After a discussion fraught with obvious frustration, the East Bethel City Council voted unanimously Aug. 21 to postpone its vote to set the city’s 2014 levy and budget.
The frustration stemmed from the fact that the council will have no choice but to dramatically raise city taxes for 2014 in order to make the city’s first debt payments on the municipal utilities project.
Without the debt service payments, the city’s total levy for 2014 would actually have reflected a 0.3 percent decrease at $4,440,742. However, the bond payments that are coming due in 2014 will necessitate a levy increase of up to 17.5 percent over 2013, or $5,230,742.
Councilmember Heidi Moegerle said she wanted the city to at least take a look at whether that preliminary levy could be set lower if the city made further budget cuts of 3 and 7 percent across the board to everything except salaries, police and engineering. She said people are going to be “shell-shocked” and she’d rather do any budget cutting now than wait until later.
The city will have to vote on a final budget and levy in December, and that levy can be less, but not more, than the preliminary one to be adopted by Sept. 15.
Councilmember Robert DeRoche said that the city has already cut all that it can from its budget.
“We’re down three staff from when we [councilmembers] came on board [in 2011],” DeRoche said.
He said he’d rather set the preliminary budget in preparation for the worst-case scenario and the council has from September to December to make any possible cuts.
City Administrator Jack Davis said there are still opportunities for the city to possibly reduce the levy increase. Those opportunities could include the refinancing the city’s 2010 A and B bonds, confirming connections to the utility system in 2014 and help subsidizing the deficit by transferring general fund balances.
Since the city must submit its preliminary 2014 levy and budget to the county by Sept. 15, the council will have to vote on those at either at its regular Sept. 4 meeting or schedule a special meeting.
The council will hold a special meeting Oct. 10 to explain the final budget and levy to city residents, and will also discuss the issue at the annual town hall meeting Nov. 21