Over the next few weeks, the Augusta Commission will have to deal with the fact that the proposed $145.8 million general fund budget for 2014 is currently out of balance by about $3.9 million.
But the news gets worse.
Of the proposed $683.7 million total budget for the city (including capital projects, general funds, special revenue funds, debt service funds, enterprise funds, etc.), there is a $8.5 million shortfall between the estimated revenue and expenditures for 2014.
Facing these numbers, City Administrator Fred Russell said the commission will have to make some difficult decisions on whether the city should cut programs and services or find other means of revenue.
“There are ways to save money,” Augusta Commissioner Wayne Guilfoyle said. “The only way to do it is to reach out to the department directors. They know their departments better than anybody else.”
“What this is is a continuation of conversations we started several weeks ago in which we talked about the things that we need to do, the things that we want to do, the things that we have to do and the things that we can afford to do, which are all not the same,” Russell told commissioners on October 15. “This budget, as in the past, is not balanced.” Russell explained to the commissioners that they were not required to balance the budget until mid-November.
“We don’t have to have it balanced today,” Russell said. “But on November 19, we have to have it balanced, basically. And you will notice that the general fund is out of balance by $3.975 million.”
Generally, Russell said for the past several years the commission has started its budget discussions with an unbalanced budget.
“Last year, we were out of balance by about $3 million,” Russell said. “The year before that, $4 million (out of balance) in the general fund.”
In his October 15 budget letter to the commission, Russell said he made the following assumptions regarding the city’s revenue projections: there would be a zero percent growth in the tax digest; the city would implement an energy excise tax to offset the decrease in sales tax revenues of an estimated $1.5 million; and the commission would use $3.5 million of the city’s fund balance.
While several commissioners have voiced concern over using some of the fund balance, Russell said he was “comfortable” with allocating the $3.5 million to help balance the 2014 budget, but hopefully the city would not have to use that budgeted money.
“That is the rainy day fund,” Russell said, referring to the fund balance. “Last year was the first time we actually had to tap into that.”
The government also needs to consider financially rewarding its city employees for all their hard work, Russell said.
“Governments are a service industry at the most essential level,” Russell wrote in his letter to commissioners. “The method by which these services are delivered is through our employees. These services include: protecting our citizens’ safety and property, providing
infrastructure, producing clean water to drink, lighting the streets at night, and improving their quality of life through recreation and culture just to name a few.”
Russell said he has often heard commissioners say that it is their desire to “hire and retain the best and the brightest employees.”
Therefore, Russell’s proposed 2014 budget includes a $1,500 cost of living adjustment for each and every city employee.
While Russell said he also considered an across-the-board percentage increase, he did not feel those employees with lower annual salaries would benefit enough.
“The across-the-board (percentage increase) doesn’t impact the lower-paid people the way I wanted it to, at this particular point in time,” Russell said. “I firmly believe some of our lower-paid people need to be treated better than some of higher-paid people, which is a little awkward to say, but I think the impact would be greater for them.”
A 3-percent increase in salary does not sufficiently reward the workers with lower salaries, he said.
“For example, a man making $25,000 (a year), if you give him a 3-percent increase, that’s $750,” Russell said. “But somebody with my salary, that’s a lot of money.”
Over the next few weeks, Russell said the commission can continue to hold workshops to discuss how best to achieve a balanced 2014 budget.
“You can decrease expenditures,” Russell said. “That sounds a lot like an easy thing to do, but those expenditures are basically services that we provide.”
Augusta Commissioner Wayne Guilfoyle said the city needs to get serious about trying to cut its expenditures instead of looking for additional revenue.
“There are ways to save money,” Guilfoyle said, adding that Russell needs to request that department heads thoroughly examine their budgets. “The only way to do it is to reach out to the department directors. They know their departments better than anybody else, and if they are wise they would reach out to their employees for suggestions.”
While the commission must adopt a budget by mid-November, Guilfoyle reminded Russell that it was his job to help steer the city in the right direction.
“We have to end up with a balanced budget,” Guilfoyle said. “That’s where this body needs your help as well.”