Published: June 09, 2008 04:31 pm      

Budget deficit reaches $294K

Unanticipated drop in revenue caused deficit, mayor says

Though the city is facing a $294,000 deficit, the Keene City Council approved a tax abatement policy Thursday to attract new businesses to the city.

“There have been some problems in getting some of the revenues to come in,” Mayor Roy Robinson said.

City accountant Bill Guinn presented a budget analysis to the city council in April that outlined the areas where city revenue is behind schedule.

Robinson said the analysis dealt with the budget for the rest of the year.

“Some of the parts of our revenue stream have been slow coming in, and a lot of factors contribute to that,” he said. “Last year was a really wet year, so sales revenues in the water department were less than anticipated.”

Robinson said the city would not cut any jobs or salaries because of the deficit.

“We’re not going to cut any positions, but we are going to tighten our belts,” Robinson said. “We are going to curtail our expenses until the revenue comes in to meet our needs. Suffice it to say that we are working to improve our revenues.”

During Thursday’s meeting, the council approved an incentive policy to attract more business to the city.

More businesses could mean more revenues, so a tax abatement policy could help the city overcome the deficit.

Diana Miller, executive director of the Johnson County Economic Development Commission, attended the meeting to discuss a tax abatement policy with the council.

Keene had a tax abatement policy before, but it lapsed after two years.

Miller said last week she wanted every city in Johnson County to have a tax abatement policy.

Two companies have contacted her about locating to Johnson County, and incentive policies are an important part of the package when it comes to attracting such companies, she said.

“We want to do it right,” Robinson said. “We want to be competitive with the other cities. We approved a tax abatement policy Thursday, but we’re not done yet. We added some information to the existing policy and re-established it, but we still have some work to do.”

Robinson could not provide specifics for the policy on Friday.

City Administrator James Minor had no comment, and Guinn was out of the office. Secretary Barbara Fuller also would not comment on the matter.