Provo mayor presents budget, pay freezes

PROVO — City employees won't get pay increases or bonuses, and they'll have to participate in their medical and dental coverage, but they will have jobs.

In these tough economic times, "it's good to have a job," Provo Mayor Lewis K. Billings said in presenting the city's $139.6 million budget for 2009-10 on Tuesday.

Billings called the proposed budget the most difficult of his three terms. Like cities across the nation, Provo has had to deal with millions of dollars in lost revenues from declining sales-tax collections and residential building-permit fees.

However, Utah, and Provo in particular, have been doing better economically than the rest of the nation, he said.

Sales taxes, the city's No. 1 revenue source, fell 19.4 percent in December and 10.2 percent for the year. February sales-tax revenues were down 11.2 percent in Provo, though it did better than the state as a whole, which was down 11.5 percent.

Nationally, retail sales declined 9.8 percent in December, compared with the previous December.

While residential building permits were down significantly, commercial construction was strong, with the Zions Bank tower, APX Riverwoods, Action Target, the Brigham Young University Motion Picture Studio and the rebuilding of BYU's Helaman Halls.

Other impacts from the sluggish economy include an increase in bankruptcies and foreclosures, a downturn in auto sales and an increase in the Utah unemployment rate, which climbed to 5.4 percent from the last high of 3.4 percent recorded in March 2008. Nationally, the unemployment rate was 8.5 percent in March.

To help offset the revenue loss, Billings proposes to move $1.1 million from savings in the 2008-09 fiscal year enterprise funds, which includes such things as water and power, to next year's general fund, which goes into effect July 1. The transfer is for one time only, the mayor said.

The good news, Billings said, is that no city jobs are being cut or furloughed, and the budget doesn't call for cuts to city programs or increases in taxes, user fees or utility rates.

Billings' budget also maintains the buyout plan for city employees' sick leave and retirement benefits, and it calls for the city to continue to pay into the state retirement system.