City to tap reserve funds to close deficit
By Maria Tsigas, Times Staff Writer
Tuesday, April 27, 2004
Instead the money will be made up in several ways, including taking $135,000 from the city's automobile and equipment reserve to buy five new police vehicles, instead of using funds from the general budget, he said.
Another $15,000 will be pulled from the Westminster City Police Department's reserve to purchase protective gear.
Dayhoff said another $74,000 will be made up by making reductions in some of the city's programs.
The costs of services have increased faster than the amount of revenue coming in, Dayhoff said. That compounded with the city's unfunded federal and state mandates have all led to a structural deficit in the city's budget, he said.
The income tax has been flat for three years, and revenue from property taxes is not increasing enough to make up for the cost of goods and services the city provides, Dayhoff said. But, an increase in the property tax is likely in the near future, he said.
Paying for long-term expenses with one-time funds cannot continue, he said.
Council President Damian Halstad said that this is a tight budget.
"We just cut it to the bone. No one knows what next year will bring. We'll just have to wait and see," he said.
Councilman Thomas Ferguson agreed that the city cannot keep tapping into its reserve funds because if the city experiences an unexpected expenditure it will be in trouble.
Next year the city will either have to decrease services or increase property taxes, he said.
"There aren't many more rabbits if any left in the hat," he said.
Capital costs account for $8 million and operating expenses account for about $20 million of the total budget. This year's budget, which runs from July 1, 2004, to June 30, 2005, increased by $3 million from fiscal year 2004.
Reach staff writer Maria Tsigas at 410-857-7886 or firstname.lastname@example.org.
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