F’ville to amend budget to cover deficit

Tue, 03/24/2009 - 4:04pm
By: Ben Nelms

The Fayetteville City Council last week heard the first of two readings of a general fund budget amendment designed to equalize falling revenues from local option sales tax (LOST) dollars and other sources.

The amendment addresses a shortfall of $263,211. Council members April 2 will hear the second reading and likely adopt the amendment. That action will also include reductions in the water and sewer fund budget.

Mirroring the nationwide recession and experiencing the decreased spending that generates tax dollars, the city has seen a decrease in LOST revenues of 8.09 percent since last year, according to Assistant Finance Director Ellen Walls. That decrease in revenue necessitates a reduction in the LOST revenue column from $7,840,327 to $7,488,340, a difference of $351,987.

Some general fund revenue sources such as fines and forfeitures and miscellaneous income are projected to end the year in the black while others, such as investment income, are expected to be in the red. In total, the overall general fund is expected to see a shortfall of $263,211. With all line items considered, the general fund will be amended to total $10,324,935, down from $10,588,146 at the beginning of the fiscal year Aug. 1.

Budget categories from a variety of departments are expected to see budget decreases intended to offset the decrease in revenue. The city for the past two years has instituted numerous budget cuts and job freezes to help offset falling revenues.

The budget amendment will also include an adjustment to the water and sewer fund, expected to see a $1.256 million decrease in revenue, the bulk of which is in the wastewater budget.

Walls said the state-mandated reduction in water use has resulted locally in a 20 percent reduction in water use.

That reduction shows up in wastewater revenues, she said.

As emblematic of the local impact of the recession as any water and sewer revenue source is the sewer proportionate fee that is collected when builders connect to the city sewer system. What now exists as a revenue source of approximately $9,000 totaled around $500,000 prior to the recession, Walls said.

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