The story of the 2012/13 proposed budget for the General Fund is this: it assumes a deficit of $2.3 million.
Why is that OK? Well, there are a couple of reasons:
- The General Fund balance at the end of FY 2010/11 was unexpectedly high due to deferral of some expenditures.
- We will probably run a small (and unexpected) surplus -- $700K -- in the General Fund for the current year.
We can afford to fund expansion this year by reducing the fund balance because the fund balance is greater than 25% of annual expenditures. It should be obvious to everyone that this is a one-time-only option. Next year we must find more revenue, reduce expenditure, or see our general fund sink below an acceptable reserve.
The council's job, at the highest level, is to decide whether we want to take our one-time option this year. Alternatives are fairly simple:
- propose higher taxes
- reduce or eliminate the additions in expenditure proposed by the city manager
- hope the economy gets better
This budget is on the city web site to be downloaded as a pdf file. The details are well hidden such as a large donation to a non-specified non-profit group! Where PEG channel money will be spent. etc. They do not want skilled observers looking at the details.
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