City’s proposed budget depends on future union concesssions

City Administrator Lori Luther released the executive budget proposed for 2010 that is dependent on city union workers agreeing to a one-year salary freeze for next year.

The Common Council Finance Committee will examine the proposed budget on Tuesday and Thursday evenings in October. The budget originates from the office of Mayor Larry Nelson.

“This is probably the most difficult budget that the city has had to put together,” Nelson said in a late Friday interview.

Negotiating a year of no raises is “the only way to possibly avoid layoffs,” Nelson said.

About 400 union and 100 non-union employees will be asked to take a salary freeze, he said.

To finance the spending side of the budget proposal, the tax rate would increase 12 cents per $1,000 of evaluation – from  $8.83 this year to $8.95 per $1,000 of   assessed valuation in 2010.

The overall tax levy is proposed to increase 6.43%,,  from more than $48.3 million this year to more than $51.4 for next year.

Luther explained part of levy increase was due to paying off more than $1 million in debt.

The city has a $359,063 court settlement to pay to Walgreen’s, a debt created by a dispute on property valuation and subsequent taxes.

Budget planners had to cope with a loss of nearly a million dollars in revenue brought on largely by a $300,000 reduction in state shared revenue, a $300,00 loss in interest income and a $250,000 loss in development related fees.

All city unions are up for contract renewals next year. Luther said a successful negation for a zero wage increase must be negotiated.

“I am cautiously optimistic that negotiations will result in a mutually agreeable solution for a one-year labor agreement given these extraordinary difficult economic times,” she said.

“We have not, however, sat down with the unions to discuss contract proposals” she said, “but will be doing so in the near future.”

Other cost increases are $290,000 in the pension fund and $220,000 in solid waste tipping fees, Luther said.

The total budget proposal, which includes borrowing, dropped from $127 million for 2009 to $119 million for 2010.