City approves 2011 budget

January 7, 2011

By Tim Pfarr

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The City Council passed the 2011 budget with a 6-1 vote — with Councilman Sonny Putter dissenting — at its Dec. 7 meeting. The budget forecasts a $46,000 surplus for the year.

“I want to commend the staff for working creatively,” Deputy Mayor Steve Buri said at the meeting.

Mayor John Dulcich also said the budget was a success, given that the council and members of city staff were able to balance the budget with virtually no tax hikes nor service cuts.

Although the sentiment for the 2011 budget was largely positive, comments were infused with statements regarding the importance of financial cautiousness in future years.

“Are we the Titanic or are we the Exxon Valdez?” Dulcich asked. “We can’t be sitting in our cabin. We have to be at the helm.”

Councilwoman Carol Simpson emphasized that the city’s financial future will be difficult.

“I don’t think it’s ‘Alice in Wonderland’ that we had before,” she said.

However, Putter rejected the budget’s conservative forecast, which does not take into account any new revenue sources or call for property tax hikes that could help fund additional services and projects.

“Where this budget fails is we have no plan A,” Putter said, referencing the worst-case-scenario budgeting tactics.

He also warned that the city might be the target of a lawsuit by cutting funds for A Regional Coalition for Housing, which facilitates the construction of housing projects affordable to those with moderate or low incomes.

The city cut its funds for ARCH from $53,000 to $3,000 last year, which the council had said would be a one-time cut. This year, the budget calls for $10,000 to be allocated to ARCH, but the funding will be contingent on receiving money from developments in the city to fund affordable housing.

In an interview after the meeting, contract City Attorney Dawn Reitan said she is not concerned the city could be subject to a challenge or a lawsuit for decreasing its funding, citing the city’s previous contributions to ARCH — which total more than $500,000 — and its inclusion of affordable housing requirements and incentives in city code.

Just before voting to adopt the budget, Councilman Bill Erxleben proposed taking $1.5 million from the city’s rainy day fund and transferring it into reserves, which requires a supermajority of the council. His proposal failed 1-6.

Erxleben said his proposal was intended to protect Newcastle citizens in the event the city becomes no longer financially viable and disbands, possibly joining another jurisdiction.

If Newcastle were to disband, its residents would still bear the debt the city had accumulated. Transferring rainy day funds to reserves would ensure the city would have money to pay off much of its $2.8 million debt, which it incurred from partially funding the construction of Coal Creek Parkway.

“I think it’s important for somebody to take into account the risks of the future, especially when they’re so apparent on paper,” Erxleben said at the meeting. “I’m not saying it will happen. I’m saying you have to plan for these things.”

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