Continued increases in employee costs are driving up Henderson’s operating deficit in a fiscal 2015 budget approved by the City Council on Tuesday.
The city is expecting to pull $4.6 million from the city’s vehicle purchasing and maintenance fund to balance its $223.1 million general fund budget. The proposed budget is up from the $213.2 million spent in the current budget.
The new budget includes the estimated $2 million in service cuts and fee increases to parks and recreation operations approved May 6 by the City Council. All city departments have been asked to cut an additional $5 million to close the operating deficit.
Budget Manager Jill Lynch told the council the city hopes not to have to pull the $4.6 million, and hopes to fill the gap during the year through revenue enhancement and further cuts.
“If we can find ways to not need to pull in from those reserves we can implement those during the year,” Lynch said.
Councilman John Marz expressed concern about filling the operating deficit through more cuts.
“It is difficult to save your way to prosperity,” Marz said. “I don’t know any company that can do that. I don’t know any municipalities that can.”
The amount pulled to balance the budget is up from $4 million used last year, but considerably less than the $15 million needed from other funds in 2012. The general fund pays for the city’s day-to-day operations and activities not covered by proprietary funds or special revenue, such as grants and special taxes.
The general fund is mostly financed by property taxes, sales tax, business licenses, franchise fees and city fees. About 55 percent of the general fund budget is for public safety, including police and fire.
The general fund ending balance is projected to be $18.4 million, 8.3 percent of the fund’s budgeted revenues. The city also has $18.4 million in its rainy day fund.
The city’s total budget is $482.8 million, including proprietary funds and other government revenues such as gas taxes. The fiscal year starts July 1.
Salary and benefits make up 83.3 percent of the projected general fund budget at $185.9 million, an increase from $179 million last budget.
The police and fire departments, which do not receive cost-of-living raises but still receive merit increases, estimate an increase of $3.1 million for employee pay and benefits, parks and recreation anticipates a $1.5 million increase, and general government spending for employees anticipates a $1.8 million increase.
The city is estimating a $4.3 million increase in sales tax revenues to $91.4 million, the highest since 2008. Henderson is expecting a slight bump in property taxes for all funds of nearly $1.2 million to $59.7 million in the new budget. That is still down, however, from the peak of $85.7 million in 2009.
The city’s debt is $258.4 million, down from $276 million last year. The city anticipates paying another $19.2 million toward the principal during fiscal year 2015.
This year’s $482.8 million total budget is a sharp decrease from the $617 million budget in 2009.
Contact reporter Arnold M. Knightly at firstname.lastname@example.org or 702-477-3882. Follow him on Twitter: @KnightlyGrind