The city’s new finance and administrative services director, Tom Duensing, recommended last week how the Maricopa City Council could plan for the next budget, which begins July 1.
Duensing, who started his job Dec. 19, said this was the first time the city had completed a mid-year budget review.
If the city continues on its current path, he said, its reserve funds could be depleted within five years.
He said the city should either cut $1 million annually for the next four years, or make a $2.5 million cut in the next budget.
Duensing said the deficit was manageable and that $1 million could be cut each year without affecting services. The projected 2012-13 budget is around $28 million, excluding capital improvement projects.
“We will be getting requests from all departments and we want to be $1 million better off than what we forecasted,” Duensing said Monday.
While either revenues or expenses could go up or down from projections in his analysis (click here for reports) Duensing said there are signs of stability, mainly with sales tax revenue.
During last week’s meeting, Duensing presented council members with four options to mitigate a potential deficit. The first was to do nothing, which would mean the deficit would compound over the years.
The second option was to address the issue early by dramatically reducing recurring expenditures.
The third was to address expenditures and revenues evenly each year.
The fourth option was to do little now and then make big cuts in the “out years,” or four or five years into the projections.
Duensing advised council to adopt option three.“This forecast is about a 100,000-foot view of the general fund,” he said. “One thing we know for sure is what option three does is allow us time to go back and address the assumptions we are making. Are we too aggressive? Are we too conservative?”
City Manager Brenda Fischer said a mid-year budget review is something most cities do yearly and asked for council members for guidance.
Councilman Carl Diedrich asked Duensing why he recommended option three over option two. In option two, Duensing said, departments would have to make 8 percent cuts right away, and that could be too aggressive. Those cuts would total around $2.5 million.
The mayor and council agreed city staff should pursue option three.
Duensing lives in Tempe where he worked for the city of Tempe for more than 16 years. He started as an accounting supervisor, was promoted to an assistant finance director and finally served as the city’s auditor.
Duensing said he applied for the job in Maricopa because he was attracted to the healthy financial condition of the city.
“What appeals most to me with the position is the opportunity to be involved at all levels of finances from budgeting and forecasting to financial reporting to supporting the operations of the departments that provide direct city services,” he said.
Among his goals are to develop sound financial practices to ensure the city will remain financially stable.
“I also feel it is important to determine the financial-information needs of the city council and staff to assist them in providing necessary services,” he said.
Duensing holds a bachelor’s degree in accounting from Arizona State University and a master’s degree in business administration from Western International University, which has campuses throughout the Valley. He is a certified public accountant, licensed in 1994.
Born in Liberal, a small town in southwest Kansas, Duensing moved to Yuma, where he attended high school. He moved to Tempe to attend ASU and has lived there for nearly 30 years. He is married and has a son who attends ASU and a daughter who is a sophomore in high school.
