I can see from the posts on this blog that I have evidently not done a good job of explaining our city’s finances to our fine employees.  Over the next few weeks, I’ll be taking some time to better explain our finances, and why we can not always give people what they want and what I would like to pay.

Here are some basic outlines:

Expenses

Every year our expenses rise faster than our revenues.  I know that for our employees, their health care costs, costs of fuel, electricity, gas and gasoline are rising faster than their income.  We understand that.  As a city, we have the very same problem.  Our expenses are rising just like yours. 

Revenues

Unlike a private business, we are very limited in what revenues we can raise.  Our health care and electricity costs can go up by any amount, but we can raise taxes by only 2.5%.  In private business, they would go out and look for new markets, and new products.  We are very limited in what we can raise. 

Bottom line…

Revenues can go up by 2.5% plus new growth.  Expenses very often go up by more than that.  We are forced to make cut-backs year after year.

Despite our challenges, and they are great, we have every single year offered cost of living increases to our employees.  (The two zero increases that our employees took where while Mayor Guerin was Mayor.) 

I understand that for many of our employees the modest cost of living increases we offer has not kept up with inflation.  The employees on this board have done a good job of reminding me that they pay taxes, and pay fuel bills and pay health care costs just like everyone else.  Thank you.  i do appreciate the problem and wish we were in a position to do more. 

I’ll be back in a week or two onto this board and put on more information about our finances. 

Jim Fiorentini