The beginning of the 2012 budget session began Wednesday night in the first of four budget workshops that are open to the public.
This first meeting provided an overview of the budget as well as fund reviews of specific departments. It began on a somber note. "The 2012 budget was especially challenging to construct and is bleak," said Mayor Liz Reynolds in her opening remarks. "Falling revenues, escalating costs, and the Council's expressed desire to significantly 'roll back' property taxes necessitated making additional cuts, deferring capital projects and purchases, reducing the levels of service, leaving vacant positions unfilled and implementing wage and salary freezes."
The roll back came at the Council's unanimously expressed desire to reduce the city's property tax while citizens began to take on the new Fire District No. 28 property tax levy, wrote Reynolds in her introductory letter at the beginning of the 2012 budget.
This means the city is expecting a drop of about $912,000 in property tax receipts, reported City Administrator Mike Thomas, and drops the levy rate down to 1.31.
Similarly, said Thomas, the city is seeing a substantial drop in property tax valuation for 2012 by more than $28 million.
Sales tax receipts are expected to remain stagnant, and the city is aware that the state is projected to suffer another $1.4 billion shortfall in tax revenue through June 2013.
Finance Director Stephanie McKenzie continued that the city's general fund, which supports the city's core services like law enforcement and infrastructure, is down as sources for the general fund are either stagnant or reducing.
She reported that the estimated ending fund balance for 2011 is $1,124,584; by comparison, the ending fund balance projected for 2012 is just $754,063.
If the city continues in its current path, following existing policies regarding management of the general fund, the city will be out of money by 2014, she said.
Against that dismal backdrop, McKenzie said the city still has two needs that the proposed 2012 general fund doesn't cover:
- To fill the vacant officer position in the police department, particularly to support the city's newly annexed areas
- To support needed street maintenance
Cost of services have increased across the board, she said.
$92,000 in Cuts at Police Department
Police Chief Jim Zoll and Lt. Bob Huebler provided the Council with an overview of the police fund and indicated that through regular meetings and overall vigilance over the department's spending, they have been able to cut $92,000 in spending from the 2012 budget.
Tracking trends in unexpected spending as well as applying for grants has also helped in the process, they said.
Councilman Jim Hogan expressed concern that cuts now might be affecting the department in the long run, using training as an example. Zoll indicated that the state currently picks up part of the cost for sending someone to the police academy for training, but it is proposing to not pay for police academy training at all next year, meaning the city picks up the cost.
If the city had filled the police position last year, posited Hogan, than it wouldn't have had to pay for the training. For next year, it would, he said.
Referring to a separate seized assets fund, Heubler reported that the city department currently has a dedicated narcotics officer to oversee narcotics activity in this area, which is seeing a lot of activity. It came after Council had approved turning a regular patrol officer position into this narcotics position, he said.
If the city were not able to fund a new police position and this officer needed to revert to the regular patrol position in order to cover the city's new annexations, it would represent a loss of revenue for that seized assets fund, which has taken in about $16,000 so far and is expected to be about $20,000 by the end of the year, he said.