LOCKPORT – The City of Lockport may face a choice between layoffs and a tax increase, Budget Director Richard P. Mullaney said Wednesday.
Mayor Michael W. Tucker agreed.
Mullaney presented the Common Council with a stack of budget requests from department heads. He told reporters that the budget is intertwined with contract talks with the city’s five unions, whose contracts expire Dec. 31.
In 2011, salaries and benefits totaled 86 percent of the general fund budget.
The city had a $1.2 million operating deficit last year, its third consecutive year in the red.
“We are to the point in the general fund that you can’t depend on the fund balance,” Mullaney said. The city has $427,000 left in its unappropriated fund balance.
Four of the five unions have agreed to forgo a health reserve account payment, due in November, which was to total $675,000.
“You’re talking about reducing the number of people who come to work unless you’re able to negotiate some givebacks,” Mullaney said. “I don’t think that’ll be a surprise to any of the five unions.”
Mullaney, who retired last year as city clerk but continued as budget director under a part-time contract, said the city’s insurance broker estimates a 12 percent increase in health insurance premiums and a hike of 20 percent to 30 percent in Medicare Advantage costs.
Those increases put the proposed total for health insurance over $5.1 million.
“Someone said we keep reducing the number of people, but it’s never enough,” Mullaney told the Council.
Tucker said he did not ask the department heads to meet any spending targets. He said last year, he asked them for 10 percent cuts, but the only departments that complied were police and youth and recreation.
“I decided not to do that this year, to let the Council do it,” Tucker said. “A 10 percent reduction for [department heads] is people, and they don’t want to pull that trigger. We’ll let the Council pull that trigger.”