Henderson financial update brings good news and bad

By Jeremy Twitchell (contact)

Wednesday, Oct. 7, 2009 | 2:05 a.m.

Gerri Schroder

The Henderson City Council’s monthly financial update brought good news and bad news Tuesday night.

The bad news? Tax revenues have continued to fall more steeply than the city’s most dismal projections. July’s consolidated tax revenue, which comes from sales and other taxes and provides about one-third of the city’s general fund, fell 19.22 percent from the previous year, exceeding the city’s projection of a 15 percent drop.

The city brought in a little more than $5.5 million in consolidated tax revenue in July — about $1.3 million less than it brought in during the same month last year and $2.1 million less than it brought in during July 2006.

The good news? The city’s independent Development Services Fund — the money it collects from building and other permits — appears to have stabilized, with four steady months after more than a year of decline.

And despite the lower-than-expected tax income, the city’s budget-reducing measures are holding, and the Council didn’t have to make additional cuts.

“We’re still OK, for now,” Councilwoman Gerri Schroder said.

In August, Council members approved the first tier of a three-tier plan to reduce the city’s budget, by reducing departmental budgets across the board and eliminating several line items.

Schroder said the tier-two cuts, which would include cuts to municipal services, are still being worked out and are weeks or months away, should they become necessary.

“The staff is still looking to see what could be cut,” she said.

The tier-one cuts approved in August were the latest in a series of budget-reducing moves the Council has made over the past year. Other steps have been to delay capital projects, tap reserve funds, buy out longtime employees, institute a hiring freeze for positions not deemed critical and slash department budgets.

Henderson’s Finance Department is projecting another 15 percent decline for August’s consolidated tax revenue, followed by a slight improvement to 10 percent declines in September and October.

The department projects the decline in revenues leveling out in February. Consolidated tax revenues are calculated and distributed on roughly a two-month delay.

Despite the news of a 29th straight month of decline, Schroder said she remains hopeful. The worst declines began in September and October of last year, she said, and she hopes small flickers of recovery will bring about an end of the double-digit tax revenue declines in this September and October.

“I’m an optimist,” she said.