Several things breaking in Arnold’s favor are helping the city avoid increasing property taxes next year.
Council is scheduled to vote on the city’s $4.4 million 2021 budget during a meeting on Tuesday. The meeting will be held remotely on Zoom, beginning at 7 p.m.
As proposed, the city’s property tax rate would remain at 43.5 mills.
“A lot of things broke our way this year and that was good,” said Councilman George Hawdon, council’s director of accounting and finance. “As a result, we were able to avoid a tax increase.”
Savings found in other areas are helping Arnold absorb a 40% increase in its pension costs, and the city’s revenue has not been impacted as much as feared by the covid-19 pandemic.
Hawdon said City Manager Mario Bellavia found some savings in the city’s insurance coverage, and the city is saving money on electricity from converting street lights to LED bulbs. Less water usage saved the city on its sewage bill.
Hawdon said the city was expecting a 15 to 30% drop in revenues because of the pandemic, but it didn’t happen.
The city’s revenues “didn’t take the hit that we expected them to from the pandemic,” Hawdon said. “Our revenues stayed about where they usually are. We didn’t have a big slump.”
Hawdon said the city is trying to improve the yield on its pension investments.
“We were rather conservatively invested,” he said. “We kind of missed out on the stock market boom in 2017, 2018 and 2019.”
Hawdon said the city has structural issues, such as declining property values, that council will have to address over years and decades.
“You can only save so much money. You can’t always count on the cards breaking your way, either. We’ll have to see what next year holds,” he said. “At some point, we’re going to have to make some kind of change. We have to balance the budget, it’s that simple. Whether it’s by cutting services or raising taxes, we have to do that.”
