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City employees may feel the pain as Sisters slices its budget with a knife
honed by two years of deficit spending.
At a staff meeting on August 7, City Administrator Barbara Warren asked
department heads to immediately begin looking for ways to cut expenses.
The budget was adopted by the city council in June for the fiscal year that
began July 1. (See page 2 for related stories.)
Warren told The Nugget that without the cuts, expenditures would exceed
the $511,339 of budgeted revenues in the general fund by $55,000 to
$100,000.
The general fund is that portion of the city budget used to "account for
resources traditionally associated with government which are not required
legally or by sound financial management to be accounted for in another fund,"
according to the city's audit report.
This includes police, parks, the municipal court, planning, maintenance,
administration and support services.
Payroll and fixed costs alone exceed the city's budgeted revenues of
$511,339 by nearly $8,000. This is before a wrench is purchased for
maintenance, a sheet of paper for the copy machine or a gallon of gasoline for
police cars.
"What we will be looking at is that with the revenue we will be taking in,
versus the expenses, yes, we are short," said Administrator Warren on
August 8.
Actually, this is the third year in a row the city could come up short. In
1994-95, the city spent $60,000 more than its income, according to the audit
report for that year. Last year, the city spent about $53,000 more than it took
in, Warren said.
Part of the problem may lie in the fact that the city has traditionally
budgeted to spend all of its resources every year. This has had the effect of
obscuring the actual costs of running the general fund.
This year the city budgeted to spend $794,461 from July 1, 1996 to June 30,
1997. Warren said this included all city resources, including a carry
forward cash balance of $283,122.
But Warren acknowledged that she did not actually intend to spend this cash
carry forward.
"We have to have some kind of carry over. We can't spend it all. We never spend
everything that is in the budget," Warren said. "The last two years, we spent
more than we took in. In order to bring that back into line we need to look at
where we can make cuts and balance it."
This puts Warren in the difficult position of not spending according to
a budget developed primarily by Warren herself, approved by the budget
committee and authorized by the Sisters City Council.
"I am not gong to spend money according to the budget. It is my feeling we
should not spend more than we take in," Warren said.
When asked why the budget she presented to the budget committee did propose
spending more than the city would take in, Warren replied "What do you want me
to say? I don't really know."
She did say that the money that went into the city hall remodel fund is "not
included in the $555,000 that we spent last year. It was transferred out of the
cash carry-forward," Warren said.
Asked if this was the right time to build a new city hall, Warren said, "That
is a council decision, not mine."
To balance expenditures with revenues, Warren said that there would
probably be "no salary increases this year. We will not be looking at any
kind of capital improvement in the general fund. It might be possible we will
have to lay off a staff person or cut back hours."
Warren said that the budget deficits began with the hiring of additional
police officers, and there are some indications that is where the cuts will
start.
The police portion makes up more than half the general fund. Warren has said
she felt the only "fat" in the budget was in the police department.
Police Chief David Haynes acknowledged that he and other department heads have
been asked to make cuts. Haynes said that "at this time I don't know what I am
going to do.
"I have not been told what percent of cuts have to be made, only that there
must be `severe cuts.' I have done a line-by-line review of material and
services, and frankly I don't see many places to cut, other than personnel,"
Haynes said.
Haynes did note that the city may be looking at laying off two officers
instead of one, since half of the funding for the last position is provided
by a federal grant and would not save as much as might be needed.
There are six officers for the city of Sisters, plus a secretary for the police
department.
According to the city's personnel handbook, discretion in laying off employees
is granted to the city administrator and department heads and "shall be
determined by the City, based on the operating needs of the City."
City employees are to meet on Thursday at 3 p.m. to discuss possible cost
savings.
