Posted: Nov. 3, 2009

Mequon — ayor Christine Nuernberg is concerned about the proposed 2010 city budget. The budget is so tight, she said, that the city would have little financial leeway to react to any challenges that might arise in the coming year.

"Should anything happen to fuel prices, the cost of utilities, if it's a snowy winter and we have lots of overtime for staff, we will be in the red," she said.

The recession has added another degree of difficulty to the budget process statewide. The city, like other municipalities, is facing decreased revenue because of low interest rates, a decline in building and development and other factors. On the other side of the ledger, health care costs will increase 9.5 percent and the Wisconsin Retirement System is requiring increased contributions to offset losses in its retirement funds. The city's proposed budget would reduce the workforce by 4.5 employees, largely due to consolidation of positions and leaving vacant open positions. .

The city is reducing its investment in a so-called sinking fund that is used to replace large ticket capital items such as fire equipment and is funding only 37 positions in the Police Department instead of the approved 38, Nuernberg said.

"I believe it is better for us to have small increases each year to keep up with inflation, infrastructure and equipment," she said.

The city's roads require a substantial investment because the council has not been willing to keep pace with infrastructure needs in the past. Bonniwell Road failed in 2008, requiring an investment of more than a $1 million to return it to a drivable condition.

"We have been penny wise and pound foolish," she said. In past years, the council has tried to maintain the tax levy at zero percent or very close to that.

However, Nuernberg does not believe she has enough support on the council to increase the levy to provide a cushion for 2010.

The proposed 2010 city budget would increase 15.27 percent over the previous budget, from $17,722,829 to $20,429,627 largely due to increased debt service and the carryover of money borrowed for road work. If the borrowed money is removed from the budget, the net budget would be $18,362,000, or a 3.61 percent increase, according to City Administrator Lee Szymborski. The city plans to spend $2.5 million in 2010 on additional road work, using both the balance carried forward and additional funds proposed in the 2010 budget.

The city's tax levy would also increase from $12,595,713 in 2009 to $13,090,005, a 3.9 percent increase.

The city completed a revaluation in 2009, resulting in an 18 percent average increase in property values. As a result of the revaluation, Szymborski said, the tax rate would drop to$3.06 per $1,000 of assessed value, a decrease from the $3.40 of a year ago. A home now valued at $354,000 would see a tax increase of $63 under the proposed budget.

The Common Council will hold a public hearing on the proposed budget at 7 p.m. Tuesday at City Hall, 11333 N.Cedarburg Road.