City of Struthers Community News

Mayor's Report

March 23, 2005

2005 Budget
The 2005 budget is balanced to the extent it accurately reflects the unencumbered funds available for 2005. Once again, a conservative estimate of receipts was used to prepare the 2005 Budget in anticipation of revenues remaining flat and possible reductions in State and Federal funding. The emphasis of the 2005 Budget is on protecting current levels of service and operations. The proposed budget contains no increases in wages or salaries, except as provided by ordinance or contract.

In summary, the 2005 General Fund of $3,629,237 is $215,166 dollars less than the 2004 Amended Budget. The total 2005 Budget of $6,875,564 is $389,000 less than 2004.

Major changes in the budgetary approach used and areas of change are:

Various categories of General Fund appropriations have been reduced by approximately $80,000 and addressed by transfers from other available sources. In the past, we restricted the practice and were able to reserve those sources as part of our ending balance for the year.

Six hundred thousand dollars has been appropriated for 2005 General Fund health care costs, 7-C. Significant appropriations for health care are also reflected in the SDO and Street Budgets. This was the single biggest contributor to the financial difficulties experienced in 2004 and continues to pose a threat to maintaining operational levels. Hopefully, the Health Care Containment Committee’s actions will be successful in managing those costs the new plan year to begin April 2005 reducing the amount that will be needed.

I&S categories have been reduced and a separate line item created for communication services. This should save considerable time in processing bills for communication services. In addition, it is anticipated we can reduce material/supply and repair costs by approximately $15,000 though changes in purchasing procedures and performing more maintenance/repair in-house.

The budget also attempts to address staffing in the police and fire departments effective various dates.

Appropriates an additional $32,748 toward the unencumbered fourth quarter 2004 police and fire pension obligations.

Addresses upgrading computer software in the Tax Department.

Reflects a $40,000 increase in State & County Auditor fees for 2005 due to the fact the State Auditor will be conducting the regular audit of 2003 and 2004.

Unfortunately, the Capital Improvement category was reduced to address the anticipated cost of health care.

The Sewage Disposal Operating Budget of $2,506,772 is $117,108 higher than 2004 and reflects the increase for health care and wages set for 2005 by ordinance. Septage disposal fees, testing fees and permits have become a significant source of receipts.

The Street Department Budget of $419,088 is $54,000 higher than 2004 due to increased gas tax receipts. As with the General Fund and SDO budgets, it reflects increased health care cost and wages for 2005 set by ordinance. Unlike past years, the General Fund does not subsidize the Street Department Budget. Street Department personnel are also doing more repair work in-house to help reduce operational costs.

With regard to funding for street improvements/capital equipment, approximately $84,000 is available in the Permissive Auto Tax Fund. Barring any unforeseen emergencies and coupled with the $20,000 appropriated for improvements in the General Fund and else where in the budget for other operations, we should be able to address the most needed improvements.

Once again, we find ourselves faced with the challenges of maintaining adequate operational and service levels and financial stability in the face of economic uncertainties. I am cautiously optimistic income tax receipts will rebound somewhat in 2005. By continuing to use conservative estimates of receipts and operating accordingly we can remain financially sound. However, proposed cuts at the state and federal levels of funding for local government programs, if enacted, remain a real threat unless we see an increase in local revenue and adequately address health care costs.

Health Care Containment Committee
The nine-member Health Care Committee has been working diligently to address heath care costs. As a member of the committee, I can say no option has been overlooked in an attempt to address this very difficult and complex issue. Individually and collectively the members have spent countless hours seeking information and weighing alternatives. Whatever the outcome, I respect their efforts and contribution in attempting to address the matter.