by Mike Sharkey
Staff Writer
The 2005-06 fiscal year has not gotten off to a good financial start for the City. According to the most recent quarterly financial report issued by the Office of the Council Auditor, the City’s general fund is anticipating an overall deficit of about a $5.7 million for the 2005-06 fiscal year that began Oct. 1, 2005.
“It’s hard to project what will happen over a year based on a few months, but it’s a warning flag,” said Council Auditor Kirk Sherman. “Some revenues have not come in as well as projected.”
The first quarter of the current fiscal year ended Dec. 31 and, according to the report, Sherman attributes the deficit to a projected revenue shortfall of $14.5 million. That deficit, Sherman projects, will be offset in part by spending reductions of $8.7 million. The report says the projected deficit could also benefit from further cutting costs and the implementation of a hiring freeze.
While the nearly $6 million projected deficit seems like a sizable amount to overcome, Sherman said the projection is based on one financial quarter with three left. He also said the deficit is actually a very small fraction of the City’s overall budget.
“That $5.7 million is coming from a fund with an $847 million budget,” explained Sherman, who has been with the City for 26 years and took over as Council Auditor at the beginning of the year when Richard Wallace retired. “We are only missing it by less than 1 percent, so we are doing pretty darn well. The good news is that we are only at the end of the first quarter and there’s plenty of time to recover.”
The report doesn’t include sales tax revenue generated during the holidays, money that may help make up some of the projected deficit when the next quarterly report comes out.
Another factor that eventually plays into the City’s budget, according to Sherman, is the weather, specifically the upcoming tropical storm season. While money has been budgeted to cover clean up costs in the event of a storm hitting the area as well as overtime costs for JSO, JEA and other emergency personnel, a busy tropical season will likely consume those funds and then some.
“When the economy is good, there’s more tax revenue and we are hoping for no hurricanes,” said Sherman, adding there are many variables that could affect the budget by year’s end. “It looks like we may be off about 1 percent, so we have to be careful. We will definitely monitor it. That’s why we do this every three months.”
The report also contains first quarter numbers from all the other agencies within City government including SMG, JEA, JTA, the Jacksonville Port Authority and several others. SMG is reporting a deficit of $645,000 due to unbudgeted utility rate increases. JEA, too, is reporting a deficit of a little over $1 million which the utility company attributes to a relatively mild winter.
One agency doing well is the Clerk of Court. According the report, the Clerk’s office is projecting a nearly $2.2 million positive budget variance due to better-than-projected revenues.