JAMESTOWN – The Jamestown City Council has up to $357,000 in savings it could possibly use in the proposed 2020 city budget.
During Monday night’s work session, Mayor Sam Teresi and Comptroller Joe Bellitto announced that the city has worked out a new prescription plan health insurance agreement that could help to save the city as much as $357,000 for next year. That savings was not included in the initial 2020 executive budget presented by Teresi in early October.
Teresi said his staff learned only recently that the new agreement could help save money, which is why it wasn’t brought up during his October 8 budget presentation. He explained that’s why the council typically spends nearly two months working on the budget after it is presented by the mayor, because there’s always new information that comes forward that could have an impact on the final budget.
“In some cases it’s not so good because we get little surprises blowing up in our face, such as a sales tax report that may not have been for the 3rd quarter everything we hoped it to be. But every now and then we get some nuggets of good information that come out after the executive budget is released on October 8. And that’s the reason why the process has built into it nearly two full months for the legislative branch, together with the executive branch, to work on the budget and to take into consideration new information that is coming out,” Teresi said.
Under the mayor’s initial budget, the city was expected to pay a projected $2.3 million in prescription claims for current and retired city employees enrolled in the city self-insured healthcare program. But according to Bellitto, the state healthcare program and the affordable care act have allowed the city to enroll in a new rebate program that would result in same savings for the city and that could be has much as $357,000. However, Teresi cautioned that the savings isn’t set in stone so the city council needs to be careful with finalizing the budget.
“This is all forecast right now. It’s dependent on folks utilizing information that they’ve received and used in the past. We’ve had healthy years and we’ve had unhealthy years. There could be [employees and retirees] coming into a point in their life or coming into the workforce who could add significantly to this, so I think while there are savings that we could book here, caution needs to be the word of the day,” Teresi said.
Both Teresi and Bellitto are recommending the city council only factor in about a $150,000 of savings, and they also recommend that money not be used for additional budget expenditures beyond what has already put into the executive spending plan. Instead, the mayor suggested the council consider applying it toward the tax levy to provide some tax relief for city property owners.
In his executive budget, Teresi presented a spending proposal that includes a 1.7% increase in spending over the current year, bringing total expenditures up to $36.6 million. The budget also included an $83,000 increase in the tax levy – which is 0.5% higher than 2019. If the council were to apply the $150,000 as recommended, it would wipe out the $83,000 increase and also bring the levy down another $67,000. WRFA estimates that would result in the tax rate going down 1.4%, or about 34 cents per thousand assessed value, making the new tax rate $23.51 per thousand assessed value.
The city council has a deadline of 5 p.m. Friday to submit its budget amendments and finance committee chair Tony Dolce said at the time he or another member will likely recommend adding the tax cut to the revised budget proposal. The council is also still awaiting word on what the city’s third quarter sales tax revenue will be for this year, which could help it adjust its sales tax projections for next year before finalizing that revenue line in the budget.
The council has until Dec. 1 to approve a budget for next year and will likely vote on a final spending plan on Nov. 25. The budget hearing is set for Monday, Nov. 18 at 6 p.m. in council chambers.