JAMESTOWN – Spending for the city of Jamestown was more than $600,000 over budget in 2014.
During Monday night’s city council work session, city comptroller Joe Bellitto went over the final, unaudited numbers for 2014, which showed the city finished the year with $630,000 more in expenses than revenue.
Bellitto said there were a couple of major contributors to the deficiency, most notably health insurance – which was $522,000 more than what city officials had initially budgeted when they finalized the budget in December 2013.
Both Bellitto and Jamestown Mayor Sam Teresi noted that the increase in health insurance was something the city has no control over, because of the city’s collective bargaining agreements with its unions states the city must cover additional healthcare costs for its employees, even if it exceeds the projected, or budgeted amount. And both the comptroller and the mayor said that 2014 was tougher year – healthwise – for employees and their families, compared to other recent years.
Teresi said that due to state law, the city can’t change the current benefit structure, unless the collective bargaining units agree to the changes. He added that that city officials have also looked at any and all insurance providers to ensure they are going with the cheapest one possible.
“People will ask, ‘have you gone out and tested the market place to see if [the current healthcare package] can be replicated [by another provider]?’ and the answer is ‘Yes, we have and we do periodically,'” Teresi explained. “Our industry advisers have repeatedly said to us that with what we have to provide under the collective bargaining agreements, the structure that we have – the self administered plan – over a period of time has been the best choice and continues to be the best option available to us.
“To put it bluntly,” Teresi continued, “there is just not plans out there of a commercial nature that replicate the benefits that we are contractually obligated to provide.”
Other items that came in higher than expected were outside legal claims – which were $208,000 over budget and the cost of road salt – which was $64,000 over the original budget. In addition, the city had to use a significant amount of its fund balance to complete the 2014 budget, meaning that it has just$160,000 remaining in its unassigned fund balance for the 2016 fiscal year.
City councilman Tony Dolce, who also chairs the city finance committee, said the news obviously poses some major challenges.
“We’re getting dangerously low in our fund balance. We haven’t started a year this far in a deficit in a long, long time so we’re already behind the 8-ball,” Dolce said. “Many of those things are out of our control. We go through each line item with a fine-tooth comb and we can do all the homework we want – cut here or there and do this and that. But when you have a couple of those items that just blow up in your face that you have little or no control over, those are obviously huge concerns and you just have to sit back, cross your fingers and hope for the best in those areas.”
There could be some budget relief for the city prior to 2016. Dolce said that the mayor’s Joint Task Force on Efficiency and Cost Reduction will have a couple of major recommendations on how to reduce some expenses and they will be presented later this month.
In addition, Mayor Teresi said its important the city keep pressure on Albany and try to convince lawmakers to seriously consider significant mandate relief that can help Jamestown and other local governments deal with rising expenses, many of which they have no control over.
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