Dillon money woes projected to increase
September 21, 2012
Facing a a projected general fund deficit of nearly $600,000 by 2018, Dillon is facing some tough decisions concerning where its spending priorities lie going into the future.
While discussions are still ongoing for the next couple of months, so far, Dillon Town Council is indicating that capital expenditures, like road improvements, will be examined individually as they come up, while the economic development budget is something that should remain untouched.
The town’s general fund is not balanced for 2013; revenues do not cover expenditures by $222,000, a deficit that will be covered by spending savings from this year’s budget. But, town finance director Carri McDonnell projects the general fund shortfall will keep growing the next few years, to the tune of almost $600,000 by 2018.
“This is not a sustainable practice,” McDonnell told council members earlier this month. “Either revenues have to come up, or expenditures have to go down, or we need a combination of the two.”
Going into the long-term, marketing and economic development shouldn’t be cut back, because if successful, those have the potential to draw in revenue in the future, Mayor Ron Holland said at council’s work session Tuesday night.
“I understand that we need to cut back next year … but the driver is economic development. That’s how we defeat that,” he said.
Recommended Stories For You
Holland’s suggestion: Have staff come up with what’s serious as far as road projects go, and put off what they can while the economic development budget is fully funded.
Councilman Erik Jacobsen expressed interest in expanding the economic development budget – “let’s get the vacancies out,” he said.
Seventy percent of the general fund goes to staff and benefits, expenses Wray indicated would be hard to cut. There’s already some savings going into next year from vacated positions not yet filled, and related expenses like staff training are already “down below where they should be,” he said.
Over the last six years, from the 2007 to 2013 budget, general fund revenues have increased 3.2 percent. During that same period, expenditures have increased 10.2 percent, according to a recent report by McDonnell. The average annual increase of 1.7 percent per year in expenditures is not unreasonable if revenues are able to support it, she wrote.
Recent sales tax collections are pleasing, Wray said – an increase in July brought the 2012 collection projection to 4 percent over last year’s – but there’s concerns over whether or not the trend will continue.
“If it doesn’t, we really need to look at additional revenue sources,” Wray said.
The purpose and value of the numerous events the town hosts each year has not been explored yet, and will be discussed in early November.
The subject of outsourcing services like plowing or police came up briefly Tuesday, but seemed to be dismissed.
“It’s gotta be a buck-stops-here mentality, bottom-line. We cannot go into a deficit,” Councilman Jason Smith said Tuesday. “Is it going to be a reduction in services? Nobody wants to hear that, but yes. We cannot keep doing this.”