Ocean View’s Long-Range Financial Planning Committee (LRFPC) didn’t approve, modify or outright reject even a single line item at the Jan. 3 meeting. But in another way, the committee took a substantial step toward what will one day become this year’s (2007 fiscal year) budget.
Jan. 3 was a day for clearing the air, stepping back to get a fresh look.
For a little background, LRFPC Chair/Council Member Eric Magill once again reiterated his reluctance to deplete the town’s reserves too quickly. The town presently holds in excess of $5 million in reserves. However, even with relatively modest expenditure increases over time, the town staff has calculated those reserves would dwindle rapidly (unless the town moved to raise taxes or fees).
But Magill did cautiously agree with Committee and Council Member Bill Wichmann’s recommendation that the town consider dipping up to 10 percent out of a proposed “Special Project Fund” reserve every year, for projects that might not otherwise make the cut.
However, past that point there were more questions than answers. Committee Member Cliff Mitchell asked whether the Special Project Fund reserves were, by law, restricted to certain uses, or whether they were in fact merely restricted voluntarily, by council.
Committee Member Roy Thomas suggested the town’s problem wasn’t revenues so much as unchecked spending.
“Does it not bother anybody that, according to this, we’ll be paying someone a $37,000 salary but paying $65,000 to give them benefits (by 2012)?” Thomas demanded. “That’s 175 percent (benefits, as a percentage of salary), when the industry standard is 30 percent,” he said. “This is unchecked.”
Thomas also noted a projected increase in public-safety overtime expenses, from the 2007 fiscal year to the 2008 fiscal year, of 50 percent.
“At this rate, I can guarantee you can’t raise enough revenues,” he said. “You can’t have unchecked benefits growth. You can’t have unchecked insurance growth. You can’t have unchecked departmental growth.
“Town council has to come to grips,” Thomas continued. “What do you envision public works to be? What do you envision public safety to be?”
Mitchell echoed the sentiment, suggesting he’d find it easier to prepare a budget if he had some guidance. “Tell me what you want, then I can budget,” he said.
As Thomas noted, Magill had from the very beginning expressed support for budget planning that would make department budgets trend toward less reliance on real estate transfer tax support.
But was the goal 10 percent less reliant, or 20 percent less reliant, or how much less reliant, he asked. And more importantly, while Thomas said he didn’t necessarily disagree with Magill’s fiscal philosophy, he asked if town council as a whole subscribed to the same goals.
He also suggested council might want to set some goals targeting limited year-to-year expenditure growth. “Philosophically, you have to decide what’s reasonable,” he said.
That opened the discussion to what levels of service council, and/or the citizenry, expected from each department, and what the department heads felt was necessary to meet those goals.
According to the U.S. Census, Ocean View’s population grew by nearly 30 percent between 1990 and 2000, and estimates through 2005 bring that up to a little more than a 40 percent increase, so there’s an argument for increased department budgets just to provide the same levels of service.
There was some back and forth there, regarding who should offer guidance first – council, or the department heads. In the end, Magill suggested the LRFPC cancel its Jan. 17 meeting. The next LRFPC meeting was postponed until Jan. 31.
Later that evening, at the regular monthly council meeting, he recommended a special meeting instead for Jan. 17, to give council members a chance to consider the matter.