Proposed Duluth Budget Aired

Duluth City Administrator Phil McLemore had a “dress rehearsal” for his presentation on the proposed FY2012 budget Monday night to the mayor, council and citizens.

Although the council’s May 23 called meeting and public hearing on the budget was dutifully advertised in the Gwinnett Daily Post, the city’s legal organ, the notice was not posted at the Main Street entrance of City Hall as also required.

Mayor Nancy Harris proceeded with the budget presentation since the hearing had been publicized in case any citizens wished to comment on it. The city council will hold the official public hearing on the proposed budget at its June 13 meeting and consider adopting it June 27. The new budget would go into effect July 1. As proposed the budget will not require a tax millage increase, the mayor said.

Developing the budget is a long, grueling process that starts in January of each year with department heads preparing tentative budgets. In its budget workshops, “the city council looks at every line item in the budget,” she said. “This is not a perfect budget,” commented Councilman Billy Jones. While not everyone on the council agrees with everything in it, he said, “we have probably come up with the best budget that we can.”

The proposed FY2012 budget totals $31,463,416, a decease of more than $11 million from the officially adopted FY2011 budget of $42,583,393. The city staff, council and citizens have worked together for the past three years to keep the city’s budget as trim as possible in response to a downturn in the economy, McLemore said. Revenue is down 20 percent from three years ago, he said.

The proposed FY2012 budget has a revenue shortfall of $3 million, but the city plans to use $3 million in reserve funds to offset it. The city has $3.5 million in reserve funds above the four-month minimum it is required to keep, McLemore said. 

The budget also incorporates recommendations to increase user fees from a Citizens Budget Committee to balance revenues and expenditures. This is the third year a citizens advisory committee has assisted the city in developing a budget. It met weekly for five weeks in March and April to come up with ways to reduce expenses and increase revenues. 

The committee’s most significant recommendation, estimated to bring about $500,000 into the city coffers, McLemore said, would charge non-residents additional fees for using the Municipal Court.

The budget also includes about $750,000 anticipated funds from a stormwater utility fee the city plans to implement. The average fee for a single-family home would be about $36 a year, McLemore said. Stormwater utility fees would also be paid by businesses and nonprofits, such as schools and churches, based on the amount of impervious surface on their properties. The fees would help pay for the stormwater monitoring that is now required and for replacing a backlog of aging pipes, he said.

In addition, McLemore said, the city is establishing a Health Reimbursement Adjustment to reduce employee health insurance costs. The HRA will allow the city to self-insure a portion of the health care cost and reduce its insurance premiums, he said.

The city has not yet received tax digest figures from Gwinnett County, so anticipated property tax revenue has been estimated.

McLemore also noted that the city could receive about $1 million if the service delivery dispute is resolved with Gwinnett County. He added that he is optimistic the dispute will soon be settled because new Gwinnett Commission Chairman Charlotte Nash stated in her recent State of the County Address it would be a high priority.

The $1 million would represent about the amount of revenue the city has lost because the Duluth Police Department is not being allowed to use radar guns to catch speeders until the issue is resolved, McLemore said. 

The FY2012 proposed budget is available for public inspection Monday through Friday from 8 a.m. to 5 p.m. in the city clerk's office at Duluth City Hall. After adoption, a copy will be placed on the city's website.