City faces budget crunch

Lower revenues and increased need may leave the city facing financial shortfalls during the next 18 months, according to officials.

"We didn't anticipate a 7 percent reduction in revenue when we compiled the budget," said City Manager Linda Ritter.

The Board of Supervisors will be presented with the information during Thursday's meeting.

In the first quarter of 2007, projections indicate the city will take in 7 percent less tax revenue than during the same period in 2006: $5.6 million versus $6 million.

Longer-term forecasting indicates the city government will need 3 percent more money than the projected sales tax collection total of $22 million during this fiscal year, ending June 30 - a need for $1.6 million more.

And during the next fiscal year, the forecasted sales tax revenue is $23.1 million, but the need is expected to be 5 percent higher. This translates to more than $3 million in additional revenue being required to make ends meet.

The projections are based on the city providing the same level of service it does now under similar circumstances. This is why Ritter is asking department heads to look at each of their operations and find ways to reduce costs.

The long-term goal is shaving off 5 percent of expenses by 2008, she said.

"You need to anticipate the possibility of reducing the budget in response to a decline in revenue," she said. "And if we can do something now, we're going to do it. We don't want anybody to lose their job."

Supervisors also are being asked to determine whether the city should continue paying for four specific positions. Ritter is asking for money to keep people in these jobs through March 1.

The cost to provide a citizens outreach coordinator, a job created in January to improve relations between the city and ethnic groups, comes from city funds. Duties related to this job are being overhauled, and the search is on to fully fund it next year, she said.

Three other positions were funded by grants but are now paid for by the city: The community safety and education coordinator, who educates the public about fire and other safety issues; the alternative-sentencing officer, whose job is to supervise defendants awaiting court sentencing; and the domestic violence coordinator, who works on these cases for the District Attorney's Office.

In 2003, the city experienced a revenue shortfall after big-box stores Kmart and Wal-Mart closed. Money leftover from the previous year was used to close the spending gap, however.

Supervisors can no longer tax their way out of a deficit. All Nevada communities have limits on how much they can increase property taxes each year: 3 percent on homes and 8 percent on rental and commercial buildings.

"This makes it more important for the city to live within its means," she said. "Government is more susceptible to business cycles and the economy than it used to be."

This closer tie to overall economic conditions also means circumstances are ever-changing and that things could improve over time, she emphasized.

Total savings resulting from a voluntary job buyout program, started this year as a pilot venture, still is being determined. Four employees came up with viable ways to eliminate their jobs, Ritter said.

"This is our opportunity to re-engineer the way we provide service," she said.

The city's budget comes from two sources: general and enterprise funds. These discussions are about shoring up the general fund, which is $55 million this year. General government, public safety, culture and recreation are among areas that fall under this classification.

The enterprise fund comprises the remainder of the roughly $115 million total budget. Utilities, ambulance services and the landfill are among operations within this category, and are financed mostly through direct billing.

Ritter expects to bring the supervisors some budget solutions devised by she and department managers during the Jan. 18 meeting.

• Contact reporter Terri Harber at tharber@nevadaappeal.com or 882-2111, ext. 215.

If you go

WHAT: Board of Supervisors meeting

WHEN: 8:30 a.m. Thursday

WHERE: Sierra Room, Community Center, 851 E. William St.