by Bradley Parsons
Staff Writer
Five days before Mayor John Peyton is scheduled to present a balanced budget to the City Council, a preliminary draft released Wednesday still projected City revenues to fall more than $20 million short of expected expenditures.
Peyton told the Chamber’s Governmental Affairs Committee Tuesday that he and his executive staff were working to close a $40 million budget gap. Two days later they appear to be halfway there. Peyton spokesperson Susan Wiles said Wednesday that Peyton and Chief Financial Officer Walt Bussells would use the time remaining to even the City’s ledger. City ordinances require the budget he presents next week to balance the City’s income with its expenses.
That task may not be as daunting as the numbers make it look. City Finance Director Cal Ray said the City had the necessary funds, but needed time to figure out how to spend them.
“Those numbers [$20 million] are true, but not accurate,” said Ray. “We have sufficient funds already in hand, we just need to weigh their allocation against future years’ requirements.”
For instance, Ray said $60 million is set aside for future procurement of City vehicles. Because the City has never spent more than $16 million in a year to buy vehicles, Ray said the City could invest that money or put it into its general fund.
“It’s a ready cash resource and we need to decide whether to leave it alone or put it to work more aggressively,” said Ray. “But we have to balance that against what we’ll do in future years and how that will be received by the taxpayers and the Council.”
The City currently lists just more than $760 million in revenues against $781 million in expenditures. Ray said both numbers would change by Tuesday, but said he couldn’t yet determine where they would meet. The expenditure number does not include a $14 million contribution to the City’s employee-pension fund. Ray said the City would meet that commitment.
The draft budget represents a $30 million increase from last year’s projected numbers. According to the draft, the City will once again spend nearly 40 percent of its money to protect its citizens. The City could spend more than $290 million on the police and fire departments, with the police receiving more than two-thirds of that money. The preliminary numbers for the sheriff’s office represent a $12 million increase.
Chief Operating Officer Sam Mousa [who resigned Thursday morning to return to the private sector] told a Peyton transition team subcommittee two weeks ago that the City would not “continue to throw money” at the Fire and Rescue Department’s problems, which include growing response times and deteriorating stations. The preliminary budget supports Mousa, allocating only a $2.7 million increase to the department.
Most of the departments received smaller increases. The Children’s Commission budget is slated to remain the same, while the Neighborhoods budget could shrink by $100,000.
Property tax revenues provided the the biggest revenue bump from the 2002-03 fiscal year, which closes Oct. 1. Larger-than-expected development drove ad valorem taxes up $9.4 million to more than $325 million total, about $1 million more than expected. Building Inspection Chief Tom Goldsbury said Monday that new home permits were up 25 percent in the first half of 2003.
The City also erased nearly $4 million from its projected expenditures by adding another year of service to a fleet of more than 400 sedans and pick-up trucks.
Balancing those black numbers on the City’s ledger were more modest State funding, a soft economy that hurt sales tax revenues and low interest rates, which shrank the City’s investment income from $4 million last year to a projected $3 million.
The draft also understates the City’s Police and Fire Pension contribution. Ray said the City would likely spend an additional $5.2 million to buy back thousands of days of leave accumulated by more than 200 officers and firefighters scheduled for a January retirement.
Peyton has six hours of budget meetings scheduled before his Tuesday address to the Council. But Ray said his budget staff and the mayor’s executive staff would work “right up until Tuesday afternoon.” Ray said his staff has worked this week from 6 a.m. until 8 or 9 p.m.