City reports operating shortfall

Dan Kulin

Wednesday, Jan. 8, 2003 | 11:07 a.m.

The City of North Las Vegas saw expenditures exceed revenues by $4.1 million last fiscal year, and is projected to continue to see costs exceed annual income over the next two years, according to city projections made public Tuesday.

The operating shortfalls in the city's $97.8 million general fund are covered by the city's fund balance, which is carried from year to year and was about $10.9 million on July 1, 2002, the beginning of the current fiscal year.

Councilwoman Shari Buck said she didn't know if the council will raise property taxes again, but she said before taking that step she would like to "explore some other avenues for increasing revenues," such as raising licensing and permit fees.

"We've done pretty well considering the state of the economy and luckily we had a lot put away for a rainy day," said Buck, who described the fund balance as a rainy-day fund.

The general fund, which pays for departments such as police, fire and parks, and receives money from state and city taxes.

The council raised property taxes 3.24 cents for the current fiscal year, setting the tax rate at about $3.39 per $100 of assessed value, city Finance Director Phil Stoeckinger said. Under this rate a property owner with a $150,000 home pays about $1,800 a year in property taxes, he said.

One of the budget scenarios presented Tuesday showed how the revenue figures would be affected by another 2-cent property tax increase, which would add less than $10 to the tax bill of a homeowner with a $150,000 home, Stoeckinger said.

The possible 2-cent tax increase, which would bring in an additional $500,000, was put out there "just for consideration," he said. The increase will not necessarily be included in the city manager's proposed budget or the final budget adopted by council, he said.

"But we need to look at additional revenue enhancements," Stoeckinger said. "It's going to be a very tight budget year."

The major reason expenditures outpaced revenues last year and probably will in the coming years is the economy, City Manager Kurt Fritsch said.

"Sept. 11 is what happened," he said.

Tax revenues, especially from the sales tax, have been flat. Meanwhile, the costs of providing services to the fast-growing city have continued to increase, Stoeckinger said.

Stoeckinger presented the financial figures and projections to the City Council on Tuesday. The projections showed expenditures exceeding revenues by $2.8 million in the current fiscal year, which ends June 30, a $4.9 million shortfall next fiscal year and a $1.1 million shortfall in the 2004-2005 fiscal year.

Among the financial projections distributed to the council was a chart showing what the final budget numbers would be if the council decided to raise the property tax rate by 2 cents for the coming fiscal year. Under that scenario, expenditures would be $2.7 million above revenues in the 2003-2004 fiscal year, and revenues would be about $630,000 above expenditures in the 2004-2005 fiscal year.

As city manager, Fritsch is responsible for presenting a proposed budget to the council in April. The council must pass a budget in May for the fiscal year beginning July 1.

Fritsch said whether a 2-cent tax increase is part of his proposed budget will depend on feedback he receives from the council.

Fritsch said additional money could be brought in by raising licensing and inspection fees.

"We know it's tight this year but we still believe we're very sound fiscally," Fritsch said. "We certainly feel we can manage this without cuts."