Provo struggles with tight budget

PROVO — As the Provo City Council tackled the proposed 2009 budget Tuesday night, city employees had one plea: "Don't balance this budget on our backs."

At stake: Provo is facing one of its tightest budgets. Projected revenue sources for the 2009 fiscal year are down. At the same time, the city is experiencing substantial spikes in expenses such as fuel costs and employee health benefits.

Mayor Lewis Billings hasn't suggested tax hikes, but his proposed 2009 budget of approximately $149.2 million recommends increases in fees, including those for parking tickets and city sports programs. Billings also recommended Provo trim down city employees' pay grades and cut cost-of-living adjustments for the next year. He suggested Provo require city employees to start paying a portion of their health benefits,

Provo City Employees Association president Skip Tandy said city employees are "devastated" by the recommendations. He asked the City Council to find a way to retain employees' benefits, even suggesting an increase in utility rates.

"Nobody wants to think about it, but maybe it's time for a small rate increase," he said.

Provo Finance Director John Borget said he understands city employees' concerns, but he doesn't think a utility rate hike should be considered to fund cost-of-living adjustments.

"I don't think the COLA ... should be the driving force to raising energy rates," he said.

In recent years, Provo employees received a 1 percent to 2 percent cost-of-living adjustment each year, and the city covered the cost of health benefits. Previously, city employees could also qualify for a 5 percent step increase in wages each year for a five-year period, after which the step increase would scale to a 2 percent increase for the next three years.

Under Billings' recommendations, city employees' step increase would be changed to an approximate 2.5 percent step increase annually for 10 years, then scale back to 2 percent for the next three years. They would also have to pay $60 monthly for their health benefits costs, and no cost-of-living adjustments would be available this year.

But the recommendations, if approved, will have an adverse effect on the city's ability to hire qualified employees, Tandy said.

"People can go somewhere else and find a better wage," he told the council Tuesday night.