Aldermen this week received the first look at the budget for fiscal year 2016 which starts January 1st.
Those preliminary numbers show the city will have a budget deficit of $997,211. Revenues are expected to increase next year by 1.1%, or $1,689,774, to $23,038,704. But expenditures are also expected to go up and at the much higher rate of 5.5%, or $4,647,296, to $24,035,915.
City Manager Todd Thompson said one of the biggest costs in the budget is personnel, which makes up around 75%. He said personnel costs are also expected to climb by $697,050 next year.
“Personnel costs that we have when you factor in raises that we negotiate with the unions, as well as increases in health care which is difficult to control,” Thompson said. Thompson said no new city positions will be added.
One potential solution to the rising cost is a new capital utility tax. Thompson proposed a 5% tax on gas and electric utilities that would be used for infrastructure.
“With the idea that a third of it could be used to bond projects, a third of it could be used to fund storm water needs, and then a third of it for ongoing capital projects,” Thompson said.
The tax is estimated to raise $2,350,000 annually and Thompson said it would cost the average homeowner an extra $99.90 per year.
Thompson told aldermen that annual costs for deferred infrastructure maintenance is around $2,450,000. He said each dollar not spent currently on maintenance could translate to $4 to $5 dollars in future repairs.
Aldermen will consider the proposal and other ways to reduce the deficit over the next seven months.
