Six million to be cut from city budget
Recession takes big bite out of sales-tax revenue
Stricken by a recession that has dropped Grand Junction’s sales-tax revenue for the first time in a quarter-century, city officials will slash operational spending by more than $6 million this year.
City Manager Laurie Kadrich said the city expects to save $2.1 million in personnel and labor by not filling 11 new and existing positions, reducing overtime and cutting other programs. It will save $1.5 million by not purchasing new vehicles and other equipment. Another $2.5 million in savings will come from a decline in fuel spending, delayed street paving and other areas.
At the same time, city leaders will accelerate capital spending on projects largely funded by utility fees and consider other measures such as a fuel rebate and a discounted prescription drug program in hopes of jump-starting a local economy that has slowed drastically.
“We have cause for concern, but it’s a manageable concern,” Kadrich said after a budget presentation that lasted more than two hours Monday night. “We believe that we’re going to weather this national economic downturn better than other communities. We’ve experienced that in 2008 and we’re confident that we’ll do that in 2009. But that doesn’t mean it’s going to be a good year for us.”
The primary culprit in the budget trimming is a drop-off in the city’s sales- and use-tax revenue, which comprises roughly two-thirds of the city’s general fund.
Kadrich said tax receipts in January and February declined more than 10 percent from $11.1 million last year to $9.8 million this year. That’s the first time year-to-year revenue has fallen off in 25 years, she said.
City officials have predicted sales- and use-tax revenue will increase 8.5 percent over last year.
The cuts extend a three-month spending delay Kadrich implemented at the beginning of the year as a precautionary measure. She intended to report back to the council at the end of March on whether to resume spending as planned or continue the cuts, but officials saw enough in the first two months of the year to take action now.
“I believe the situation is serious enough that we need to make adjustments now and adjust the budget, frankly, for the rest of the year,” Kadrich told council members.
She vowed the budget reduction will not compromise public safety or ongoing capital construction, result in layoffs or lop off popular programs like Spring Cleanup or fall leaf removal.
In fact, the city intends to fast-track some capital projects that weren’t slated to be done until between 2010 and 2013 and instead complete them this year or next. That includes a $10 million initiative at the Persigo Wastewater Treatment Plant and $5.2 million in water and sewer line replacements.
In addition, Kadrich and other department heads pitched ideas such as offering a mid-year fuel rebate to city utility customers and piggybacking on a national prescription drug program in which low- and moderate-income residents could receive up to 20 percent off medications.
Details of those programs haven’t been worked out, and council members directed staff to further explore their viability.
The city may also place a greater emphasis on awarding construction contracts to Mesa County contractors as a way of retaining jobs and keeping people employed in the community.
Councilwoman Linda Romer Todd said she would want to consider a local-preference policy on a case-by-case basis.
“I want to support our local people, but they have to be competitive,” she said.