Despite Complaints, Hugo Council Prepared To Adopt Budget
"Cut The Pork," Residents Say; Council Says,"What Pork?"
HUGO - Hugo's political division was once again on display during the City Council meeting of December 3, as council received public comment on the city's proposed 2008 budget.
As one might expect during a hearing focused on the city's property tax levy, most of the residents who spoke during the hearing complained about what they perceive to be an excessive city tax levy during difficult economic times.
"I think you guys could somehow cut some pork out of this budget . everybody's pocketbook is getting hit significantly," said a visibly angered Wendy Maxwell, expressing a theme that recurred throughout the hearing.
The council's initial goal was a 0.5 percent reduction in the city's tax rate, the fifth consecutive year the rate has been reduced. During this five-year time frame, the city's tax rate has declined by more than 9 percent overall.
According to Finance Director Ron Otkin, final numbers indicate the urban tax rate will decline 0.72 percent and the rural tax rate will decline 1.10 percent.
According to Washington County, the decline in tax rate means that 80 percent of residential parcels in the city will pay less in total taxes in 2008 than they did this year.
While the tax rate has declined, the total tax levy is set to increase by 11.55 percent, from $4,652,080 this year to $5,189,598 in 2008.
After deducting fiscal disparities received back from the state, the amount that local property taxpayers must pay increases from $4,360,487 to $4,842,579 (11.06 percent).
Most of the residents who spoke argued that the city should do more to trim its expenditures.
"Nobody cares about the tax rate - people care what they pay," said ex-mayor Wally Stoltzman. "I object to funding parks through property taxes at this time . when times are tough, we have to pull back a bit."
Mike McAllister, another ex-mayor, identified himself as a representative of We the People, a grassroots political organization that opposes what they perceive to be the city's pro-development attitude.
McAllister outlined We the People's proposed revision to the 2008 city budget, which would trim over $600,000 by eliminating some staff positions and reducing certain expenditures that the group perceives as unnecessary.
In response to McAllister's proposal, Council Member Frank Puleo pointed out that the staff cuts the group proposes would have to be offset by sometimes more expensive contract labor, and that other proposed cuts would negatively affect city services that many residents value.
"I think the [the budget] is where it should be," Puleo said.
Resident Clyde Wagner, who works in the mortgage industry, argued that the historically high number of home foreclosures may make it hard for the city to collect the full amount of the proposed tax levy. "We need to take a very strong look at our spending," he said.
In response, Finance Director Ron Otkin pointed out that that the city levies 5 percent more than projected expenditures in order to account for tax delinquency.
Otkin said that tax delinquency in Hugo usually amounts to less than 2 percent of the levy, meaning that even if delinquency were to double in 2008 he believes the city would be prepared.
"I'm not at all concerned with that effect on the city's budget," Otkin said.
Council and staff steadfastly defended the proposed budget throughout the hearing.
Mayor Fran Miron likened the city's budgeting process to similar budgeting processes that take place in the private sector - if council perceives that the local economy is struggling, it will direct staff to reduce the tax levy and city expenditures in future years.
Despite resident complaints, Finance Director Otkin said that he anticipates that council will formally adopt the budget as proposed during the last regularly-scheduled council meeting of 2007, on Dec. 17.
"The motion was to prepare resolutions based on the budget that was proposed, [but] council still has the opportunity to make any changes they want. It's not over until it's over."