City leaders start budget talks

Published 12:01 am Sunday, January 8, 2012

On Thursday, the Ironton City Council Finance Committee sat down for the first time to discuss the 2012 budget, which must be in place by March. City leaders warn the budget process is becoming increasingly difficult and cuts will be necessary to make ends meet.

“Our revenues have declined and expenses have continued to increase. This includes fuel, chemicals, equipment and everything else it takes to run the city,” Mayor Rich Blankenship said in his address to the finance committee Thursday evening. “Therefore, the city must budget appropriately to these adjustments and look at every department to determine a workable budget.”

The mayor offered several ideas to cut the budget, as did Finance Director Kristen Martin. Finance committee members had some thoughts of their own.

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“There’s no doubt about it we have to make difficult decisions here, committee member Aaron Bollinger said. “I don’t think anyone in the room has any doubt we can’t keep going the way we’re going. There have got to be changes and they’ve got to be significant and they’ve got to be done as soon as possible.”


Health care

It is an issue other employers know well: The cost of health care continues to rise, making it a necessary but increasingly expensive benefit to provide employees.

Martin recommended the city increase the amount it requires its employees to pay toward health insurance. Right now the city pays 95 percent of the $1.4 million cost of insurance premiums for all employees.

At 95 percent, that means the city pays more than $1.3 million of the health insurance bill. Martin said by raising the employee contribution from 5 to 10 percent, the city could save $70,292 annually.

“The city bid out the health insurance and every bid is higher than what is currently being expensed,” Martin said in her report to the finance committee. And she warned, “Even with a 5 percent increase (in premium costs) the city’s portion would increase almost $67,000.”

Blankenship said bids were opened last week for the health insurance contract three agencies submitted bids. Those three entities have been asked to send representatives to the next finance committee meeting to explain their proposals. That meeting is 5 p.m. Thursday, prior to the regular 6 p.m. city council meeting.


Talking trash

It is a service that seems unique to Ironton: City residents are allowed to dump unwanted items at the city garage and at Rumpke, Inc., in Hamilton Township at no expense to the resident because the city pays the bill. This is in addition to regular household curbside pickup.

Blankenship said he wants to eliminate, or at least modify, this service to prevent the abuse of it and to reduce or eliminate the cost of it. Blankenship said in the last three years, the city has paid $63,702 for this service.

“Why is the entire city paying for a few people’s garbage?” Blankenship asked. “In 1973, when this was passed, the city was booming; the city could afford it. But (now) we as citizens need to take responsibility for this kind of stuff.”

Bollinger pointed out there has long been speculation that a few people take advantage of the city’s generosity and he has heard discussion that some contractors use this free service to haul off debris from residential remodeling and construction work.

“I have no problem eliminating that service,” finance committee chairman Mike Lutz said.

Blankenship said he still wants the city to have free cleanup days in the spring and fall at which time residents can dump unwanted items free of charge at the city’s expense.

“What if people throw things in the alley?” committee member Bob Cleary asked.

“Then we would write them a ticket for littering,” Blankenship replied.

Committee member Kevin Waldo said he has driven through alleys where couches and other large items are just left sitting, often for so long weeds are growing through them.

“If people had some kind of pride,” Waldo lamented.

Blankenship said he is aware some landlords have renters who move out, leaving piles of unwanted items and the landlords refuse to take responsibility for what their former tenants have done, even though the property is their income source and their responsibility.

“Maybe we need to beef up the littering enforcement ordinance,” Bollinger suggested.


Eliminating jobs

Blankenship’s list of suggestions includes at least one job cut: He would like to eliminate the assist finance director’s position.

“The finance department currently has four full-time employees, as well as a part-time employee. This consists of a finance director, assistant finance director, two clerks and a part-time clerk,” Blankenship said in his report to the finance committee. “As the mayor, I do not have an assistant, such as the public service coordinator, that is in the charter. I have taken on that role to save the city money. I do not believe that the finance department should have an assistant director at a cost of approximately $55,000, which includes benefits.”

Martin countered that the part-timer in her office is paid for through an Ironton-Lawrence County Community Action program and does not cost the city any money. She also pointed out that state and federal regulations do not allow the person who prepares some financial documents to sign off on them as well.

“I don’t agree with balancing the budget on one or two positions,” Martin told the committee.

Cleary agreed, saying if something happened to the finance director, the city would have an assistant director who could step in.


The service worker license fee

The city charges an annual fee to businesses that are not located in Ironton but do business in the city, such as roofers and contractors. That fee is $80. Blankenship would like to hike it to $250.

“We have a code enforcement officer who has to drive around town using fuel and time to force some of these contractors to purchase this license,” Blankenship explained. “Often, we have to spend time with the same companies year after year even though they know the rules. A lot of times, contractors start work on Saturdays and Sundays possibly to avoid purchasing this license. This is a low price to pay to conduct business in the city, and I would guess that the contractors spread this cost to the customers over the course of a year.”

Martin said the city issued 80 such permits in 2011. She and Bollinger both said it makes sense to match the size of the fee to the size of the job being done.


Police dispatch

Blankenship said he has heard rumors some council members want to eliminate police dispatch.

He said if this is true he needs to know as soon as possible so he can begin negotiations with the county and inform the police union about the particulars of the matter.

Martin told the committee that the city could save approximately $175,000 if police dispatch jobs were eliminated and the city contracted with Lawrence County 911 to provide dispatching.

Martin pointed out that city residents pay twice for dispatch services: they are assessed a tax that pays for the county’s 911 center and they pay the cost of staffing and supplying an IPD dispatch center as well.

But Police Chief Jim Carey was frank: “Consolidation is not going to happen until the city and the county commission say it will happen,” he said. “It should have been done when 911 was formed.”

He acknowledged this is something that can’t be accomplished overnight.

Carey said the biggest sticking point is the cost. It was his understanding the estimated cost of consolidating the two dispatch centers would be in the neighborhood of $265,000.

“That’s what additional personnel would cost, not the actual consolidation (of equipment),” Carey said when contacted Friday afternoon. Carey said it was his understanding that at one time a previous sheriff had said he would consolidate the city police dispatch with his own at a cost of $80,000 for two additional dispatchers or $40,000 for one.

“But that was a while ago,” Carey said. He pointed out his dispatchers do far more than answer a telephone and even if the dispatch centers merge, he will still need a couple of people to handle other duties now performed by his dispatchers.


Health departments

Martin suggested the city consider merging its health department with the county’s and pointed out both offices are even in the same building.

“The city is currently budgeted to subsidize the health department $112,500,” Martin said in her report.



Martin suggested the city consider eliminating various allowances and incentives given to some employees and use this money for pay raises for all employees. According to her list, the city allots $1,700 a month, or more than $20,000 a year for fire department food. Police officers receive a clothing allowance that costs $33,920 annually. The clothing allowance for firefighters is more than $29,000 a year and for public works employees is $10,500 a year. She pointed out there are also other incentives that might be eliminated, such as a fitness, firearms, first responder and meal ticket incentives for police officers and firefighters.


Put down the pickup?

Ordinarily employees and employers pay a portion of the cost of employees’ retirement contribution. But the city even pays the employees’ “retirement pickup” as well as its own portion

“How much longer can we afford to do that?” Martin asked. She calculated if the employees’ were required to pay even 5 percent of their pickup, it would save more than $190,000.


The full-time engineer

Blankenship said he did not think the city would save money if it had a full time engineer. Right now engineering for municipal projects is contracted out, usually to E.L. Robinson and Associates. But Blankenship said if the council wants to do this, he wants to know now so he can adjust the budget accordingly.


Hiking the payroll tax

Waldo wanted to know if a half-percent increase in the city’s payroll tax would help the city stay in the black. Right now the city has a 1 percent payroll tax. If it were increased a half percent, Waldo asked Martin, “What would that do?” Martin said it would bring in almost $1 million.

“It’s not necessarily the best timing,” Martin admitted.

“How do we compare with Ashland, Portsmouth, Huntington?” Lutz asked. Ashland, Ky., has a payroll tax of 1.5 percent; Portsmouth did have a tax of 1 percent but at the beginning of the year the one percent was increased to 2 percent. As Martin pointed out, Huntington is debating the payroll tax issue at the moment.

Lutz wanted to know what would happen if the city scrapped its payroll tax reciprocity agreement. Right now if an Irontonian works in a city that has its own payroll tax, the Irontonian is assessed only half of the one percent. Martin said ending the reciprocity agreement would bring in a half million dollars annually. Lutz said he would like an analysis of reciprocity and how it affects the city.


In the future

Blankenship said the changes proposed last week are the tip of the iceberg as he and others try to make ends meet in an increasingly difficult spending plan. The finance committee will sit down with department heads to discuss their individual budgets one at a time on Thursdays in the coming months. The city council normally meets the second and fourth Tuesdays for regularly scheduled council meetings.

And Blankenship said he intends to press the matter of money with the city’s three unions, all of whom will be in contract talks with the city this year.

Blankenship said he will negotiate with the unions himself whenever possible to save money.


An invitation to listen

One reason why the city is having budget issues, city officials have said, is the state and federal governments have, over the years, reduced their respective contributions to local governments.

Blankenship told the finance committee he has invited 89th District State Rep. Terry Johnson and U.S. Sixth District Congressman Bill Johnson to attend city finance committee meetings to learn first-hand how small cities are struggling with the effects of a stagnant economy and dwindling resources at a time of ever increasing demand for services.

The mayor said if the men can’t attend, perhaps they can send a representative.