New fees hurtful, but necessaryIn an effort to spread the pain of the economic downturn and recover much more of its operations cost, the City Council appears ready to adopt a sweeping new schedule of fees for virtually all city services, ranging from recreation programs to performing arts to the Police Department.
And no matter how unpopular it might be, city leaders have little choice as they stare down the barrel of a $4 million deficit in the 2010-11 budget. The schedule of increases discussed at last week's council meeting could bring in as much as $1.2 million. Another $1 million is expected to come from cuts in employee compensation, and $2 million more from other cuts including the elimination of 24 filled positions.
Some council members said they didn't like to "nickel and dime" the public by laying on fees for virtually every city service, but what are the alternatives? In many ways the city is a business, and cannot operate at a loss even in tough economic times. When revenue goes down and margins fall, something must be done. Either spending must be reduced or revenues must increase enough to pay the bills.
Although most council members supported the smaller increases, they still must deal with one of the toughest fees of all: charging to park in Shoreline Park, which could raise up to $300,000 a year. There is strong opposition to the idea from the owners of the park's restaurants and other services. Who, they ask, would pay a $5 parking fee to have lunch or a cup of coffee?
One answer to that question could be a parking validation system. Whatever happens, it should be possible for the city to increase its revenue at Shoreline and still maintain good relations with the merchants there.
In our view, the city's schedule of proposed fee hikes is a reasonable way to charge users a fair share of what it costs to produce the service. But there is a limit. We expect many residents will be incensed when they have to pay $135 (up from $41 last year) to use the community garden plot or $5 (up from $3) to use the pool for lap swims.
Still, raising fees is just the low-hanging fruit among all the actions that can be taken to balance this budget. The best way to lower costs is to reduce employee wages and benefits, as well as the size of the workforce. Currently, the city's fastest growing expense — a recurring increase of about $4 million a year — is for personnel compensation cost hikes dictated by union contracts. But even if the city opted to impose a 401(k) pension plan for its workers now, it could take years to rein in expenses to sustainable levels.