City Officials Banking On Cost-Saving Initiatives
During the last two executive budget rollouts, Jamestown Mayor Sam Teresi has discussed long-term transformational initiatives that could very well be the difference between financial security or bankruptcy for the city.
In October 2016, when Teresi proposed his 2017 budget, he discussed the initiative list in vague terms, only really going into details about a few items.
“Last year, I spoke of restructuring initiatives in noncommittal terms. Last year, I sounded like I was guarding national secrets,” Teresi said. “During the last year, we’ve put into place 14 initiatives that are either now fully implemented, in the process or ready to be proposed.”
One of the initiatives he provided information about last year was the new health insurance program for Medicare eligible retirees, which city officials just approved Monday.
Last year at this time, city officials were banking on being able to rollout the program in the second quarter of this year in hopes of saving $600,000 in health insurance costs during fiscal year 2017. However, because the state Financial Restructuring Board for Local Governments didn’t approve the city’s new health insurance program and the $1.5 million in state funding city officials need to implement the program until later in the year, the council didn’t have an opportunity before Monday to approve the program.
Now with the program in place, city officials are banking that in 2018 they will be able to save $600,000 in health insurance costs if 25-30 percent of retirees who are 65 or older agree to participate in the voluntary program. In the proposed 2018 city budget, it is projected the city will spend $6,564,000 on the city’s self-insured health care program. Around 300 retirees are on the plan, which costs the city government $2.2 million a year, Teresi said.
The current health care benefits for retirees was originally put in place, and largely still in tact, through legally approved and protected collective bargaining agreements with the various city employee unions dating back to 1987.
In January, Teresi first publicly released the long-term transformational initiatives list, which also included items like the proposed annexation of the Jamestown Board of Public Utilities Dow Street substation, LED street and parking ramp lighting programs, Prendergast Library aid restructuring and the city/county police staffing contract.
During the last year, the LED lighting program for parking ramps has been implemented and is expected to save the city in future years $10,000 annually. The LED street lights is about to begin, with the BPU proposing to change more than 900 of the 3,500 plus street lights in the city to more energy efficient fixtures and bulbs. Including the 2018 budget proposal, the city is expected to save $385,000 through the restructuring of aid for the Prendergast Library. If the annexation of the BPU substation decision goes in favor of the city, the BPU will save around $157,232 and the city government will start to receive an additional $78,616 in tax equivalence payments from the BPU.
In August and September, all three municipalities — Ellicott, Falconer and Jamestown — involved in the annexation voted on the proposed annexation, with the city voting that it is in the best public interest while Ellicott and Falconer voting that it is not. The annexation decision will for now be decided by the state Supreme Court Appellate Division in Rochester who will make a ruling on the proposal.
During the rollout of the 2018 budget, Teresi discussed a new initiative aimed at improving capital infrastructure and replacing outdated equipment.
“The new initiative will invest in buildings, infrastructure and equipment. We’re putting together a major program,” Teresi said. “I cannot tell you what the savings will be, it is too early in the progress. We’re going to put together a big enough pool of funding to replace items that need to be replaced. We’re spending time in the repair shop and spending money on repairs, which is a loss of productivity. We’re going to invest in infrastructure so we’re not constantly repairing it.”
In October, during the first budget deliberation meeting Jamestown City Council held with department leaders, city officials heard from Jeff Lehman, city public works director, and John Williams, city parks manager, about the need for new equipment and vehicles. During 2017, city officials had to borrow $400,000 to replace their asphalt paving machine when their 23-year-old asphalt paver bit the dust and would no longer run.
Teresi said the new capital infrastructure and equipment program initiative has the same goal as all 14 transformational measures on the list.
“Every idea has a specific payback and payout. We’re not doing this for the heck of it,” Teresi said. “The old adage is true. Sometimes you have to spend money to save even more money.”
In October, Teresi released his 2018 executive budget, which has a deficit of $946,679. There is also a proposed tax levy increase of $167,712, or 1.1 percent. With the tax levy increase, the city has once again hit its constitutional tax limit of $16,011,982. The constitutional tax limit is the amount of money a municipality can ask its property taxpayers to provide compared to the total assessed property value in the community. The city has a constitutional tax limit of 2 percent of the five-year average of the total assessed property value in the community.
The total budget is $35,724,391, which is a $700,897, or 2 percent, increase. The tax rate will be $23.98 per $1,000 assessed property value, which is a 21-cent increase. Under the executive budget, next year’s spending plan is under the state’s property tax cap.
To view the 2018 executive budget memo, visit the city’s website at jamestownny.net. To view a copy of the budget, visit the offices of the city clerk or mayor at 200 E. Third St. or visit the James Prendergast Library, located at 509 Cherry St.