City of Rochester
(Friday, May 18, 2012) – Mayor Thomas S. Richards presented the City Council with a fiscal year 2012-13 City budget today that closes a $40 million gap without raising taxes or cutting vital services.
A one-time cash influx from the state, improved sales-tax collections and decisions made in last year’s budget were underlying factors in a spending plan that will keep Rochester moving forward in a spirit of optimism despite significant structural challenges that remain in place.
“We will continue to invest in our community; its cultural and social well-being, as well as its infrastructure, public safety and economic future,” Mayor Richards said. “We will do it while preserving our flexibility to address an uncertain future, so that we can both manage and invest in that future.”
The budget avoids the path of least resistance by freezing the tax levy and using just $3.5 million from City reserve funds. Property values rose 4.3 percent in the last assessment, but the tax freeze will lower the typical homeowners’ tax rate by 3.6 percent.
“We need to wean ourselves from these tax increases and find other ways to fund our cities,” Mayor Richards said. “I cannot promise that we will never raise taxes -- that will depend on the choices that our future brings -- but we do not need to raise taxes this year.”
Those decisions forced difficult choices to find new efficiencies in City operations, while continuing to fund the necessary services and capital investment that will keep Rochester a vital place to live, work and visit.
Total employment was cut by 16 workers, bringing the labor force to the lowest level in 40 years at 2,703. No more than six employees should be laid off.
The $488 million budget increases total spending by 2 percent, or $9.6 million, over the current year. New spending was held relatively flat despite punishing increases in employee health and pension benefits that added $21 million to the budget.
The budget was buoyed by a $15.4 million spin-up in state aid. It also reflects the benefits of a retirement incentive implemented last year, which removed 200 workers from the roster in time to avoid $5.9 million in obligations to the state pension system.
Increases in water rates and other fees, along with rising property values, will increase the typical homeowner’s taxes and fees by about 1 percent, or $21.45.
The spending plan maintains current staffing levels in the Police and Fire Departments and includes funding for both Departments to recruit a diverse pool of new members and hold academies starting in August.
It continues to fund investments in city neighborhoods, the Port of Rochester and downtown and also maintains service hours in libraries, recreation centers and Neighborhood Service Centers.
The Mayor also proposed spending $100,000 to work with the Rochester City School District to improve anti-truancy efforts.
Mayor Richards cautioned that structural challenges remain on the City’s ledger. Solutions will require the state to find new methods to finance the needs of cities, including a more equitable funding formula for upstate cities.
Long term trends in rising health-care costs also point to an urgent need to develop a new agreement for City employees to contribute to their health benefits, the Mayor said. Deputy Mayor Leonard Redon will work with the unions on that agreement.
“It is not a matter of finding fault,” Mayor Richards said. “It is a matter of dealing with the problem that we must admit we all have. Government is not the gift that keeps on giving. It can break and when it does, we will all get hurt.”
Despite these challenges, Mayor Richards said the budget reflects ample reason for optimism in Rochester. He called it “a budget for a city that intends to thrive.”
Closing the Gap: Summary of how the $40.2 million gap was closed:
- $15.4 million – One time state aid “spin-up”;
- $7.0 million – Reduction in planned cash capital funding;
- $5.9 million – Reduction in projected retirement costs due to the retirement incentive;
- $3.5 million – Increased anticipated sales tax collections from an improved economy;
- $3.5 million – Use of reserves; $2.0 million – Departmental reductions and efficiencies;
- $1.7 million – Revenue from proposed fee increases;
- $1.1 million – New Fire Department revenues from Town of Brighton and Rural Metro;
- $0.1 million – Net of other changes.
News Media: For more information, contact Gary Walker at 428-7405.