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Youngstown’s 2015 budget is $20 million more than last year
YOUNGSTOWN
The city administration’s proposed $179.7 million budget for 2015 is about $20 million more than what the city spent last year.
About $14.5 million in additional expenses are going toward major long-term water and wastewater improvements. Those two departments are self-sustaining, meaning they are funded through the fees charged to their customers.
City officials said the budget changes throughout the year. They point to the budget approved by city council last year — $166.7 million — and how much was actually spent — $160.2 million.
“It’s a living, breathing document that often changes,” said Mayor John A. McNally. “Department heads don’t go out and spend money because it’s in the budget.”
Also, some of the money in the budget is passed through the city without seeing any of it, said Deputy Finance Director Kyle Miasek.
An example is $5.5 million the city receives in tax-increment financing from Vallourec Star as a result of its $1.1 billion expansion in 2013. Vallourec makes property-tax payments and then gets 75 percent of it refunded with the other 25 percent going to the Girard school district. The facility is in Youngstown, but originally was in Girard with money going to that city’s school system.
The $5.5 million is treated as a revenue and an expenditure, which increases the city’s budget, even though the city doesn’t get any of it, Miasek said.
The wastewater department is expecting to spend $7.5 million more this year than in 2014, with much of that money going toward the start of a $146 million, 20-year plan to upgrade its treatment system as mandated by the U.S. Environmental Protection Agency.
The city raised its sewer rates by 3.99 percent Jan. 1, and will increase them by that same percentage every January for the three following years to help pay for the improvements.
The 2015 wastewater budget calls for $5 million in capital-improvement projects and $1.8 million in debt service.
The water department expects to increase its 2015 spending by $7 million compared with the previous year. That department is starting a $14 million, six-year project to replace all of its water meters later this year.
This year’s water budget includes $3.7 million in capital-improvement work and $1.8 million in debt service.
The city’s proposed general fund this year is $41.6 million, an increase of $1.7 million from last year.
The main reason for the increase in the city’s budget is an extra employee salary payment — every 14 years there is a 27th payment, said Finance Director David Bozanich. City employees are paid every two weeks. That additional pay adds $1.2 million toward the city’s 2015 general fund expenditures, Bozanich said.
Most of the rest of the general fund increase is for an expected 8 percent to 10 percent increase in health-care costs for city workers and a 1.5 percent salary increase they’re receiving this year, Bozanich said.
“The figure is skewed because of an extra pay period, but employee hiring is flat except for hiring a few employees in traffic engineering, the street department for demolition and for police,” he said.
The city is adding 10 new police officers to its ranks this year, and taking seven veteran officers, assigning each to the city’s seven wards as part of a community policing effort, McNally said.
About half the cost of the community police officers will come from federal funding the city receives for community programs, Miasek said. The police department’s budget increases by about $130,000 this year compared with 2014.
The fire department’s budget saw a decrease of $522,000 in 2015 compared with the previous year because staff was reduced by eight, through attrition.
City council has to approve the budget by March 31. Approval from council could come as early as its next meeting Wednesday.
The city plans to spend $1.2 million — including $400,000 in federal grant money — on demolition this year, Bozanich said. The city spent about $700,000 on demolition in 2014, Miasek said.
The city expects to see a sharp decrease in its income-tax and business-profit-tax collections this year.
The city finished 2014 with $42,878,600 in income and profit taxes. The city had projected receiving $43,401,900 last year.
The projection for 2015 is $41 million — $1,878,600 less than what it collected last year.
Next year and 2017 are expected to be bad financial years for the city, Bozanich said.
Adding to the declining tax collections is Vallourec is making the last of three $2.9 million payments to the city this year. That amount drops to $100,000 annually starting next year. The money was for land Vallourec leased from the city as part of its expansion.
The city will try not to add nonessential employees during the next three years, and the amount of equipment purchases and capital improvements paid by the city’s general fund is being reduced, Bozanich said.