Staff Writer

ONEONTA — Increases in health insurance costs and retirement payments for city employees were major considerations in putting together the city's proposed 2003 budget, city officials said.

The tentative spending package for next year will be presented to aldermen during Tuesday night's Common Council meeting.

And while Finance Committee members declined to release budget specifics, they are saying that any increases are largely because of rising health insurance costs, combined with increases in pension contributions.

"Retirement payments were a tremendous factor," said Finance Committee Chairman and Eighth Ward Alderman Asa Allison on Friday. "With the stock market going down, the state retirement system lost a lot that was invested in the market."

Fourth Ward Alderman Keith Bott, also a member of the Finance Committee, said health insurance costs, which were also blamed for the budget increase in 2002, are once again a factor.

"We have our fingers crossed that the costs won't go as high as the preliminary estimates," said Bott, noting that final quotes are not yet back from the city's health insurance provider.

Whatever the increases, the projected tax hike for the city will be less than this year's 6.81 percent hike, Bott said.

"Department heads were diligent in putting together their budgets," Bott said. "Conservative cuts were made, but none that will significantly affect the operation and delivery of current services."

Nearly $500,000 in departmental requests were deleted in this year's $12,964,636 spending plan.

This year's budget included a tax levy of $3,652,064, an increase of $235,727, or 6.9 percent. The property tax rate is $13.41 per $1,000 of assessed value, an increase of 85 cents or 6.8 percent.

Although there may be increases, the city is in pretty good financial shape, compared to what Otsego and area counties may be facing, Bott and Allison said.

Several county representatives said in September that they projected a tougher budget year than in 2002, which showed an increase of 3.8 percent in the property tax levy.

Again, the soaring cost of health care in the United States is being pointed out as one of the major reasons for budget increases. In New York, that problem can show up on the property tax levy, because counties are required to pay 25 percent of the cost of many Medicaid programs.

"It has been quite difficult trying to get the budget together this year," said Allison of the city's proposed budget package. "But when looking at what's going on with Broome and Otsego, we look pretty good."

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Jill Fahy can be reached at jfahy@thedailystar.com or (607) 441-7221.