DeKALB – Despite announcing a previously unrealized $1.8 million budget gap Nov. 20, city officials said Tuesday that the actual gap is about
$1 million less, and in reality is about $887,000.
At a joint budget meeting of the City Council and Finance Advisory Committee, interim City Manager Raymond Munch said that since the
Nov. 20 meeting, city staff have been taking a daily look at the fiscal 2019 budget and the city’s five-year budget forecast documents.
Through what Munch called an “exhaustive process,” a new funding gap number was revised.
“We’re not confident it was ever really $1.8 million because there were errors in the budget that were never realized,” Munch said. “We continue to find items that we didn’t anticipate or were inaccurate, and on a near daily basis, we would take a look at the budget and find something we didn’t expect.”
Munch said the latest discovery was found Monday night, and therefore was not included in the agenda packet before Tuesday’s meeting. The updated budget information was sent to the council but not the committee before the meeting.
Munch said city staff identified about $160,000 in expenditures last week that was carried forward into the fiscal 2019 budget from 2018, which was in error because they were not recurring expenditures.
Munch also said city staff identified a $450,000 transfer from the city’s capital fund to the general fund for a planned 2018 purchase of a dump truck that never was bought.
“It was budgeted for but never came to fruition,” Munch said.
The already-known $1.6 million deficit going into fiscal 2019 has been addressed since budget talks began in July.
The breakdown of the currently proposed budget balancing measures is listed below, and will go up for a first-reading vote by Monday.
“We want a budget by the end of the year,” Mayor Jerry Smith said.
He also said the incoming city manager, when hired, will be tasked with bringing his or her own ideas to address the deficit.
“I think, frankly, what we’ve done tonight will be very positive for the applicant,” Smith said, indicating his plan to share updated budget numbers with city manager candidates during Thursday’s planned closed session interviews.
The committee and council came to a general consensus Tuesday to amend the balancing measures slightly, and proposed not cutting $10,000 to the DeKalb County Convention and Visitors Bureau. A recent presentation by the bureau’s executive director, Debbie Armstrong, made it known that every $10,000 the bureau raises locally can be matched by the state; therefore, any cuts to the organization from the city of DeKalb would result in a double loss.
Additional considerations included not cutting the previously agreed-upon snow removal services for sidewalks in the Central Business District; implementing an amusement tax that could bring in $120,000 annually; implementing a ¼-percent increase on the Restaurant, Bar and Packaged Liquor License tax to provide a $250,000 annual revenue stream; or implementing a home rule sales tax increase of ¼ percent.
City officials are recommending a combination of three options to alleviate the existing $887,000 deficit: additional expenditure reductions, additional revenue increases or a fiscal 2019 with a fund balance shortfall.
“We overspent this year, and we didn’t hit the targets, nor did we hit the revenues that we expected,” 1st Ward Alderman David Jacobson said.
The group also gave a positive consensus to implement a six-month hiring freeze, which would include a number of already-vacant city positions, closing the budget gap by $478,310.
City staff, committee and council members emphasized that the freeze should not include certain emergency personnel positions, specifically within the police, fire and public works departments.
A formal vote has not yet been taken for the fiscal 2019 budget. A public hearing and first reading vote for the budget is scheduled Monday. A second reading to vote on the budget is planned for a special council meeting Dec. 18.