City’s proposed budget eliminates structural deficit

The city’s proposed budget for the coming fiscal year sweeps away a previously forecasted structural deficit in which expenditures were expected to exceed revenue by $500,000.

Following a review process, city staff was able to drop an original expenditure request of about $35.8 million to $29.9 million.

“In effect, the structural deficit has been eliminated,” City Manager Gregory Rose told city council members at a Budget, Finance and Operations subcommittee meeting on Monday.

The proposed budget will be presented to the full council on Thursday during an annual retreat. Council is expected to adopt the budget in June. The expenditures described in the budget relate to the city’s day-to-day operations and do not include capital improvement projects, which are considered in a separate financial plan.

Rose said the city’s department heads prepared their budgets using a “zero-based approach.”

Brian Ritschel, director of the city’s finance and administrative services department, said this approach requires the departments to show that their requested expenditures are necessary.

“You start at a zero dollar amount and then the department has to justify the amount they want to spend,” Ritschel said.

While a structural deficit is no longer in the proposed budget, Ritschel explained a “budgetary deficit” still exists. The proposed budget includes a $1 million contingency fund – money budgeted for unforeseen circumstances. Without the contingency fund factored in, the proposed budget has a positive balance of $639,915. With the fund, the budget comes with a deficit of $360,085.  

When asked about the likelihood of all the money in the contingency fund being used, Ritschel said that question is difficult to answer.

“Because the contingency is for unforeseen (expenses),” he said.

A contingency fund is a common budgetary item for municipalities.

“You don’t want to be going through the fiscal year and not have enough budgetary capacity for those types of things (unforeseen expenses),” Ritschel said. “You want to be able to budget those in there just in case.”

The contingency fund was originally budgeted at $2 million for the current fiscal year. Ritschel said dropping that number had to do with looking at previous fiscal years and “trying to be fiscally responsible.”

The proposed budget also eliminates three city staff positions that are not currently filled – assistant city manager, public information officer and information technology manager.

The city council will decide tonight whether to create a new position, which will include the duties of both public information officer and assistant city manager. The position will be called assistant to the city manager. According to a city staff report, the position was funded in previous years but was reclassified in July as the intergovernmental affairs director.