City budget bleaker than first thought

Wednesday, May 13, 2009 | 5:02 p.m.

Vicki Mayes

Boulder City Council

Boulder City's two employee unions have agreed to wage concessions expected to save the city $360,000.

But that and other savings designed to close the city's $1.1 million gap in its 2009-10 budget, which begins July 1, won't help much after all, City Manager Vicki Mayes said.

The reason: The economy has worsened, and the city has to scale back its revenue estimates for next year by about $350,000.

"So we are back to Square One again," Mayes said.

Mayes was briefing City Council members this week on the new projections, which the city received about 10 days ago, and has started scouring through the budget looking for additional savings.

The City Council will hold a public hearing on the final budget at 7 a.m. May 19 at City Hall, 401 California St.

The first draft of next year's budget showed that the $3 million ending fund balance, which serves as a reserve account for the city, would be depleted by $1.1 million.

"I received the message loud and clear that they were not comfortable, nor am I, to draw down the fund balance by one-third," Mayes said.

The city sought and received wage concessions that spread next year's cost-of-living raises of 4.5 percent for city employees and 5 percent for police over two years, she said. That saved $360,000.

Another $140,000 to $200,000 was saved by switching Boulder City Golf Course maintenance to a contract rather than paying city employees to do it, Finance Director Timothy Inch said. The city received the cooperation of the Teamsters Union Local 14, which represents city employees, on that change as well, he said.

As part of the agreement, the city agreed that it would not seek layoffs unless the ending fund balance dips below $1 million, Mayes said.

The city in December started with low estimates of consolidated tax revenue figures because of economic conditions, Inch said. The consolidated tax combines sales and other taxes that are funneled through the state back to municipalities.

While other municipalities saw great declines in that revenue as early as February, Boulder City had declines of only 2 percent in February from last year, Inch said.

However, the April figures showed revenue would be down 8 percent from a year ago, he said.

"That forced us to make adjustments to next year's numbers," said Inch, who added it may not be the last adjustment in revenue the city will have to make.

And Mayes is still looking nervously toward Carson City and a bill that would redirect county revenue to the state. Mayes fears the county will then raid city coffers to make up for its deficit.

That leaves Mayes looking for more reductions in a budget she says is already lean.

"There's not a lot for me to work with," she said.

Her plan so far is to leave positions open as long as possible and perhaps not fill some positions in an effort to reduce staff through attrition.

It's not a hiring freeze, she said, but any position that can be deferred will be, "even if it results in a reduction of service."

She said the city does have some bright spots in its economic future as it moves toward more leases in its energy zone in the Eldorado Valley, but those will not help next year's budget.

"We are working hard to bring in revenue as quickly as possible," she said.

She also praised Teamsters Local 14 and the Police Protective Association for their cooperation.

"Our employees came to the plate," she said.

Teamsters Local 14 President Larry Griffith was satisfied with the agreement.

"The last thing we want to do is to be a strong arm and put people out of work during hard economic times," he said. "They're still working and still have benefits, and that's a win from my chair."