|No Budget Crisis In
February 20, 1997
WEST COUNTY TIMES
$1.3 MILLION IN CITY'S RESERVES UNTOUCHED
Thursday, February 20,
RICHMOND Despite rumors to the contrary, there is no immediate budget crisis for Richmond, city officials have told the City Council.
The city will end the current fiscal year with its $1.3 million in reserves intact, Acting Finance Director Marla Taylor told council members during a mid-year budget review Tuesday night.
But some council members complained that the city was not taking a long-term view of its fiscal health.
"My biggest concern is not so much the general fund and tweaking it this way or that way, but big-dollar, long-term infrastructure and capital improvement obligations," Councilman Tom Butt said on Wednesday. "I think that's where a city lives or dies."
City Manager Floyd Johnson told the council the city is "in fair shape," though there are some areas that have revenue shortfalls.
Revenues for the fiscal year ending June 30 are down by about $560,000, Johnson and Taylor said in a written report on the budget. That's out of the total general fund budget of $66.8 million.
The better news is that spending is about $375,000 below budget, the report said.
The city would have saved even more money if the number of employees taking an early retirement offer had been as high as expected, the report said.
City officials had predicted that 19 positions could be eliminated through the retirements. But only nine people took advantage of the opportunity. They had until today to do so.
The good news, according to officials:
*The port deepening scheduled to begin soon will bring short- and long-term benefits to the local economy by encouraging more and larger ships to use the channel.
*Transfer tax receipts, collected when property changes hands, may exceed the city's original estimate by $125,000.
*The resurgence of development and sales in the marina area, as well as the settlement of several lawsuits, has allowed a south Richmond redevelopment area to increase its debt repayment to the general fund by $500,000 this year.
The budget's down side:
*Utility user taxes, an 8 percent tax on electricity, gas and telephone bills, brought in less money than predicted this year. The city expects to get about $500,000 less than originally estimated.
*Sales tax receipts have been "disappointing," owing to the closure of Toys R' Us and the Emporium, and were adjusted downward by $500,000, officials said. That is expected to improve with the opening of the new Hilltop Plaza shopping center, the new Pacific East Mall moving into the former Breuner's site off Pierce Street and other construction.
*Business license revenue has slipped and will bring in $100,000 less than expected.
Councilman Alex Evans said he would have liked to have had five-year projections included with the mid-year review.
Evans did his own estimates. Unless the city cuts $1.5 million from the budget this coming year, it will have a $10 million deficit five years from now, he said.
Johnson said five-year estimates weren't included because the longer the projection period, the less reliable the figures. He also suggested the council will discuss long-term plans in more detail at its retreat Saturday.
Butt went a step further than Evans calling for an assessment of the city's infrastructure and capital improvement needs over the next 10 to 15 years. Major fixes "are just not planned; they're not funded," he said.