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City Finance Director Predicts $1.25 Million Budget Gap in 2013

Revenue is not keeping up with expenses, he reports, and that can be expected to continue for the foreseeable future, reducing the city's options each year for continuing to fund the existing level of services.

An analysis by the city's Finance Department forecasts a shortfall of $1.25 million in next year's budget as revenue is expected to fall while expenses continue to rise.

That's based on a "cost-to-continue" study of current levels of municipal services.

The study, presented this week by Finance Director John Ruggini, looks at both known costs and predictions based on a range of factors such as the general state of the economy, the housing market and interest rates.

Ruggini also looked back at the past 10 years of actual revenues vs. expenses in reaching his conclusions.

His findings: Revenue to the city could drop by more than $400,000 in 2013, while expenditures would rise by nearly $850,000.

Unlike most years past, the cuprit this time is not in personnel costs. A $350,000 increase in regular pay is very nearly offset by a $325,000 reduction in costs for employee benefits, mainly through new contracts with firefighter and police officers.

Rather, the largest factor driving increased expenses is a transfer of about $665,000 to the debt service fund, partly due to increased capital spending but mainly to loss of interest revenue from maturing city savings.

On the revenue side, property tax revenues are expected to increase by less than $100,000 while, again, lower interest income and a reduced "applied surplus" from the General Fund offset that by nearly $850,000 in the negative column.

Increases in some areas, including hotel room taxes and fees, together totaling about $200,000, help soften the blow.

Ruggini said that the city had overcome a budget gap more than twice as large – $2.6 million – for 2012 and that a $1.25 million gap was "significant but not insurmountable."

He also assured citizens that the city remains financially strong, with a healthy General Fund and a AAA bond rating.

He warned, though, that each successive year in which the city must address shortfalls reduces the options for savings in the next.

Ruggini said he would follow up soon with a five-year outlook for the future, which he said "will continue to show expenditures persistently outpacing revenues, which only reinforces the need for sustainable budgetary strategies as opposed to one-time fixes."

John Jacob Jingleheimer Schmidt March 30, 2012 at 05:44 PM
Must be why Didier quit before her term was up. She ran the city into the ground and left a huge problem for the next mayor. Just another borrow and spend conservative.
Random Blog Commenter March 30, 2012 at 06:31 PM
JJJS. A completely ignorant and partisan comment. The city council passes the budget. The council a few years ago voted to borrow more money for capital improvements (which I agree with) and Tosans themselves voted via referendum to borrow money for a fire station (which I voted against). I will fault the council for voting to spend $1 million last year on playground equipment in Hart Park. That money would be handy right about now.
John Jacob Jingleheimer Schmidt March 30, 2012 at 06:56 PM
Partisan. Ask Didier yourself. She ran and held out as a conservative repub. You show your ignorance. The mayor drafts and submits the budget to the council and her cronies approved it. Borrowed millions for a new stadium and hides behind bleacher seat sales so fiscal conservative cred is intact. Borrow and spend. How typical. Didn't even finish her term just like Palin. How typical. Sure could use that money now.
John T. Pokrandt March 30, 2012 at 08:36 PM
JJJS: You beat me to it, Didier was indeed a republican partisan, no secret there. She chose to veto the worker contracts over saving us money to "stand with Walker" That little decision cost our city around $280,000 as workers continued under the old contracts. We did not get a better deal after Act 10 went through either, we got exactly what we negotiated.
John Jacob Jingleheimer Schmidt April 02, 2012 at 05:09 PM
Those very same 'conservatives' also tried to give Didier a six figure salary. Cronyism at it's worst.
Random Blog Commenter April 03, 2012 at 08:53 PM
Cronies here there and everywhere, huh? The council wields far more power in this city than does the mayor. So the council simply rubber stamped the budget? They didn't alter any budget line items? Mr Pokrandt, your partisanship over the GOP nominee contest spills over into your discussion of city issues, once again showing that Tosans made the right choice in February. With regard to the veto of the contracts--which were passed as part of five aldermen calling for a special meeting over a previously settled issue (no partisanship or politics on that move?). There were two acceptable courses of actions with regard to contracts--wait it out until it’s resolved or lock in something and potentially tie your hands for a few years. There were pros and cons to both decisions and the electorate was equally divided. You obviously preferred one course of action over the other, but your dismissal of the other side as purely partisan illustrates how you fail to grasp that there are other legitimate points of view and would probably fail to initiate a constructive dialogue between people on different sides. We now have two fine and able people running to be mayor. Both will work to make Tosa a better place and will have to put up with the partisan sniping promoted by the format of TosaNow and TosaPatch. Both people have contributed publically to Tosa for quite some time. They did not get their political start by tossing partisan rhetoric on the internet.
John T. Pokrandt April 03, 2012 at 10:20 PM
Random Blog Commenter: I find it odd that you only choose to complain about partisanship when someone makes a comment that doesn't agree with your view on an issue. You are being quite transparent while managing at the same time to be disingenous. I don't hide my political affiliations or views. I am a moderate democrat and I make no appologies for that. You can't go around calling out supposedly liberal viewpoints as partisan and calling conservative viewpoints non-partisan. I get that you didn't support my campaign and that is certainly fine but I'm not sure what you are trying to accomplish or who you are trying to convince.

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