Imker: Just straight talk on PTC budget

Peachtree City has about a $25 million annual budget. Of this, $12 million is for police and fire/EMS, $3 million for public works, $4 million for recreation (including library) and $4 million for everything else (finance/purchasing, engineering, planning, zoning, code enforcement, court, IT, public relations, HR, etc.) Please excuse the rough numbers as they are for discussion purposes only.

Some of you just added those numbers up, and it only came to $23 million. The rest is debt payment.

One way or another City Council is going to solve a $1.2 million budget shortfall problem in FY2011. Many of you will find that number huge in comparison to the total operating budget. I agree. Now for the killer.

What most of you don’t realize is that we have a near $20 million shortfall in the next five fiscal years. That’s not the city’s budget each year, that’s the city shortfall.

In fiscal year 2014 we’re looking at not a $1.2 million problem but a $6 million problem. Hopefully now you see why I’ve been so adamant about our city’s fiscal policy.

There’s plenty of blame to go around and we must understand we will NEVER EVER again make the mistakes of the past. During retreat, it was shown the genesis of this problem started well before the economic downturn.

The financial policy put in place was ill-conceived; however, it was executed extremely well. Every single dollar was spent. “True” revenues did not match up with expenditures. Special purpose revenue money was used to “balance the general fund budget” when it shouldn’t have.

Allow me to give you some assumptions about the shortfall.

(1) A decrease in value in the tax digest next year. For most of us, this means the value of your home and thereby your taxes paid. For FY 2012 the estimate is 0% change, in FY 2013 it’s 0.5 percent increase, etc. I find these appropriately conservative on which to base future revenue.

(2) No department increases in budgets or pay raises in FY2011, 3 percent increase in FY2012, 4 percent in FY2013, etc. Again, this expenditure profile seems to be appropriate right now. Of course things change but we’re using these numbers as starting points.

(3) City debt payments will average about $2.5 million for each of the next five fiscal years. These three points, greatly simplified, account for perhaps 90 percent of the budget modeling concept.

We have a near impossible task of solving the out-year budgets. We cannot continue business as usual.

Of course, no one is going to recommend eliminating an entire department. We’re not going to ask city employees to work for nothing, either.

However, we can ask expenditures be slowed. We can ask employees to understand the economic environment everyone else is living in and ask they not be immune. We can do something about the revenue side in a major way.

If we take into account the $500,000 reductions we’ve already approved this year and solve the $1.2 million next year, we’ll save millions in the out-years.

Being on City Council means making decisions that won’t endear yourself to city employees because, like a business, dire financial situations means making hard decisions.

I am not going to balance the budget on the backs of city employees. But I will ask they accept the economic situation the entire country is in and not ask to be excluded from certain cuts.

One sensitive issue is that of furloughs. It’s being used all around the country to get by until the economy recovers. Furloughs would not delay any services if done properly.

I agree it’s equivalent to a pay cut. Asking furlough(s) equivalent to a 1 percent pay cut is clearly not unreasonable in this economic environment.

Employees need to ask themselves this: When raises come back, do you want that raise based on a pay cut or on their current pay rate? There is a difference. An actual pay cut starts their raise from a lower base value. The furlough method starts at their current rate. I’m not trying to be affable, but realistic.

Allow me to briefly address the morale argument. Why don’t we consider the morale of the 1,000-plus people living in PTC who are unemployed right now? Or the thousands who have taken a pay cut?

Why is it that only government employees’ morale is discussed and not the morale of citizens who are unemployed or have taken pay cuts while seeing the government employees asking for raises?

Sure, I had a hike in my medical insurance rate this year. I had one last year. There will be one next year too. So did everybody else in the work force. Please tell me what makes government employees so special they are immune to what’s going on around us, whereas commercial businesses are not.

For those who are going to nitpick and say I don’t value the city employees, please don’t. Of course I value them. I sometimes see them working all hours of the night at City Hall. I see them cleaning bathrooms at our parks. I’ve talked one-on-one with many of them and they truly enjoy their jobs. I totally respect the hard work they do for the sometimes seemingly low pay.

Of course some will pick on the top 10 percent of paid employees and ask how do they get such pay? They’ve earned it through decades of dedicated service. I understand.

My own personal experiences have taught me many lessons. I worked until midnight (and beyond) many times. I wasn’t paid extra for it. I enjoyed my job. Not once did I ever think, “I’m not getting paid enough. I’m irreplaceable.”

I went to work every single day knowing my boss could easily say, “Eric, I’m sorry, we have to let you go.” (I’m sure at least one citizen will editorialize on that about me.) I had to tell employees on more than one occasion they were being let go.

Of course it’s hard to do. But sometimes you’ve got to do it. I was grateful to have a job, let alone ask for a pay raise when I knew I could be replaced.

I am aware about paying extra for medical insurance or extra for gas or extra for anything else. If necessary, I’d do what I would need to do to keep my family together. That’s what it’s all about, isn’t it?

I mentioned retirement benefits in my list of cost saving ideas. How is it that Peachtree City full-time employees get TWO retirement plans?

1. A defined benefit plan (i.e., reaching a certain age with a minimum number of years service that calculates to monthly retirement pay. I’ve researched our city’s program and believe it to be very lean for its kind. But it’s got to go for future employees.)

Employees also are entitled to, at the same time as the defined benefit above:

2. A city-paid contribution to their 401k plans (for those lucky enough to be making wages that allow them to save extra each month.) This costs our citizens more than $400 a day, every single day of the year for this benefit.

I’ve NEVER heard of a business giving both to their employees at the same time. Please don’t tell me the 401k is to keep employees from leaving or to encourage people to apply for city jobs.

Current employees need to choose one and only one of the two plans mentioned above. Future employees need to go on the contribution-based plan. Our citizens will thank us 30 years from now.

There you have it; temporary furloughs and a choice of retirement plans. This is not balancing the budget on the backs of the employees.

It’s easy to be the nice guy and say how you’re going to protect employees and their benefits and how you’re going to “keep your campaign promises,” no matter what.

Well, I’m keeping my promise to try and get this city back to fiscal responsibility. If it means being the bad guy, so be it. I’m trying to be pragmatic, doing what’s right for the city.

Now for the revenue side of the equation. Of course it would be nice to have all the commercial and industrial zoned areas filled and whistling away. Realty check time again. We’re doing whatever we can to fill them by making Peachtree City the most desirable place to set up business.

Succumbing to a millage tax increase before implementing alternatives is a disservice to the citizens. Using city reserves is not solving the problem. We’re all aware of the ill-conceived SPLOST from last year.

During the campaign I said, (and I was the only one to say this), we can reject this awful SPLOST now (mainly because of the wasteful and unneeded bypass at this time) and come back next year with a valid SPLOST that truly helps the county and the cities.

The idea of a DEDICATED debt reduction SPLOST is the best solution for eliminating nearly $13M of budget shortfall for the next five years. This would go a long way to solving our out-year budget problem – permanently.

This would require future councils to maintain fiscal discipline. A long shot, I know, but fortunately we have an election every two years.

No sugar coating. Tough choices indeed. I will not ignore the future of this city and pass along this budget problem to the next council. It needs to be addressed now without fear of political consequences. A dedicated debt reduction SPLOST is a must.

All of us on City Council want what’s best for the city. Our personal aspirations are not a factor. I’m extremely pleased to be on a council with those who are like-minded in this regard.

Eric Imker

Councilman, Post #1

Peachtree City, Ga.

Spyglass
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I still say a small tax increase combined

with other cuts you have addressed would be the best way to handle this.

A SPLOST won't pass...you even bragged about not voting for the last one, and the city will miss that revenue. Why you would mention this as an alternative is beyond me.

Bonkers
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spyglass

That will not cover the income losses for next year they will be much worse than this. All income will be down!

And, what about the following year which will be even worse?

Sure you can fake it along and put it off, but soon the deficit will be so big it will be extremely painful

Poor planning. They must want elected next time!

PTClurker
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sigh....

Bowser, instead of beating your chest and pointing out nuances about how indeed some companies do, in fact, have duel retirements, how about focusing on the intent of the statement.

But yes, because Imker exaggerated on that point, his entire article and proposed solution is on shaky ground. Please! (there needs to be emoticons for rolling ones eyes)

It's disconcerting that folks will read an entire article and focus on one emphasis to prove "their right, he's wrong" instead of weighing in on the real problems at hand.

... but then again, that's what you get from the internet.

bowser
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Imker and pensions

On the issue of pensions plus 401ks, Mr. Imker says he has “NEVER (his caps) heard of a business giving both to their employees at the same time.”

I suggest he check with Coke, SunTrust, UPS and several other local corporations. They all have both. While far less common than a decade or two ago, dual-track retirement benefits are hardly extinct.

Some companies, such as Coke and SunTrust have adjusted the old-fashioned pension by going to a so-called “cash-balance” plan, but it’s still a set-rate pension in addition to a 401k. Others have coped with recent hard times by suspending their 401k matches, a move that can be easily reversed down the road if things improve.

It may well be that PTC’s retirement benefits need adjustment, and that the defined plan might need to die. But it’s disconcerting to see a councilman starting the discussion from a misinformed premise.

TinCan
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Bowser, Imker & Pensions

I was going to comment elsewhere regarding that NEVER statement then saw your entry. I worked for 3 international companies from the 60s until retirement in 2001. All 3 had defined pension plans and 401Ks. And to reference a comment by the mayor later on, the last company, around 1998 or 99, did roll the allocated pension funds into the 401k and stopped the defined plan. Didn't seem too complicated for them.

Mike King
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Mr Imker

I laud your efforts to curtail spending and your efforts to fairly put our town back on solid fiscal ground. Your position on the dual retirement funding and employee furloughs is a breath of fresh air from previous councils. Getting out of this sea of debt will take both cuts in city services and an increase in taxes.

You and I dissagree on a SPLOST being the solution, to enact such, it has to be county approved. By asking for this you are asking 'Big Brother' Fayette County to help bail you out. To me that is reprehensible, Fayette County is not responsible for the woes of Peachtree City, our city government owns that responsibility.

The citizens of our fair town stand to gain should the economy turn and property values regain what they lost, not the residents of rural Fayette or Coweta who are actually helping us by shopping in our current businesses. Adding your SPLOST actually adds to costs of doing business and, in effect, is 'slapping the hand feeding you.'

Your task should be one of aiding businesses, not getting in the way and hindering them as previous Councils and most governments do as a matter of routine.

Just an early morning thought.

Bonkers
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Mike: budgets

Cutting civil service or any government employees pensions, contracts or not, is as dangerous as trying to cut retired veterans pensions!
Both are looked upon as entitlements due to low pay, although no longer as true as it used to be.

Yes, the county approval thing is a trojan horse about a SPLOST. It won't happen and they know it. Like NASA wanting to go to moon again instead of Mars where they really want to go!

As to property values regaining value and providing more taxes----they have yet to be de-valued truly and therefore wouldn't have far enough to go to raise revenue significantly. A better chance is all of the retail empty places which i"m sure have been de-values more, but it will take years to fill them.

What do you mean about "aiding businesses? I think the foreclosure thing for homes and businesses must happen before business in general will improve.

The best hope right now are grants from Washington (oh, horror of horrors) to instantly provide jobs here. Otherwise putting 15 million to work will take forever.
I fail to see why more don't understand this!

I was young during the late 30s but I remember what was required to get out of it! Primarily, a big war. Also, many jobs, the fruits of which we still enjoy a lot---dams, parks, roads, leisure, renovations, soup kitchens, getting tramps off the road, raising food, military inductions, I could go on.
But we hate DC, don't we? OK, live skimpily forever then.

doright
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A standing ovation for Mike King

Well said Mike, I 100% agree and Yes Mr. Imker NO MORE TAXES this includes SPLOST which was voted down for the first time by the citizens of this county. The citizens spoke and all officials should listen.

Let's cut spending, entitlements, and waste and then talk.