board of finance

Resolutions to lower the cost to the city of the retirement system for city employees

The Board of Finance proposed a resolution to lower the cost to the city of the retirement system for city employees. The resolution, noting that city contributions to the retirement fund jumped from about $1.5 million in fiscal year 2002 to $4.6 million this year and are “still not sufficient to meet the actuarially projected future costs.”

This part was a bit confusing to me… when city employees spoke out about this during the public forums at the city council meeting, they were under the impression that they were promised a certain level of benefits in exchange for lower wages. If the city did in fact promise them these benefits then they do owe it to them… they should weasel out of it. However, as we all should should know that retirement funds to have fluctuation and the economy is still not performing as well as it has in the past, so investments are still generally lower. This is the problem for the city’s retirement fund. However, I believe it’s only temporary. Besides, the retirement fund should generally be invested in safe investments such as bonds… maybe they messed up… and now they want to pass on their promises. It’s seems that the city had plenty of money to give the YMCA last year and they have enough money to go after churches to take their property… you can’t trust a politian I guess.

2006 City Budget

Mayor Peter Clavelle introduced the 2006 City Budget proposal at the last City Council meeting. Having followed the finance committee meetings, I am aware of the problems and issues they faced and I understand that it was a difficult process for everyone involved. However, I noticed a couple problems regarding the budgeting process that disturb me.

1. Board of Finance members are not willing to cut programs that they personally care about and members feel they must fight for more for themselves and constituents at any cost. It doesn’t matter whether it’s something the city should be doing or not… or even if it something that the majority of citizens need or use. Therefore, the budget will always increase and more programs will stay and increase whether they are needed or not.

For example, the city wanted to add an extra ambulance so that one could sit as a backup unit at a total cost of $150,000. While it was discussed that we could use UVM’s ambulance service as a backup or even a nearby town should the situation come up, but in the end these ideas were dismissed. It could have at least been explored more.

2. The Board of Finance is too accepting of department recommendations. The city asked for cuts from each department. Some departments did exactly as they were asked and cut their budget by becoming more efficient without losing any services to the city. Whereas, other departments claimed the only way was to cut out whole programs that they knew board members would object to. So, they got away without lesser cuts than other departments. This seems highly unfair to me. The city needs to have independent audits of each department performed to see where efficiencies could have been created to cut costs of every department. Therefore, the better performing departments would have been able to keep their budget and the under-performing ones would have been cut and they would be forced to do better or bringing in private contractors to do the job should be considered, which is already the case in regards to managing the city employees payroll. This should be a common practice as any non-government entity of this size would be definitely required to have regular external audits.

Click here to view the entire City Council meeting minutes for the May 9th meeting.