Dunlavy presented the Tooele City Council with a proposed balanced budget for the 2009-10 fiscal year at a special city council meeting held May 13. The mayor said declining revenue projections necessitate a reduction of approximately $1.6 million from the 2009 general fund budget.
The general fund covers city administration, police department, fire department, animal control, streets and public works, parks and recreation, library, cemetery, and community development. Sewer, water, and solid waste disposal, along with RDAs and special road projects, are covered in other funds whose preliminary budgets are not available at this time.
Dunlavy said he would not propose an increase in fees for city services, nor would be make taxpayers bear the burden of declining revenues.
“The current recession makes this the worst time ever to raise taxes,” Dunlavy said. “The budget will not have any tax increases.”
To balance the budget, Dunlavy has proposed several new spending cuts in addition to those he initiated earlier this year, such as an early retirement option, reduction in travel expenses, and a general review of all expenses.
“We go into the budget with eight fewer city staff positions than last year,” Dunlavy said. “That’s the result of the early retirement program and natural attrition. Further staff layoffs should not be required.”
For the second year in a row, all elected officials will receive no salary increases. However, that salary freeze will extend this year to all city employees. There will be no cost-of-living adjustment or merit increases for any employees in the new budget, Dunlavy said. In addition, the city will eliminate the 8 percent matching contribution it makes to employees’ 401(k) retirement plans.
“In addition to the employee expense cuts, every department will have a reduction in their expenses,” Dunlavy said. “We will have to become a leaner organization, doing more with less.”
The largest budget cuts were nearly $432,000 in legal fees for two major lawsuits — one with Grantsville City and the other with the developers of Overlake — that are expected to be resolved soon in court proceedings. Also, streets and public works will be stripped of $238,000 — down 14 percent from last year.
The budget does not allocate funds for new major capital projects or new equipment purchases. Construction on 1000 North will continue, as it was funded last year, and the city also received money from the federal stimulus package to extend the road all the way to SR-112.
“There will be some projects funded through the parks, art and recreation tax,” Dunlavy said. “But even those will be lower than last year as the PAR tax is based on sales tax, which is down.”
The largest drop in city revenues will come from sales tax collections, which are expected to drop by $136,000, or 3 percent, in the next fiscal year.
The mayor’s budget also calls for dipping into the city’s rainy day fund to the tune of $686,000 to balance the budget. That would leave a fund balance of $1 million — only a bit above the $653,000 minimum fund balance required by state law.
In the current fiscal year, the rainy day fund was tapped for $543,000. That was the first year the city had to use the rainy day fund to balance the budget, according to Glenn Caldwell, Tooele City finance director.
The budget for this year called for $1.5 million to come from the rainy day fund, but the city sold property it owned in its industrial park to the Depot RDA. This resulted in one-time income of $950,000 to the city general fund that helped offset decreased revenues.
The city council has not scheduled a public hearing to discuss the proposed budget yet. Their next scheduled meeting will be June 3 at 7 p.m. in the council chambers at Tooele City Hall.
Tim Gillie: tgillie@tooeletranscript.com
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