According to accounting consultant Burt Dukes, revenue exceeded expenditures by $1.65 million in a five-month period ending Aug. 31. The bad news is, the city has already taken in 67 percent of its budgeted revenue. Last year, revenue exceeded expenditures by $2.4 million in the same time period. The city’s budget for the fiscal year ending March 31 is $14.3 million.

The city’s transfer tax revenue suffered the most this year, coming in at $188,000 less than last year during the same period. Mayor Sam Cooper described the transfer tax revenue as being “like a yo-yo,” fluctuating up and down. As an example, City Manager Greg Ferrese said in August, the city took in $184,000, but it received less than $26,000 in September.

Building permits, refuse revenue and grant revenue all came in at less than the prior year. The bright spots in terms of revenues were parking fees – $74,000 above the prior year; fines and forfeitures – $30,000; interest and rents – $7,000 and miscellaneous revenues – $64,000.

Dukes said the city’s cash position was $3.2 million less than at the same time last year. This is because the city used its cash to pay for capital improvement projects such as the Lake Gerar bridge, Lynch well, Phase 1 of the Boardwalk reconstruction and the new city website.

In an analysis of cash, construction-in-progress and long-term debt, the city decreased its cash position by $3.2 million and increased its debt by $2.9 million in order to fund a $6.4 million increase in construction-in-progress costs.

Of the city’s expenses, 50 percent of operating costs go towards salaries. To help ease that burden, the city did not fill vacant positions this summer and did not hire as many part-time employees. The city also held off on its capital expenses. Dukes said the most significant item was a $985,000 decrease in capital expenditures in the streets department.
The city also spent less on administration, information technology department, police and building and licensing. Legal fees were also down.

Dukes said the city has typically run a deficit in its general fund but has made up for it in its enterprise funds, primarily water and wastewater.

While water fund revenues were down compared to last year, the city did manage to exceed its expenses by $264,000, excluding depreciation. Oddly, the metered in-town water revenue was $16,000 less than last year, while out-of-town revenue was $9,000 more than last year.

Wastewater revenues increased by $161,000, from $693,000 to $854,000, thanks to a 10 percent surcharge added to citizens’ wastewater bills.

Dukes said the city needs $3 million more in revenue to make budget. Ferrese said he did not want to take the chance of not making that number. He called for cutting expenses and delaying capital improvements.

Ferrese said the city’s worst-case scenario is having revenues down by $500,000 to $600,000. While stressing the need to trim expenses, he said the last thing the city wants to do is lay off employees.