to eliminate trash removal services to the 35% of city businesses who still receive them. These are primarily the downtown businesses.

Last night at the public hearing for the budget, we heard from a number of downtown business owners who expressed very valid concerns about this proposal, concerns that I and other council members share.  None of us want to see our small, local businesses hurt. We want to encourage growth in downtown.  But…we also want to restore the brush pickup service to our residents.

And it comes down to this: we can’t do both. At least not without raising additional revenue.

One possibility that has been floated is the idea of a larger than originally planned increase to the Public Works fee. If the Public Works fee were raised to $47-$50, we could potentially restore brush pickup and continue trash removal services to our downtown businesses.  That’s a pretty substantial increase from the $24 fee we currently have.  And I worry that there are residents, particularly in Ward 3, who cannot bear that cost.  I wasn’t happy with the $10 increase, but it was a compromise I accepted because I know how vital it is to return that brush service.

So now I ask you for your opinion: Would you support an increase in the Public Works fee that would make that fee somewhere in the ballpark of $50/year?

Please provide your feedback via this brief survey.

The intent of this survey is to solicit feedback from city residents to help inform my decisions.  Thus, you will be asked to provide your name and address to help ensure that responses are from city residents.  

Thank you! 

 

 

 

Budget Update: Option 7

Today Council met for another Budget Wo_20170511_192749rkshop Meeting.  Based on previous feedback from Council, staff put together and presented a compromise that we are commonly referring to as “Option 7.”

Some key points:

  1. Option 7 does not include a millage rate increase.  This was important to me because I cannot justify increasing taxes until we have a long-term plan in place, and we don’t.  As I have said a number of times before, we need to establish a strategic plan. We need to prioritize what’s most important, determine the funding needed to make those things happen, and create a plan for generating the revenue to apply to those goals. If those goals require a tax increase to move the city forward, we can talk about that. But not until we have a plan. Notably, this option does include a $10 Public Works fee increase.  I wanted no increase, but this extra $10/year is what made the brush collection possible (see below).
  2. Option 7 provides funds for 2 new personnel and 2 new trucks for brush collection. This will eliminate the need for bundling brush, which has been a problem for residents since we decided to privatize sanitation services.
  3. Option 7 allows for the hiring of a new Assistant Fire Chief. This is really important because Chief Williams will be retiring in the near future, and we need to begin thinking about the future of the Fire Department when that happens.  Hiring an Assistant Fire Chief will allow us to prepare a successor.  The Assistant Fire Chief position has remained unfilled for years.
  4. Option 7 allows us to hire a Planner I.  This position is critical to the future of the city.  It is the only personnel position we looked at that has a significant ROI.  This year, over 50% of our city revenue will come from activities directly tied to economic development. We project that number could increase to 65% next year.  In order to protect and grow that revenue, we need a Planner. Without protecting and growing revenue, we will never be in a place to budget for all of the other priorities that got cut this year. It was really important to me, as I expressed earlier, that we get this position. (This position is also one that has been left unfilled.  Mr. Knudsen previously held this position and was promoted into Mr. Dyrhaug’s position when Mr. Dyrhaug was promoted to City Administrator by the previous Council.)
  5. Option 7 allows us to purchase limited capital via a Master Lease and a G.O. Bond.  Staff cut the capital expenditures to the very most important ones to create this limited list and decrease our financial obligation, which gave us a little more wiggle room in the budget.
  6. Option 7 offers several previously overlooked opportunities for revenue/cost savings: a) we have reviewed and plan to revise our permitting and other fees (this has not been reexamined for some time).  This will give us an estimated $25,000 extra but allow us to remain competitive with our neighbors.   b) we have reviewed and plan to increase the Public Works fee by $10.  This will net us an additional $76,000. This isn’t ideal in my opinion, but given the alternatives, this fee increase is a compromise I can live with. c) Stop providing door-to-door trash service to mobile home parks.  This will save us $30,000. At first, this may not make sense and may seem like we’re just arbitrarily removing services from a specific  group of residents. But here’s the thing with mobile home parks: they’re businesses–they’re in the business of renting.  And they pay a business license fee as such.  However, the public works fee is assigned based on tax map ID number.  So basically, a mobile home park with 170 homes gets service to all 170 residences despite only paying the fee for one.  Thus, mobile homes should be treated the same way other multi-family dwellings, like apartment complexes, are treated.  And that means they provide their own trash service. d) Eliminate trash service to businesses in the city.  This will net $75,000.  This one gave me a little trouble personally because I want to make sure we’re still business-friendly.  But the logic is sound: we do not provide roll-out cart services to ALL businesses in the city.  Commercial properties are expected to provide their own service. If we even the playing field and treat all businesses the same, it provides consistency as well as a cost savings to the city.  These changes will allow us to afford to purchase the equipment and hire the employees to do brush collection.
  7. Unfortunately, Police Recruitment and Retention didn’t make it into Option 7.  And I really wanted it in there.  I think, as I have said before, it is incredibly important to the future of the city.  If we don’t get it this year, I want it as part of a long-term plan–a plan we need to start working on once we’ve passed this year’s budget.  Because like I’ve said before, this time next year, we need to be better prepared to meet the city’s most critical needs (like police recruitment and retention) in a fiscally responsible and sustainable way.
  8. Like all the options, Option 7 includes a 3% salary increase; 8% health insurance increase; 2% retirement increase; moving $200,000 for infrastructure to be paid from the Sewer Bond; moving $200,000 for Fire Station #5 to be paid from General Fund Balance.

As I said in the meeting, I don’t love Option 7, but I think it represents a compromise–one I can live with, and one the other council members present can too.  We’ll have a public hearing and a first reading at the beginning of June. And then–we need to get to work on a long-term plan. I know other council members, our Administrator, and our Finance Director all agree on that.

Budget Update

Tonight Council met for the last of 3 previously scheduled budget workshop meetings and scheduled an additional 4th meeting for Thursday, May 11th from 3:00-5:00 PM.

Based on discussions in the two previous meetings as well as a number of meetings between City Staff, the City Administrator presented to Council a list of budget cuts as well as 5 options for a budget based on the information provided by Departments and Council.

Here are the highlights:

  • Every budget option includes the following: a 3% salary increase; 8% health insurance increase; 2% retirement increase; moving $200,000 for infrastructure to be paid from the Sewer Bond; moving $200,000 for Fire Station #5 to be paid from General Fund Balance.
  • 4 of the 5 options include a master lease and a General Obligation Bond (loan) to cover capital expenses (such as the proposed leaf and brush trucks).
  • Of the 5 options, 3 result in a negative balance. The most conservative of those puts us $224,305 in the negative. The largest possible deficit would be -$879,023.
  • Only 2 result in a positive balance.
  • The 2 options that do not put us in the negative eliminate the brush/leaves/white goods supplementary service proposed by the other 3.
  • For each option, we were provided with an adjustment based on a proposed tax increase of 3.292 mils. That would net the city an estimated $269,200. With that tax increase calculated in, only 3 options come out in the positive. 2 do not include the equipment and personnel for leaf/brush/white goods pickup.  1 option does provide for that service to be reinstated. That option eliminates any and all other personnel needs and also eliminates nearly half of our capital needs from the budget.  And leaves us in the positive: we’ll have a very tight fit, with a $44, 895 surplus.

Note: I have previously indicated I do not support an increase in fees or taxes.

I have also said on numerous occasions, including in tonight’s meeting, that what we MUST have is a strategic plan–a long-term vision for the future of this city and a [measurable] plan to achieve it over the next 5, 10, 15 years. We still don’t have one. And so here we sit again at budget time making short-term solutions–smacking on Band-aids and hoping for the best.  And that’s just not acceptable.  We have to do better.  Otherwise, we’ll be right back in the same boat next year trying to plug a different set of holes.

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