City Beat: Council opposes overlooked pension fund property tax

City Manager Bob Cumley presented possibilities for budget cuts and new revenue to council during an April 14 budget workshop.

Proposed budget cuts totaling roughly $5.2 million are needed for the city to make the actuary-recommended $12.5 million contribution to the Police and Fire Pension Fund.

Many of the cuts are similar to what Cumley’s office recommended as a starting point in mid-March, including reductions of about $400,000 to outside agencies and $300,000 in outside legal fees.

One potential source of new revenue in the latest proposal is a little-known city ordinance that would allow council to levy a property tax of 1.5 cents per $100 of assessed value, with proceeds earmarked for the pension fund. That tax – which would add about $4.28 to the annual property tax bill on a $150,000 home – would raise an estimated $365,000.

Council members, however, decided at their April 15 luncheon not to pursue the property tax – partly because they may need to ask voters to approve a sales tax increase to help solve the long-term pension fund shortfall.

“I think the best way to go would be to get the support of the people,” Councilwoman Mary Collette said. “We’re looking at not just the possibility, but the reality, of having to ask for a half-cent or whole-cent sales tax increase in the near future, and I’d really want … the good will of the people behind us.”

The most significant change to the March proposal is the reduction in staff. The original proposal recommended cutting 22.4 full-time equivalents from city payrolls, including eight in Public Works and five in the Fire Department. Those cuts, all through attrition, would save nearly $1.2 million.

The new proposal adds 20 Police officers, also cut through attrition, making total savings more than $2.1 million.

Springfield Police Chief Lynn Rowe said he thinks the cuts, if spread properly across the department, can be made with little to no effect on public safety; he said the department typically runs about 15 officers below its budgeted strength.

“(We’re) assuming our share of the ownership of the problems that we share, and by we, I mean the whole city,” Rowe told council. “Much of the budget shortfall is the Police and Fire Pension Fund, and we surely understand that.”

Also new on the list is $100,000 in potential revenue from a proposed fee charged by the Fire Department to provide emergency medical services, as well as $73,000 from a proposed restaurant inspection fee.

Council’s next task is to decide how to use that $173,000, along with $500,000 set aside to pay a potential liability in a lawsuit about firefighter overtime, which has been settled.

Mayor Tom Carlson instructed council members to have their recommendations to the city manager’s office no later than April 17, as city staff is on a tight schedule to prepare the final budget for council approval before the new fiscal year begins July 1.