Operating expenses have outpaced revenues by about 5 percent in the present fiscal year, but City officials say they believe that by cutting operating expenses by 3 percent in the next few months, they can make up the $4.3 million shortfall and bring the City’s fiscal year to a close with expenditures $2.7 million under budget projections. Assistant City Manager Martin Lyons presented an update on the City’s finances at a special City Council meeting on Oct. 19 at the Levy Center.
Among the cost-cutting measures the City is considering are freezing hiring and non-essential spending, closely monitoring training and travel, and suspending all capital and technology expenses that do not result in savings or are not related to life safety.
Revenues from real estate transfer taxes are $1.5 million below budget projections, and fees from building permits are now projected to be $550,000 below budget projections, Mr. Lyons said. Additional shortfalls are in income taxes ($1 million below budget), investment income ($400,000 below budget) and utility taxes. One reason for the $1.3 million decline in the utility taxes, he said, is a decline in the price of natural gas. The counterbalance to the decline in utility taxes, Mr. Lyons said, is the City’s lowered cost of purchasing natural gas for its own uses.Expenditures
Operating expenses for the most part are paid through the General Fund. Within the General Fund, some City departments are tracking at or near budget projections, Mr. Lyons said.
The City Manager’s office, the Library, and the Human Resources, Finance and Community Development departments are below budget projections for the second quarter, Mr. Lyons said, primarily because of vacant positions. Seasonal variations will account for fluctuations in some departments. The Parks/Forest and Recreation and the Health and Human Services Departments are on track, he said, only because not all summer expenditures have been figured in. The Public Works Department is slightly under its budget projections, but winter has yet to take its toll on the City or the budget. Both the police and the fire departments are slightly above budgeted projections – 53 and 52 percent, respectively, rather than 50 percent.
City staff will work to reduce the final overall expenditures to 97 percent of budgeted projections by the end of the year, Mr. Lyons said. By not filling vacancies in non-essential positions, the City could save nearly $1 million, Mr. Lyons said. Saving another $750,000 could be possible by conservatively managing the repairs and replacements in the City’s fleet of vehicles, and spending freezes could garner $700,000 in savings for the City as well, Mr. Lyons said.
With these kinks in the present budget smoothed, the City could end the year without having to dip too far into reserves or return to the taxpayers for additional funds. But City officials, now starting the budget procedures for the upcoming fiscal year, say hard choices are ahead for the City Council and the community. Early estimates, as the City embarks on a series of budget workshops, are that anticipated expenses could be $8-$10 million over projected revenues.
City Managerâ³ Budget Workshops
The City Manager’s series of budget workshops will take place on Nov. 7 (8:30 a.m. – 1 p.m. at the Levy Center), 12 (7 p.m. at Robert Crown), 17 ( 7 p.m. at Fleetwood-Jourdain) and 30 ( 7 p.m. at Civic Center).
The public is invited to observe or participate, but City Manager Wally Bobkiewicz advises that attendance at the Nov. 7 workshop is mandatory for additional participation. These meetings are separate from the Mayor’s citizen budget committee.