By Matt Smith/msmith@trcle.com
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Most indicators point toward a tight upcoming budget year for Cleburne, said City Manager Chester Nolen.
City leaders will soon begin working in earnest on the budget for the next fiscal year, which begins Oct. 1.
A two-pronged hit of lower than expected sales tax revenue collections and an expected decline in property values played a big role in the problem, Nolen said.
“Three months ago our sales tax was off about 33 percent from the prior year,” Nolen said. “Last month it was 29 percent down. This month was off 25 percent. Things are improving, but we need to emphasize that people need to shop Cleburne first, buy it here.”
Property values are expected to decline because of a slowdown in gas drilling activity, which will probably result in less property tax revenue for the city.
The 2010-11 fiscal year will be “the budget that I’ve thought for a while would be the tight year,” Nolen said.
City staff are working on the budget but won’t know for a few weeks how much will have to be cut, he said.
“All of our revenue projections were due in Monday,” Nolen said. “We will start departmental exercises on June 1 so it will give departments a chance to get their request in. Then we will be able to get everything to the council by August 1.”
Nolen said it’s too early to predict some budget decisions, but the possibility of staff layoffs or furlough days could enter into the discussion.
“That’s always a possibility,” Nolen said. “Right now, we’re OK. Staff has been working on developing a reduction policy. One problem there is that we’ve got a couple of departments that are one or two-person departments.
“Economic development for example, there’s only two people there. There’s not a whole lot of fat to be trimmed out of that operation. You start cutting there, you’re either cutting salaries or people.
“But those options [staff cuts, etc.] are obviously on the menu. It’s not something we want to do right off the bat, but it’s definitely there.”
The city imposed a hiring freeze in attempt to avoid such a situation, however.
“Jobs that don’t have a direct relationship to public safety,” Nolen said. “We’ve looked very strenuously at any position that needs to be replaced, whether in fact it does need to be replaced. It’s going to be a very lean year though. We’re looking at a continuation of the hiring freeze, continuation of a large-capital-purchase freeze, particularly like rolling stock, cars, trucks, that sort of thing.”
City facilities that generate their own revenues, such as Splash Station, the Cleburne Conference Center and Cleburne Golf Links, will have to balance their budgets on what they make in fees and revenues, Nolen said.
“Splash Station, the city has not contributed to because that’s a 4B deal,” Nolen said. “They typically have been about $150,000 to $200,000 in the red. Last year it was just because of the rain during the summer, which closed the facility a lot.
“The golf course, of course, has been closed for three years. It’s not even been re-opened a year yet. In prior years, it was almost break even, maybe a little down. So we’re not sure what to expect. We know from budget that [the golf course] is behind right now, but again that’s due to weather events like today. Yesterday the course had a lot of folks out playing. Today, nothing.”
Nolen said it’s too early to discuss the possibility of cutting hours at such facilities.
“I really don’t even want to speculate on that now,” Nolen said. “That’s always a possibility, but the 4B board and council would have to look at those before they make a determination as to whether to cut hours or cut days or operational decisions in those type matters.
On the plus side, he said, gas royalties from leases on city-owned land are, while not up to the levels of a couple of years ago, coming in a bit ahead of budget.
Council members have historically used such revenues to pay for one-time projects rather than for ongoing city operations.
Nolen said he expects the council will continue that policy.
“The council has really not wanted to utilize those funds more than what we already do,” Nolen said. “They’ve taken a hands-off position on that. Again, we’ll have to see as we get our revenue and expenditure budgets put together, and projections to see where we are.”
The city’s budget challenges this year relate strictly to the general fund, Nolen said.
“The water and sewer fund, and the airport funds are very healthy,” Nolen said. “Those two operations obviously don’t depend on taxes for their support. The money coming into those places is more than sufficient to maintain their operations.”
Things may be tight for the time being, but Nolen said he expects Cleburne should fare better than many other area cities.
“It’s going to be a lean budget without some of the frills of previous years, but we should get through OK,” Nolen said. “It’s just going to be one of those years where you just tighten your belt and make do, grit your teeth and get it done.”
