The city has continued to cut money from an already tight budget, resulting in a $723,000 reduction from the 2010 amended budget. Peterson called the projected 2011-2012 budget “razor thin,” with an estimated $11,625,000 in revenues up against $12.2 million in expenditures.
City council members discussed the upcoming financial process during a work session following their regular meeting Monday, April 26.
The city has pared down its workforce by hiring no new employees for the past 24 months, Peterson said. There will be no salary increases next fiscal year, and sick leave buyouts have been eliminated.
The city may face a hike in employee insurance costs. Peterson said he has budgeted for at least a six percent increase, though the cost could rise as much as 19 percent. Every 1 percent increase for the city’s group insurance equals about $18,000.
Franchise fees from utilities are down about $25,000 from 12 months ago, Peterson said; and proceeds from the lease of assets and royalties (these make up six percent of the city’s gross revenues from the sale of water, sewer and electricity) are $147,000 down from 2008. Hotel and motel revenues are up $15,000 from last fiscal year, however.
The golf budget has been reduced from more than $1 million to about $800,000, he said.
Nonessential services will suffer, Peterson said. Grass will simply have to be cut less often, streets swept more seldom, and services like fire training in schools will have to be cut back.
Property tax collections have been lower than originally expected.
Peterson estimated in late March that collections would come to about $1.2 million, rather than the originally estimated $1.9 million.
The latest residential property reassessment brought in enough appeals to delay the submission of a tax digest to the state last year. Peterson said the city may be writing refund checks for adjusted property assessments for the next few years. A recent refund, he said came to $38,000.
“I’ve never seen a $38,000 refund check (before),” he said.