City deals with tight General Fund
There likely will be some difficult discussions in 2018 about revenue and services provided by the City of Yuma as the municipal government faces a budget crunch in its General Fund.
The Yuma City Council was scheduled to vote on the second reading of the 2018 budget ordinance at this past Tuesday night’s regular meeting.
It includes a General Fund in which the city is utilizing $212,000 out of reserves to meet all budgeted expenses. There still will be $1.5 million in reserves, but that could dwindle quickly if the city continues to use it to meet regular operating expenses.
City Manager Scott Moore said that initially the city was looking at a $900,000 deficit in regards to General Fund revenue and expenditures. However, that was shrunk considerably by a variety of means. The Yuma Police Department cut more than $100,000 from its budget, mostly by bypassing the purchase of two patrol cars in 2018.
Most of the rest had to do with transferring expenditures from the General Fund to the appropriate Enterprise Funds.
The General Fund covers city manager, city clerk/treasurer and front office personnel, the police department, street department, parks, recreation, fire department, the library and community center, the swimming pool,and the airport.
It is funded by sales tax revenue — which accounts for nearly half of the more than $2 million in revenues — property tax, specific ownership tax, severance tax, several taxes that generate minor amounts, highway users tax, police fines, recreation fees, community center fees, swimming pool receipts and concessions, and several other streams that generate relatively minor amounts.
Enterprise Funds are those that are paid for through utility rates — sanitation, electric, water, and wastewater — and the ambulance service, which is paid for by those who use it. Rising costs can be covered by raising utility rates when necessary, at least for Sanitation, Electric, Water and Wastewater. A total of $500,000 is transferred each year from the Electric Fund to the General Fund.
However, that still is not enough to cover the services provided through the General Fund.
City administrators cut the deficit spending for 2018 to $212,000 in large part through transferring expenditures from the General Fund to Enterprise Funds. The purchase of a street sweeper, for $255,000, is coming out of the Capital Projects Fund, which is separate from General or Enterprise, and the full-time salary of the person in charge of the street sweeper is transferred to the Sanitation Fund.
Also, portions of the city manager and front office personnel salaries are being transferred to the various Enterprise Funds for the time those employees spend on business related to those enterprises, such as billing.
Moore said the city will continue down that path, but it is not enough.
“The only answer for the General Fund is to get more revenue,” he said. “What we have done is not a complete answer. It continues to be a work in progress.”
One option going into future budget years would be to cut back on General Fund services. Moore said the more desirable option is to increase revenue, though he noted it will be up to the council.
“Our recommendation is to raise revenue somehow,” he said. “The city of Yuma does not want to cut services. We actually want to increase services.
“Overall, the city is healthy financially at this point, but we want to stay that way,” he added.
The best way to do that is to increase business within the city, thereby increasing revenue.
It no doubt will be a topic of conversation at council meetings in the new year.
Look for more on the 2018 budget in next week’s Pioneer.