2013 budget planning
City lowers expectations on income-tax revenue
New Albany's income-tax revenue is expected to dip a little next year, City Manager Joseph Stefanov told City Council on Nov. 13 during a review of the proposed 2013 budget.
Income-tax revenue for the general fund is projected to be $9.5 million next year.
"Our income-tax revenue is expected to be slightly below 2011 (collections)," Stefanov said.
The city collected $9.86 million in income taxes in 2011.
City officials estimated income-tax revenue would be $10.5 million in 2012 but Stefanov said the actual collections will be around $9.5 million.
Councilman Chip Fellows asked about new jobs coming to the city and how that will affect the income-tax revenue.
Stefanov said many of the recently opened large data centers in New Albany do not have a lot of employees. He said the city also shares income-tax revenue with the New Albany-Plain Local School District and New Albany Community Authority, which pays off debt incurred to develop the city's business parks.
Stefanov said the city still is in uncertain financial times and has to be fiscally responsible to maintain services at the current level. Individual departments have cut funding requests for 2013 to reflect the flat income-tax revenue.
Stefanov said City Council also needs to know the state is eliminating the estate tax, which hasn't generated a lot of funds for the city, and potentially could change income-tax laws. New Albany also is home to a few corporate headquarters, which, he said, could be affected by financial instability in Europe and Asia.
"If they have a bad year, we have a bad year," Stefanov said.
Total general-fund revenues for 2013 are estimated at $12.89 million and expenditures are estimated at $12.95 million.
Stefanov offered a few short-term solutions to help close the budget gap.
Although city officials have planned to hire a human-resources director for the past three years, he said, he will delay the hiring again, perhaps contracting for special projects eight hours a week.
He also will cut back on some building maintenance, saying he had hoped to replace most of the carpets in Village Hall, which are becoming worn.
The 2013 budget also was adjusted to reflect salary changes negotiated in the city's first union contract with the Fraternal Order of Police Capital City Lodge No. 9. Because the 2010 census determined New Albany's population exceeded 5,000, allowing the village to become a city, its employees were able to seek union representation.
The three-year contract approved by City Council on May 15 included a 2.5-percent wage increase for 2012, retroactive to Jan. 1. The contract also included a 3-percent increase in 2013 and a 3.5-percent increase in 2014.
The city also budgeted $60,000 for legal fees because its public-service workers have organized with the United Steelworkers of America.
Deputy City Manager Debra Mecozzi said the negotiations are expected to cost less than the 2012 police union negotiations.
Departmental requests for the proposed 2013 budget included:
* The finance department requested funds to purchase new software that will help the three-person department provide better reports to City Council.
Interim Finance Director Vicki McKinney said the system also will allow the city to have paperless purchase orders, with individual departments filing purchase orders electronically.
* The police department requested funds to replace one cruiser.
Police Chief Mark Chaney said the city will not hire a fourth sergeant until the second quarter of 2013 to save money.
The police department also needs to replace a dispatch supervisor who resigned in June, Chaney said.
* The service department has cut its equipment requests, asking to replace one pickup truck instead of two and cutting $50,000 from street improvements to purchase a 1-ton dump truck, said Mark Nemec, the city's service director.
Nemec said the city has two 1-ton dump trucks, but one has a rusted windshield that leaks and the other has rusty floorboards.
* The city also has had to cut funds from the street tree replacement program from $100,000 to $30,000, Stefanov said.
Fellows said City Council needs a report on the number of street trees, specifically ash trees, which need to be replaced in the next year. Nemec said the report should be finished soon.
* Community Development Director Jennifer Chrysler said she has cut vehicle replacement and taken $5,000 out of her marketing budget, leaving $55,000.
Councilman Glyde Marsh questioned taking any funds from marketing the city, saying, "I think you need to go the other way."
Chrysler said the city needs to study its marketing strategy in 2013 and prepare a three- to five-year plan.
"I think we need to sit back and examine what is effective," she said. "Next year has to be a planning year ... so we can determine to invest in the right ways."
Marsh countered, "You can't sit back all year because your competitors are not doing that."
City Council is expected to review the budget again Nov. 27, with an expected vote in December.
City Council also plans to schedule a capital-improvements workshop in January to discuss capital expenditures.