Budget Deficit Remains At Half A Million
Last updated Monday, October 29, 2007 9:49 PM CDT in News
By Steve Caraway
THE MORNING NEWS
SPRINGDALE -- The City Council shaved a few more dollars from 2008 expenses Monday, but the budget remains nearly half a million dollars short of being balanced.
"It's hard times," said Mayor Jerre Van Hoose. "We've taken such a hit on sales tax, we're going to have to make some hard decisions."
Sales tax collections for Springdale have fallen an average of 6 percent over the last year, following years of increased revenues of up to 7 percent. Van Hoose proposed a budget reduction for 2008, to keep the city from dipping deeply into reserves.
The mayor's proposed budget called for income of $27.3 million and general fund expenses of $27.5 million.
The council, meeting for its second review of Van Hoose's proposal, found $25,000 to remove from the Public Works department for a project that carried over from the previous year. However, the cuts didn't offset the actions approved in last week's budget review.
The council asked for three officers to be added to the police department, positions that were promised when the city joined a federal immigration program. Aldermen also approved two additional janitors instead of just one, as proposed in Van Hoose's budget.
The additions, combined with cuts in the police department and planning, would add about $67,000 to expenses. The council also declined to raise property millage at its last meeting, reducing the estimated revenue on Van Hoose's proposed budget by $250,000.
Van Hoose's proposal called for a transfer of $2 million from the city's Capital Improvement Program, but still left a shortage of $190,000, which would have to come from a surplus balance used for cash flow. The changes made by the council would lower the city's reserves to $4.58 million.
"I hated to propose spending CIP money for the general fund," Van Hoose said. "The hardest thing I proposed was freezing salaries at 2007 levels."
Typically, city employees receive either an annual cost-of-living adjustment or a step increase in salary. Van Hoose's proposal had neither. Both increases, recalculated by Laura Favorite, city financial officer, would cost the city about $1.42 million.
Aldermen discussed a hiring freeze to reduce the budget and create funds for raises. Alderman Eric Ford asked for an estimation for the cost of a 1 percent cost-of-living adjustment, instead of 2.2 percent, the rate of increase the city would have given in a normal year.
Wyman Morgan, city director of administration and finance, promised exact figures for tonight's 6 p.m. meeting for further budget review. He estimated the cost at $350,000.
District Judge Stan Ludwig described the salary freeze as a severe morale problem for employees.
"People are questioning why employees don't get at least a COLA when the city can spend money on engineers and baseball fields," Ludwig said. The city is building a baseball stadium on a bond program approved by voters.
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J-Dog wrote on Oct 30, 2007 8:01 AM:
someone wrote on Oct 30, 2007 8:19 AM:
Not already registered?
ProudVetHogFan wrote on Oct 30, 2007 7:59 AM: