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Bedford City Council looked at several items, last week, as it continued work sessions aimed at developing a budget for the 2012-2013 fiscal year.
One item involved Virginia Retirement System (VRS) contributions mandated by the state. City Manager Charles Kolakowski’s proposal calls for an approach that will result in no pay loss for employees. The state mandate calls for a 5 percent increase in employee VRS contributions, but permits localities to take a multi-year approach in implementing this.
Kolakowski’s proposal will go the multi-year route with employees receiving a 1.4 percent salary raise to cover the cost. This will cost the city $18,000. Kolakowski said that a 1 percent increase in the employee contribution is the minimum that the state will allow but compensating employees with a 1 percent pay raise would result in them getting less money. Kolakowski said that full implementation of the state mandate in the first year won’t result in any cost savings for the city.
“The full implementation doesn’t make sense if we go to reversion,” commented City Councilman Bob Wandrei.
Salaries are an area of concern. Kolakowski said that city employees have received minimal raises or no raises at all, over the past several years. This means that people who were hired in the last three to four years are still at entry-level pay. This is a particular problem with police.
“This is a skill that is portable and saleable,” Kolakowski said.
He also noted that many other employees have licenses.
“They do have skills that are saleable,” he said.
The city is also looking at raising electric rates.
Jeff Weddle, the city’s director of public services, said that power supply costs have gone up and the department has already cut operating costs by $490,000.
The electric budget includes $162,000 in transmission lines to replace the types of insulators on the lines
“One of the main reasons we are doing this is buzzard strikes,” Weddle said.
According to Weddle, buzzards will land on the old style insulators and electrocute themselves. In the process, they cause a brief power disruption. This is a problem for the industrial customers.
They are also buying six new industrial transformers, for a total of $300,000, to serve new industrial customers.
Fourth of July fireworks are still in the budget, at a cost of $14,000. Assistant City Manager Bart Warner said that the city has a $3,000 commitment to help with the cost.
Kolakowski’s budget calls for dipping into reserve funds to help balance the city’s budget. He suggested this because there are a number one-time expenses in this budget and, after reversion, the town won’t need to keep as high a level of reserves as the city has maintained.
“This is, hopefully, the end of really bad years,” Kolakowski said. “You always think twice when you use reserves at this level.”
However, Kolakowski said that he is recommending this in order to avoid a tax increase. He expects a better fiscal situation next year.
“I’m not comfortable with dipping deeply into the fund balance,” commented Bedford Mayor Skip Tharp, “but I don’t like a tax increase.”
Council was scheduled to hold another budget work session yesterday, prior to its regular meeting.