I recently talked to an alder who said every conversation with the new Mayor starts off with “we have no money.” Here’s why.
Every year things shift and move and we have surprises, but this year, it does seem more severe this early in the year and there is added stress around it because next year seems even more uncertain due to our dear governor. Here’s where the variances are happening.
Revenue
This is largely good news, with additional revenues than we expected.
Room Tax $280,000
One-Time ATC Environmental Fee $1,558,000
Gen Fund Portion of FEMA Blizzard Disaster Reimbursement $541,000
State Payments for Municipal Services ($32,000)
State Recycling Aid ($400,000)
TOTAL: $1,947,000
Expenses
The bad news is largely here.
Gen Fund Portion of Unbudgeted Blizzard Costs ($589,000)
Fleet Serv and Metro Fuel Cost Increases (assuming Feb, 2011 prices) ($2,000,000)
Adams Advertising Billboard Case Settlement ($600,000)
Lamar Billboard Case Settlement ($60,000)
Stagehands WRS Settlement ($850,000)
Unbudgeted Police Handgun Reimbursement ($100,000)
Remaining Uncommitted Contingent Reserve Balance Available $847,000
TOTAL: ($3,352,000)
DIFFERENCE: ($1,405,000)
Looks like the variances are due to legal issues, bad budgeting on snow and fuel prices. It seems unusual to have this many variances at in the first quarter of the year and I wonder if some of these things are really surprises or budgeting trickery. At this point, our “contingent reserve” (the city budgets about $1M every year to cover unexpected costs) will not cover these extra costs and we’ll likely have to dip into our “rainy day” fund. (Currently at over $30,000,000, I forget the exact number and can’t seem to find it. ) To put things in perspective, our operating budget for this year is $248,000,000.
I can see why the Mayor is concerned, typically we don’t see these kinds of numbers until later in the year. However, that also makes it hard to compare to past years. And Soglin is probably wondering what other wonderful surprises Mayor Dave has left him. I’m also trying to figure out if the fuel costs are locked in or not. Seems like the council should approve the prices when we lock in, but they don’t so I can’t verify anything this morning on the fuel prices, but the note seems to indicate that they might have gotten locked in last February, but I’m not certain.
