Athens city budget looks to shrink from last year's

Athens City Council is gearing up to start introducing 2010 budget ordinances in the coming weeks after going over figures in a finance and personnel committee meeting Monday.

City Auditor Kathy Hecht told council members that the city's anticipated revenue in the general fund comes in at $10.8 million and the actual general fund budget for 2009 was $11,905,000. This suggests that further cuts will be made.

"With the amount of carryover that we're looking at, that does mean cuts in the budget, in the general fund," Hecht said. "We've been talking about that, but just to give you some perspective on the numbers. We do expect our budget is always more than the actual new revenue. But as I've said, we're more worried about the carryover."

Hecht told council that her estimates skew in favor of being very conservative.

"If we get some extra money and things start coming in, that's all great," Hecht said. "But rather than plan for that, this would be the bare bones to start with."

At-large council member Jim Sands talked about moving around funds so that some money would come out of the general fund and other money would start flowing back into it.

After the next committee meeting in two weeks, he added, all of the details will be flushed out. Currently, Mayor Paul Wiehl is working on his expenses, Sands said, and Service Safety Director Paula Horan Moseley is talking to department heads about their expected budgets.

Hecht said that the city's personnel budget is pretty much set at this point.

Sands said that now it's just a matter of putting everything together over the next 10 days into a real budget document.

Hecht warned City Council this fall about a small amount of carryover from this year's budget to next year's. She has explained previously that carryover money is used in January to pay bills and payroll, and make first-of-the-year purchases.

Carryover should be about $1 million, or 10 percent of a $10 million budget in the general fund, Hecht explained. She said the minimum that the city would want for carryover would be $600,000 to $700,000, which is where it stood when she started as auditor in 2004. Since then, she said, it has gone back up to around $1 million.

This year, Hecht told council previously, she is projecting a best-case scenario of around $500,000 in carryover.

This figure is up from August, when she said she was projecting between $200,000 and $300,000 in carryover. First-of-the-year payroll comes in at $350,000, Hecht told Council.

"Half a million is really not enough, bare bones to start the year for the general fund," Hecht said before. "It seems like a lot of money but the million-dollar carryovers... is really what we aim for."

Hecht also told council members that the city won't be able to use this year's spending amounts for the 2010 budget, since the budgets increase from year to year.

"Using this year's budget for next year, we won't have enough money. The budget will of course increase this year (unless cuts are made), as they do from year to year."

At this point, Hecht said, city officials are trying to keep expenditures down through the rest of this year.

"I guess the main thing I want City Council to keep in mind is that personnel is the major cost to the general fund," Hecht said, adding that this accounts for 78 percent of the general fund budget.

Out of an $11.9 million budget, Hecht said, payroll accounted for $9,495,000.

"When it comes to things like new vehicles, repairs, additional expenses... that's not very much money to tide you over for a whole year," Hecht said. "As you know it's up to council to approve the budget and make changes in the tax mix or staffing ordinance if necessary."

The tax mix is how the city's income from tax revenue is divided among funds. Hecht said that the city's general fund currently receives 74 percent of the tax revenue. The streets department gets 19 percent, while recreation gets 5 percent and the capital improvements fund receives 2 percent. Each percentage point, Hecht confirmed at the meeting, represents between $70,000 and $80,000.

As for the budget for next year, Hecht told council that she expects revenue to be fairly flat. This compares to a 7 percent increase in revenue this year from last year.

"Every year there really is an increase in revenue but there's just nothing on the horizon that looks like it's going to be substantial at all, especially in the general fund, which relies mostly on income tax receipts," she said.

The city's fiscal year coincides with the calendar year, so the city budget must be finalized by the end of December. With three readings needed for passage, council likely will introduce some sort of budget in November.

In February, City Council trimmed $460,000 from the 2009 Appropriation Ordinance after projecting a $1 million shortfall in the city's 2010 budget due to the struggling economy.

Council President Bill Bias explained at the time that one reason for the city's budget shortfall is that Athens is no longer seeing tax revenue from major construction projects that have taken place over the past couple years, including the new Ohio University Baker Center and the Holzer Clinic.

At the time, Mayor Wiehl said any eventual personnel cuts from the city would likely affect overtime hours first, seasonal employees next, then part-time employees. Cutting into staff levels would erode essential city services, making it a last-resort option the city is looking to avoid, he said at the time.

The city has also combined its street, water and sewer departments into one public works department in an effort at cost-saving, as well as implemented an employee travel and training expenses freeze.