The city’s 2014 budget proposal has a projected $2 million deficit, the mayor told Common Council members Tuesday night in reviewing an early version of the spending plan.
“It’s alarming,” Mayor Dick Miller said during discussion at the meeting in Common Council Chambers in City Hall. However, options to reduce the deficit figures will be presented at a workshop at 5 p.m. Tuesday next week, he said.
The proposed budget has no layoffs, Miller said, but the city continues to seek reduced personnel costs through attrition.
In a previously adopted five-year plan, the Common Council identified a deficit target of $538,000 for next year, Miller said.
According to the preliminary plan, 2014 revenues are estimated at about $14.5 million, with expenditures estimated at about $16.7 million.
Long said told the council that the plan was the “first blush” based on requests by department heads. Before Tuesday’s workshop, Long said, he and Meg Hungerford, director of finance, will meet again with department chiefs to review priorities.
Miller clarified that department heads were prudent — not “cavalier” — in their requests. The workshop will be an opportunity to discuss options presented by the mayor, city manager and director of finance, Miller said, and council members are welcome to introduce alternatives “at any time.”
The 2014 budget must be laid on the table the second council meeting in November, Miller said.
“We remain two weeks ahead of the budget preparation schedule,” Miller said in a memo to the council. “But the magnitude of the deficit and consequences of related actions, requires early discussion to facilitate an acceptable final outcome.”
Miller said challenging factors in the budget process include embedded salaries and benefits, the governor’s 2 percent property tax cap, flat state aid and fluctuating revenue from sales taxes. A major question is how much can the city saved through staff attrition, he said.
Long said the city must look at personnel expenses to find long-term relief. Delaying needed capital projects to reduce spending will postpone expenses to another year, he said.
Last year, after considering various interventions, the Common Council approved a $20.6 million budget for 2013 and an amendment that retained one of two unfilled police officer positions.
The $20.6 million budget included water, sewer, enterprise and miscellaneous funds and a general fund of $14.87 million.
The 2013 general fund had a deficit of $496,117, which was met by an appropriated fund balance, Hungerford said last year. The general fund was supported by a real property tax levy of $4.45 million, which was up 2 percent and met the state-mandated cap.