By SHANNON HAUGLAND
Sentinel Staff Writer
The Assembly at a special meeting Thursday will be asked to provide direction on the fiscal year 2022 budget.
“We’ll be looking for ‘big picture’ guidance from the Assembly, on how they want to run our budget this year,” City Administrator John Leach said.
The meeting starts at 6 p.m. at Harrigan Centennial Hall, and will be available for remote access on the city website.
City Finance Director Melissa Haley has prepared a PowerPoint to review some of the budget challenges the city is facing, including a steep drop in sales tax revenues, after COVID-19 eliminated the cruise ship season, and hit the visitor and retail sector as well.
Haley said she and Leach will be looking for guidance on some of the major questions about rate increases, capital projects, provision of services, and dipping into reserves.
“We want to come forward with a budget that’s reflecting what they’re looking for,” Haley said. “We will have a couple of different meetings on different aspects of the budget - this is a pretty ‘big picture’ (meeting). But we anticipate that there will continue to be a significant revenue reduction at least for the beginning of FY 2022.”
(Fiscal year 2022, starts July 2021 and runs through June 2022.)
The main question is whether to budget to match projected revenue, maintain current services, “or somewhere in between,” Haley said.
“We’ll do our best in projecting revenues, but at the end of the day if we budget ‘status quo’ we’re likely to have a deficit budget,” Haley said. “We have to have a balanced budget.”
The city always has the option of dipping into reserves, if the Assembly chooses to keep services at the present level, and balance the budget. Haley said capital projects took a hit in the current year from previous years’ budgets, in order to balance the budget.
City hall also tightened its belt in various ways to help with the shortfall in the general fund, she said.
“It’s still early, we’re still developing the budget,” Haley said. “This is just getting feedback from the Assembly on general direction, so when we bring back the budget it’s what they want. We know the Assembly will be extra sensitive about the impacts of rate increases on ratepayers. ... It’s always a tradeoff.”
Besides the challenges brought on by a decline in sales tax from 2019 to 2020 due to COVID, the city is also seeing declining state revenues, particularly related to school bond debt reimbursement.
Leach said the Home Rule Charter provides guidance of the city’s obligation to fund public safety, education and infrastructure. Over the years, the city has funded other programs as well.
“What do we want to keep doing?” Leach said.
