Newton City Commissioners will again be faced with the choice to either raise taxes or cut services, city staff members reported during a budget work session Friday.
Departments' 2014 budget requests came in at $17.9 million in expenditures with about $16.2 million in revenues, leaving the city about $1.7 million in the red.
“We just cannot adopt a budget that looks like this," said Lunda Asmani, assistant city manager for budget and finance, who provided an outlook on the 2014 budget to commissioners. "We’ll have to look at both sides of the coin — look at revenues, look at expenditures — and see how we can adopt a balanced budget.”
Asmani said while departments were asked to hold their 2014 budgets at 2012 spending levels, providing services for 2014 at 2012 levels creates some challenges. Departments were able to make it through 2012 by ignoring facility needs, ignoring staffing needs, and not fully accounting for equipment replacement costs — but expenses can only be put off for so long.
Right now the city has an A1 credit rating and about 30 percent in reserves — an indication the city is financially healthy, Asmani said. However, state and federal funding reductions, along with a loss in interest revenue — down from about $450,000 in 2007 to $8,000 just a few years later — have taken their toll.
Program cuts can save money over time, but may have negative consequences for the community, such as:
· Public works eliminated the $100,000 sidewalk program.
· The police department has had to cut down on its visible presence in the community designed to deter criminal activity, though calls for service have doubled.
· The airport manager and airport line supervisor positions have been consolidated, at a time when the airport is expanding.
To balance the budget for 2014, Asmani said the city will have to consider increasing revenue, such as the amount of property taxes or sales taxes, or look at decreasing services. The city commission will need to make priorities: what are services the city must provide, and what services would merely be “nice” to provide? The budget needs to be aligned with the city’s core values.
“We’re putting everything on the table as part of this conversation,” Asmani said. “… This process is about aligning the budget with our values.”
The budgeting process began in February, when staff started looking at preliminary revenue estimates and how the city closed out 2012. The city manager and the budget team met one-on-one with departments to talk about requests, and at the upcoming city budget fair June 18 at the Newton Rec Center, community members can visit with city service providers and commissioners and talk about the budget and the direction of the community. A public budget hearing will be conducted, and a budget will be adopted later this summer.
City staff urged commissioners to gather as much information as they could from a variety of sources before making a budget decision, so they could have a complete picture of the organization's needs.
“You’ll hear things from family, you’ll hear things from friends, you may get letters," Asmani said. "You have to take all of that with a full understanding of the organization. You have to make informed decisions. … It’s a collective effort, sharing the information, getting the facts.”
Commissioner Racquel Thiesen reminded her fellow commissioners the discussion was not just about dollars — it was about setting policy.
“The decisions we’re making aren’t just about money," she said. "It’s about the will and the interest of the community. It’s about the long-term implications of the decisions we’re making. ... What is my role as a city commissioner, what did I commit to when I put my name on the ballot? Part of it is being a financial steward, but part of it is being a steward of the community vision.”
Commissioner Glen Davis said sometimes smaller expenses can distract from bigger priorities.
“I think we need to start thinking about how we spend these little amounts of money that add up to big amounts of money," he said.
Commissioners plan to continue discussing budgeting options.