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Watertown City Council leans toward spending $500,000 from fund balance to offset tax hike

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WATERTOWN — Faced with a 22 percent tax rate increase, the majority of the Watertown City Council informally agreed Monday night to dip into the piggy bank and use $500,000 from the fund balance.

By using just $500,000, the proposed tax rate increase would go down from 22.37 percent to 15.77 percent, according to a May 5 memo to council members.

City Manager Sharon A. Addison and city Comptroller James E. Mills recommended not touching the fund balance at all, cautioning that the city had used too much in previous years and it could be financially risky to do it again.

But council members Teresa R. Macaluso, Stephen A. Jennings and Joseph M. Butler Jr. figured that the $500,000 would not cause too much financial instability for the city’s credit rating to be hurt.

Mayor Jeffrey E. Graham and Councilwoman Roxanne M. Burns suggested taking $1 million to $1.2 million from the approximately $8 million fund balance to offset the tax increase.

Mr. Jennings warned that a big tax increase looks inevitable but necessary.

“We have to steady the ship,” he said after the meeting.

Council members heard that the gloomy financial picture will probably continue next year as health benefits and retirement costs continue to soar. City officials have blamed decreasing sales tax revenues this year for the difficult budget that left the city with a $1.1 million deficit, which accounts for more than half of the tax levy increase.

Only two people attended a public hearing Monday on the $39.9 million budget, which carries a tentative 23.6 percent increase in the tax levy, or the amount to be raised by taxes.

Harris Drive resident Danny M. Francis urged council members to dip into the fund balance even further, saying that senior citizens live on fixed incomes and cannot afford a large tax increase.

“You have to do what’s right for us, the taxpayer,” he said. “I don’t think it’s sustainable, logical and rationale.”

Firefighter Mark W. Jones, president of Watertown Professional Fire Fighters Association Local 191, warned council members that the proposed budget includes a $157,244 increase in overtime costs. He attributed the overtime costs to not hiring any new firefighters since 2012 after several retired.

Despite not hiring any firefighters, the department has responded to 4,149 calls this year, up 27.7 percent from three years ago, he said.

Mr. Jones was joined by 10 fellow firefighters at the meeting because council members have been talking about conducting a study to determine the needs of the department. He wondered whether council members were ready to add staff if the study recommends it, as happened when the last assessment was completed in 2002.

Mr. Jennings contended that the city should hold off purchasing an SUV for $38,000 and replacing a 1986 fire engine pump truck for about $550,000 until the assessment is finished.

Other items in the proposed five-year capital projects program include a major upgrade of the Municipal Ice Arena at the Alex T. Duffy Fairgrounds, at about $6.9 million; the purchase of three buses at $1.2 million, most of which would be reimbursed with federal funding; new restrooms at Thompson Park, for $70,000, and a dump truck for $140,000.

Mr. Mills budgeted $17.4 million in sales tax revenue — a 3 percent increase — in the spending plan.

During the discussion Monday night, Ms. Addison proposed directing about half of the $40,000 allocated to the 1000 Islands International Tourism Council toward an advertising campaign that would specifically focus on city events and tourism destinations. The city would work with the Greater Watertown-North Country Chamber of Commerce on the venture, she said.

Council members held off making a decision on the proposal after asking for more details of what she is proposing.

Council members will meet tonight to talk more about the budget. The session will be at 6 p.m. in the third-floor council chambers at City Hall.

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