The city could face layoffs or reductions in service hours in 2010 if general fund revenues continue declining as they have so far, Interim City Manager Linda Herzog told the Rotary Club of Sequim at its June 4 luncheon.
With these projections, Herzog seeks community input on what the city's priorities should be this for the rest of this year and for the 2010 city budget.
Herzog said the 2009 city budget was based upon 2008's declining revenues, but sales taxes are down considerably even from that - 21 percent less than budgeted so far this year.
Through May 31, the city projected to collect $1,114,800 in sales tax but has collected only $882,833.
The city has not yet had to lay off anyone or cut hours, but it will be difficult not to do so in 2010 if this continues, Herzog said.
City officials are trying to ratchet down spending to deal with the reduced revenue and still make life better in the city, she said.
One way to do that is identifying "sustainable revenues," or that level that reasonably can be expected from sources that rise and fall, such as sales taxes, Herzog said.
Establishing what is the most safe, standard, expected income from those sources will make budgeting more predictable, she said.
Herzog said in addition to reduced operational spending, no new capital projects are planned either because real estate excise taxes are 63 percent below 2008 levels.
Through May 31, the city's budgeted real estate excise tax revenue is $116,667 but the actual revenue is $43,484.
Priorities for the current and future city budgets might be a discussion topic during the June 29 city council meeting to discuss the citywide work program, Herzog said.
Herzog also told the luncheon crowd that on June 3, the state Department of Ecology agreed to cooperate in locating the proposed soccer fields and Master Gardener demonstration project at the city's water reuse park.
But Ecology officials did not want another roof in the water reuse park area, so the propos-ed expansion of the James Center for the Performing Arts may not be allowed, she said.
As a solution, the city might buy another six acres somewhere else to use as a water reuse demonstration site to compensate for having more impervious surface at the reuse demonstration park, Herzog said.
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