The city of Waxahachie, facing a revenue shortfall of more than $1 million for the 2009-2010 budget year, is being forced to make additional cuts to an already-lean proposed budget.
Those cuts include a reduction in force of seven full-time positions and no capital expenditures in the coming year. Employees also will take 12 unpaid furlough days.
Even with the above-mentioned and several other cuts, the city also will need to draw about $428,000 from its reserve funds to address the shortfall, which has been triggered in large part by decreased sales tax revenues.
The budget, as proposed and pending council approval, does not include an increase in the tax rate.
City Manager Paul Stevens will review and discuss the proposed budget with council members during a workshop Monday night.
“The changes must still be approved by the city council, prior to the adoption of the budget,” Stevens said Friday.
Under the current economic situation, Stevens said the city has seen a dramatic drop in sales tax revenue as well as in franchise payments, building permit fees and other major revenue sources.
Sales tax revenue accounts for about 40 percent of the city’s budget, with franchise payments at 14 percent and building permits and fees at 4 percent.
The 2009-2010 proposed budget projects sales tax revenues of $7,412,000 – which is less than the $7,928,616 received in 2007-2008.
The decrease in revenue has necessitated major budget cuts for the new budget year, which begins Oct. 1.
All departments have made cuts in maintenance, supplies, professional services and overtime compensation, Stevens said, noting cuts also in training for personnel, with the exception of what is mandated for certain licenses or certifications.
Under the cuts to personnel costs, the five full-time positions where there is an employee in place include a public works inspector, two building inspectors, a clerk in the building inspection department and a clerk in the city secretary’s office. The two vacant positions eliminated in the proposed budget are in the public works and parks and recreation departments.
Sixteen seasonal positions in the parks and recreation department are eliminated in the proposed budget, which also calls for 12 furlough days for all employees.
“We’ve taken a very close look at the proposed budget and even after significant cuts were made, there was still quite a deficit. Unfortunately, that deficit made it necessary to look at a reduction in positions and plan for unpaid furloughs for all employees,” Stevens said.
The employees that are in the eliminated positions will remain employed until Sept. 30, when the 2009-2009 fiscal year ends. The employees will be eligible for unemployment benefits.
The furloughs affect all employees – including the police and fire departments – and will begin Oct. 1. The days off without pay will be spread throughout the fiscal year on a rotating basis, with city offices to remain open as employees spread the workload.
“We want to make every effort to schedule the furloughs in a manner that would least impact the level of service provided to the citizens, as well as remain convenient for the employees who are making these sacrifices,” Stevens said.
As proposed, two of the furlough days include Christmas Eve and Good Friday, with city offices closed on both of those days.
The city could receive a grant this year for a third fire station, which would require matching funds to be put up. Even if that amount also is taken from the fund balance, the city would still have 91 days of operating funds available, Stevens said.
The city remains fiscally strong, even with the tough decisions that have been made, he said.
“These budgetary and personnel changes will help to position the city to remain financially sound through these times of economic uncertainty and be poised for a stronger economy,” he said. “I believe our citizens will observe how the city employees pull together and make sacrifices to serve our community.”
A memo sent by Stevens to council members indicates the city addressed a $2 million shortfall in revenues that developed during fiscal year 2008-2009 by cutting expenses – an effort that will allow the city to finish “very close” to a balanced budget.
Knowing there would be issues with the 2009-2010 budget, department directors were previously instructed to submit requests along two lines: one 2.5 percent less than the 2008-2009 budgeted amount and one 5 percent less than the 2008-2009 amount.
“Many directors submitted budgets that were actually greater than a 5 percent decrease from the current year,” Stevens wrote.
Even with the departmental budget decreases, a $1 million shortfall remained, necessitating the additional cuts.
Stevens said the city is hopeful sales tax revenues will rebound in the coming months, in which case the budget could be amended with the positions possibly added back and the furlough days eliminated.
Although the eliminated positions are in departments (building inspections and public works) where the workload has decreased due to the economy conditions, it’s likely when the economy rebounds, that those positions will be needed again, he said.
“However, it will come at a time when all other cities in the region are recovering and all will be competing to fill these types of positions,” he said. “During this time period, these services are likely to be negatively impacted to some degree until qualified people can be hired.”
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