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Council considers budget amendments, raises spending for Chamber of Commerce

Posted at 2:05 pm May 17, 2013
By John Huotari 27 Comments

Oak Ridge City Council Budget Meeting

The Oak Ridge City Council considers a series of potential budget amendments during a special meeting Thursday.

They were scheduled to consider more than a dozen budget amendments Thursday, but Oak Ridge City Council members approved only one that could immediately affect spending. It was a recommendation to spend another $50,000 on the Oak Ridge Chamber of Commerce contract.

The proposal will be considered by the City Council during the second and final budget reading on May 28. The new fiscal year starts July 1.

During a special four-hour meeting Thursday, Council rejected other proposals to increase spending on capital maintenance by $250,000 and cut spending on travel. Members asked for further study on a recommendation to consider relocating Fire Station No. 2 in east Oak Ridge to Melton Lake Drive.

Oak Ridge City Council member Trina Baughn, who had submitted nine proposals to cut spending and reduce the property tax rate by up to 45 cents, withdrew her recommendations Thursday. She said other Council members hadn’t agreed to reduce the property tax rate from its current rate of $2.39 per $100 of assessed value.

“I don’t think it’s fair to arbitrarily make cuts if we don’t have a plan of action,” Baughn said.

She said the residents who voted for her want a competitive tax rate and are concerned about the city’s relatively high debt and rising sewer and water rates.

“We are losing ground,” Baughn said.

But six of her amendments had already been rejected by Council in lopsided votes during a regular meeting on Monday. Among other things, her amendments could have slashed spending on travel and memberships in economic development organizations, and cut funding for the Oak Ridge Public Library and Recreation and Parks Department.

Other Council members said residents were satisfied with municipal services and the tax rate. The property tax rate hasn’t been raised in five years, city officials said.

“I want to keep the tax rate right where it is,” Council member Charlie Hensley said.

“Our tax rate is not egregious,” Council member Anne Garcia Garland said. “It’s not a burden on most people.”

Several Council members who opposed cutting services or the tax rate said they didn’t want to slow down the city’s economic development momentum. They cited a range of projects that could start generating new tax revenues soon, possibly next year, including the redevelopment of the Oak Ridge Mall and the new Kroger Marketplace development, now known as the Westcott Center.

“I’m not interested in cutting any department, nor am I interested in cutting the tax rate,” Oak Ridge Mayor Tom Beehan said. “It’s the wrong message to send to people.”

“I would hate to see us back off now,” Garcia Garland said. “I would hate to see us ‘nickel and dimed.’”

City Manager Mark Watson had originally proposed spending $125,000 on Chamber-related services and projects such as sending city officials on recruiting trips. But in a 4-3 vote, Council members approved an amended proposal from Chuck Hope and raised the amount to $175,000. The money would not be used for Chamber personnel costs, and the additional spending would come from city reserves.

Separately, Watson had already proposed reserving an extra $25,000 for unexpected Chamber-related expenses.

Hope said Watson is using a three-part approach that also includes economic development consultants Ray Evans and Steve Jones, who could earn a total of $84,000 in the next fiscal year, which starts July 1.

“It’s no longer just $200,000 for the Chamber,” Hope said. “I’m just afraid that the resources there are too low.”

Voting in favor of the increased spending for the Chamber were Hope and Hensley, and Council members Jane Miller and David Mosby. Voting against it were Beehan, Baughn, and Garcia Garland.

Baughn said the city didn’t have evidence of a return on investment from the Chamber during the past decade, and Garcia Garland said there is a natural conflict of interest in asking the Chamber to perform economic development work for the city.

“I can no longer support funding that organization at such an extravagant level,” Baughn said.

“I really think we should follow a different pathway right now,” Garcia Garland said.

The capital maintenance and fire station proposals had also been recommended by Hope. The initial recommendation to reduce travel expenses Thursday was proposed by Miller.

Hope had said residents in the far southeast corner of the city are outside a five-mile radius that could help with response times and insurance rates. He also said there are some building issues at Fire Station No. 2, including concerns about settling.

But Oak Ridge Mayor Tom Beehan, who retired from the insurance industry, said companies now look at other factors besides distances from fire stations. He said he would want more detail before the city considers relocating the fire station, particularly since it could cost more than $1 million to build a new one. The mayor said the project should be service-related, if it is considered, and not driven by concerns about insurance rates.

“I’m suggesting that we need more data,” Beehan said.

In a 6-1 vote, Council agreed to set aside the fire station proposal and make it part of Watson’s goals for the upcoming fiscal year.

The budget approved by Council in a 5-2 vote on first reading on Monday did not include a property tax rate increase, but it does include a 1 percent pay raise for city employees.

Note: This story was updated at 6:45 p.m. May 19.

Filed Under: Government, Oak Ridge, Top Stories Tagged With: Anne Garcia Garland, budget, budget amendment, capital maintenance, Charlie Hensley, Chuck Hope, contract, David Mosby, economic development, Fire Station No. 2, Jane Miller, municipal services, Oak Ridge Chamber of Commerce, Oak Ridge City Council, property tax rate, revenues, tax rate, Tom Beehan, travel, Trina Baughn

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