Carson City officials expected to be $2 million in the hole next year, but instead find themselves only $1 million short of a balanced budget.
The city planned for a 2.5 percent sales tax increase in 2000-2001 fiscal year but instead gained 10.5 percent. City Finance Director David Heath said the increase in sales taxes - gained largely on the back of automobile sales - "defies logic."
He told Carson supervisors Friday the city received about $2 million in extra sales tax this year which go a long way toward easing the city's fiscal woes. However, it doesn't pull the city from a deficit situation because extra sales tax dollars generally go to the city's capital improvement program, funding everything from new fire trucks to playground equipment. Those needs are not provided for elsewhere in the city's budget, Heath said.
"The reason we have money is we budget conservatively," Heath said. "A million seems like a lot, but when you look around the city at the capital needs, you can only stretch it so far."
The $1 million deficit next year would go away if sales taxes this year go up by 5 percent instead of the 2.5 percent budgeted, Heath said, or supervisors could choose not to spend money on capital improvements to help balance the budget. But city leaders are looking at other ways to cut costs throughout the city in the wake of economic uncertainties and in light of a potential budget deficit next year.
"In the interest of being a responsible government in difficult times, we're looking at everything we can," Heath said. "We're striving to maintain the current level of service and save as much money as we can."
Carson City supervisors will be presented with the cost saving plan Thursday.
Measures to control costs include:
- Evaluating the need for replacing vacant positions or reclassifying existing positions. Also, where positions are no longer needed, the city will look at early retirement buyouts.
"If we can find a position we can get by without, we will look at that," Heath said.
- Capital purchases over $10,000 not related to public safety must be approved by the city's Internal Finance Committee.
- An attempt to keep medical benefits from increasing more than 5 percent. The city also enrolled its employees in a compensation managed care program which will save $600,000 a year.
- A consulting firm is working on a plan to help the city to cut its utility costs.
City supervisors gathered Friday to lay out their funding goals for the 2002-2003 fiscal year.
While Mayor Ray Masayko said he was encouraged by the rosier financial picture, he said a healthy financial future is contingent on not allowing labor costs to increase more than 5 percent - an expense that usually rises over 7 percent each year.
Despite demanding in March budget sessions labor costs be kept down, he said he doesn't believe it will happen.
"If I were a king, that would be true," Masayko said. "But I'm not. It was not a royal decree. This has to be a political process."
As city officials begin budget planning, leaders will focus on improving traffic, redevelopment and financial resources in the coming year. Specifically, supervisors and city staff decided to focus on:
- Refinancing the nickel gas tax the city levied to help put $19 million toward the freeway construction. The extra money would allow more traffic congestion-reducing projects in the capital.
- Annual review of all city fees.
- Review of what programs can be cut in case of budget constraints
- Roop Street widening.
- Completing parking improvement projects around the Community Center and Mills Park
Also, uncompleted goals from previous years such as extra library staffing, furthering economic development and funding public safety will remain priorities.
If you go:
What: Carson City Board of Supervisors meeting
When: 8:30 a.m., Thursday
Where: the Community Center's Sierra Room, 851 E. William St.