City tackles shortfall
The city took an important step Tuesday night in determining how it’s going to address a budget deficit that stands at approximately $450,000 this fiscal year. City Council members voted 5-0 for a resolution stating the city has collected about $600,000 less in sales tax revenue than projected for the fiscal year, which ends June 30. In addition, property tax collections have declined and city officials are uncertain about revenue from the state, which faces its own budget crisis.
The resolution fulfills a requirement the city must take before it can consider laying off workers, reducing their hours or having them take voluntary or involuntary furloughs.
“It’s urgent,” City Administrator Dan Holler said before Tuesday’s meeting.
The city has cut nearly $1 million in expenses from its $12 million budget this fiscal year, but still needs to slice another $250,000 before June 10, when the city will consider next year’s budget. About 77 percent of general fund expenses goes to salaries and 57 percent goes to public safety, Holler said.
Holler has been meeting with department heads and employee groups for the week, and they’re also looking at job-sharing, cuts in hours and early retirement. A hiring freeze is in place.
Some city costs have increased, including payroll, in the past year after employees won a raise – including a higher salary for the new city manager than what the city paid previously. Wage and benefit roll-backs are not on the table, Holler said.
The city reduced its general fund expenditures by $400,000, or about 5 percent, in February with department heads making cuts in services and supplies, City Finance Director Carol Fish said.
The budget projects property tax revenue to slow from a 7.5 percent increase seen this year to a 4 percent increase next year, Fish said.
Income from sales taxes and permits related to building also are expected to slow, down from double digit increases seen in past years.
“It’s easy being a finance director when things are going well,” Fish said.
To contact Staff Writer Pat Butler, e-mail email@example.com or call 477-4239.
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