National and county politicians aren’t the only ones faced with tough fiscal decisions this year.
The Shrewsbury Board of Aldermen spent a work session Tuesday discussing options for closing a budget gap that will otherwise eat into the city’s fund reserves. According to a draft version of the 2012 budget, Shrewsbury is expected to fall $151,879 short in its general fund and $133,259 in the red in its capital improvements fund.
City revenues are predicted to total $5,646,551, which is almost unchanged from the year before but still down from the $5,819,667 collected in 2008. Expenses are also expected to closely mirror the 2011 budget of $5,829,551 with $5,800,030 projected for 2012.
A Larger Problem
Shrewsbury Mayor Felicity Buckley argued that these numbers don’t accurately reflect the true scale of the problem the city faces because it splits the debt payments from a $3.1 million bond used to help create the Shrewsbury Community Center among the two funds.
If the cost of the bond was shifted back to its original position, then the general fund would actually be running a much larger deficit (around $415,000) while the capital fund would end up with a surplus. The city’s overall debt load of $272,023 would remain unchanged by the rearrangement.
“We have to make sure citizens know it’s an alarming situation,” Buckley said, referring to the $415,000 hole in the general fund.
Aldermen Elmer Kauffmann raised an objection to Buckley’s suggestion, noting that citizens might think the board was “playing games” with the numbers. Along with alderwoman Dee Wiecher, who said she considered the bond’s improvement capital in nature, Kauffmann said he would like to see it remain the same.
In the end, the board decided on a compromise floated by aldermen Mike Travaglini and Ed Kopff that would shift enough of the debt into the general fund to leave the capital fund with a small deficit. Kopff said the move is similar to what was done in the 2010 budget.
Good Cuts Are Hard to Find
The board of aldermen went through the general fund budget department by department in search of possible cuts but struggled to find ideas that could gain traction among its members, the mayor and city staff.
After noting that Shrewsbury had lost revenue from its tax on landline phones, alderwoman Dee Wiecher asked if the levy could be applied to cell phones. Buckley responded that it would prompt those who still had landlines to feel like they were being hit twice.
Wiecher cited another possible source for savings—eliminating the salary for elected officials, which amounted to $33,600 in 2011. The suggestion again prompted a response from Buckley.
“I love the fact that our community respects the contribution that our elected officials make,” she said. “I think it’s a very small compensation. At the end of the day, it will not significantly impact our deficit.”
Kopff suggested that the board look to the operations of its aquatic facilities for savings.
“My goal is to try and find another $30,000 or $40,000 in cuts,” Kopff said. “Could we close it on Monday or every other Monday?”
Street Superintendent Tony Wagner said such a move might only serve to cause residents to look at pool memberships elsewhere. While it may save some on expenses, Buckley added that it could also cost the facility just as much in revenue.
As aldermen struggled to find places for cuts, it became more likely that the city would rely on its fund reserves to absorb this year’s budget gap. Travaglini said the board could accept the deficit for now with further reductions of the controversial plan to redevelop Kenrick Plaza with a Walmart Supercenter.
“Next year will we have a better idea if this [deficit] is going to be permanent or whether or not we are going to see money coming in and light at the end of the tunnel,“ Travaglini said. “If we are not going to have it, then we gotta be prepared to make some hard decisions because it’s going to be a long road back.”
If the Shrewsbury decides to give financing support to the redevelopment, it could receive to help offset the budget gap. Buckley told the board she believed that would be the only way to avoid making steep cuts to city services.
The board will have one more chance to discuss and review the budget at a work session Dec. 6 before passing a final version the following week.