The 2013 budget proposed by city Administrator Fred Russell relies on a new local 1 percent excise tax on energy used in manufacturing and a hefty dip into Augusta’s reserves.
Russell recommended Thursday that Augusta Commission members approve the $700 million budget this month to meet a statutory deadline, then amend it if necessary next year when at least three new commissioners take office.
“Some of the issues we face are not going to be resolved in the next 20 days or so,” Russell said. “We’ve got you a budget that will get you into next year, that will allow us to deal with some of those issues at a little more leisurely pace.”
Commissioner Jerry Brigham, who is term limited and leaves office this year, said he agreed with Russell’s plan. “With a guaranteed 30 percent turnover next year, we don’t need to be going into (2013) budget changes. If modifications need to be made, they need to make them,” Brigham said.
The issues involve the uncertain impact of a new state law that eliminated a sales tax on energy used in manufacturing and changed collections of ad valorem taxes on vehicles, according to Russell.
The issues do not include potential costs associated with the new Augusta Convention Center. Russell removed a $500,000 general fund line item for the convention center from the 2013 general fund budget, saying it was no longer necessary.
“We can cover it without general fund dollars, as a result of changes in the contract,” Russell said.
Several commissioners took the lead, bolstered by a highly critical Facebook group, in asking for modifications to the management agreements for the convention center negotiated by Russell and Jim Plunkett, the special outside counsel for the convention center deal.
“You did good with that,” Russell said, and Commissioner Corey Johnson, one of just four commissioners to attend the Thursday work session, thanked him.
The budget Russell said he’ll present for approval Tuesday includes a $750 lump-sum salary adjustment for all employees, rather than a cost-of-living percentage increase. Last year, the commission paid employees a $500 bonus. The lump-sum increases benefit low-paid employees more, he said.
The revised plan Thursday also restored about $165,600 for four new positions in the tax assessor’s office. It added $763,750 in transportation sales-tax dollars designated for Augusta Public Transit, $500,000 from the new excise tax on energy, and $1.25 million in additional property tax revenue that Russell said was made possible by technical advancements in the tax assessor’s office.
“It’s about making people pay the right amount of tax,” Russell said of upgrades to the office’s pictometry system that detect unreported property additions.
The budget includes no property tax increase but predicts a $4.5 million dip into the city’s savings, which Russell said holds about $35 million. Last year’s budget included a similar withdrawal, but the city never actually took the money because it wound up spending less.
Commissioner Wayne Guilfoyle said he was OK with Russell’s proposal but wanted any money removed from the city’s rainy-day fund restored if a surplus occurred.
“If we don’t put the money back, we’re going to get to the point where we lose our bond rating,” Guilfoyle said.
Guilfoyle said the budget made the city’s cost-savings measures – such as a restructuring of departments in 2011 and a switch to a self-funded health insurance pool – appear to be paying off.