City preparing for a downturn in revenues
Published 7:22 am Friday, October 31, 2008
City manager’s plan calls for adjusting appropriations
By MIKE VOSS
Washington’s city manager is proposing appropriation adjustments to the city’s current budget to prepare the city for the expected effects from the nation’s economic recession.
The proposed reductions to the city’s general fund (which pays for day-to-day operations) come to $221,602. The council allocated $16,259,218 to the general fund when it adopted the city’s overall budget in June. The unencumbered balance of the general fund, as of Oct. 20, was $11,779,037.
The reductions come in the following areas: Salaries and benefits, $78,009; travel, $4,867; professional services, $24,395; maintenance, $58,820; materials and supplies, $33,937; and capital expenditures, $21,574.
The plan to reduce appropriations includes every city department with discretionary expenditures. The City Council is expected to act on Smith’s plan during its Nov. 10 meeting.
Smith’s proposal likely won’t be the only option to the problem the council will discuss at its next meeting, Jennings said. Jennings said he believes an across-the-board cut in expenses by all city departments makes some sense, although some departments already have lean budgets with little, if any, room for cuts.
The mayor has similar views.
Jennette said she’s glad that city officials recognized the situation early enough to prepare for its ramifications.
That’s just what his plan attempts to do, Smith said.
While the revenue outlook for the city looks bleak in the coming months, it could be worse, the city manager said in a brief interview Thursday.
That extra revenue will, to some degree, offset the expected loss of revenue this fiscal year, he said.
Smith said some city departments’ budgets for this fiscal year were “lean” to begin with, leaving them with “nothing left to cut.”
The cutbacks could result in the cancellation of some lesser-attended programs sponsored by city departments. A reduction in Powell Bill revenues (used for road-related projects) will mean less pavement maintenance next year, according to the memorandum.
The largest proposed reduction is $45,970 in the city’s Powell Bill budget. The next largest proposed reduction, $44,551, is in the Washington Police Department’s budget. That reduction comes in salaries and benefits for employees.
The proposed reductions target police, fire, city clerk and finance department positions that either have been filled or will be filled, but which experienced temporary vacancies. The money saved as a result of those vacancies will be used to help offset the loss of revenues, Smith said.
The cuts will not compromise the public-safety services the city provides to its residents, Smith said.
An attachment to Smith’s memorandum showing revised revenue estimates from several sources — sales tax, utility franchise tax, building permits, privilege licenses, interest income and Powell Bill funds — indicates the city could see revenue from those sources decrease by $417,970. Some of that loss would be offset from $196,368 in rent received from Impressions Marketing Group, which rents the former Hamilton Beach/Proctor Silex site that is owned by the city.