Like many other municipalities, the City of Clarksburg faces the combined pressures of declining revenue and increasing costs.
The $8.8 million budget approved by city council for fiscal year 2000-2001 does not contain deficit spending. However, medical insurance costs and a decline in business and occupation tax revenue from construction projects have placed the city in a tight financial situation.
There are many factors involved. A major influence is the fact that 70 percent of the budget is consumed by fixed personnel costs, leaving city government discretion over only 30 percent, said Frank Ferrari, city finance director.
"It gets down to supplies and equipment and materials," Ferrari said. "We've looked at everything discretionary we can. We're down to a zero-sum game. It's a tight situation, and it's going to come down to the point where council will have to make decisions."
Three positions have been eliminated through attrition. However, City Manager Tom Vidovich said he does not anticipate cutting personnel this year.
"We've agreed to meet with city council once a month and review the budget for each department," Vidovich said. "We will set a level of service below which we will not go. Level of service is dictated by number of personnel and how the workload is distributed."
As for whether the city might seek tax increases, Vidovich said: "You cross that bridge when you get to it. First, you establish the base level of services you want to provide and compare that to the level of revenues you have."
Areas in which the city faces snowballing costs are health insurance, prescription coverage and optical and dental coverage for municipal employees. Last year, the city budgeted $1.1 million for those programs and $1.2 million this fiscal year, Ferrari said.
"We anticipate our costs will possibly be more than that. We may be required to spend additional general revenue funds to cover it," Ferrari added.
The city provides coverage for maintenance prescription drugs for up to 90 days, with a $10 co-pay for municipal employees. In 1996, city council authorized optical and dental coverage, with the city absorbing 100 percent of the cost, Ferrari said.
"The costs for prescription coverage could well approach $200,000 this year," Ferrari said. "The city's share of claims for dental and optical run $50,000 to $60,000 a year."
Vidovich said the city has hired a consultant to examine options for dealing with the insurance issue and the program costs over the past five years. The report, he said, is expected to be complete by the end of the month.
The finding will be presented to council and a special insurance committee that includes representatives from each municipal department. According to the consultant, prescription costs are now rising 30 percent a year, he said.
"When we get the alternatives, decisions will have to be made on balancing benefits and the anticipated costs of each of the alternatives," Vidovich said. "Hopefully we can maintain benefits at a dollar amount the community can live with. We're dealing with tax dollars, after all."
Mayor David Kates and Councilman Jim Hunt have also cited insurance costs as a major budget concern.
"If you work in the private sector, you get that letter telling you your coverage is getting more expensive and you just put it in your pocket," Hunt said. "Government is one of the few places where people can say, 'This is terrible' and go out and picket in the streets.
"Each year for the last seven years, the insurance provider has come to us and said, 'You have a Cadillac program. You're either going to have to pay more or make changes.' We didn't raise deductibles in the past, so this year it will probably hit us harder."
Kates said insurance will be one of the most important issues council will face this year.
"The city pays the full package and prescription costs have gone sky high," Kates said. "I went the other day to buy three prescriptions and it was more than $390."
Last year, the city was also hit with "exceptional" costs in legal fees to investigate allegations of sexual misconduct by a city police officer in which the officer was cleared of the allegations. According to the 2000-2001 budget proposal, total expenditures for legal fees for the first six months of this fiscal year were $132,000, when the total amount budgeted for this fiscal year was $116,000.
Also, the city has had to make large severance wage and benefit payouts for employees who resigned or retired. The resignation of former City Manager Percy Ashcraft cost $59,000. Retirement payouts cost as follows: $25,000 for a police chief, $16,500 for a police captain, $17,000 for a firefighter and $11,400 in severance pay for the resignations of seven police officers.
"We're in the same situation as a lot of other cities in the state," Vidovich said. "Economic growth is not keeping up with the rest of the nation and we're losing population and revenue. It's a matter of costs and nobody has the magic bullet."
