Tacoma budget director Diane Supler had some good news for the Tacoma City Council during Tuesdays study session – namely that the city is headed toward posting a general fund surplus of between $3 million to $5 million by the end of the 2003-2004 biennium.
Suplers 2003 year-end budget update included the following highlights: general fund departments are currently under-spending the projected rate of expenditure; general fund revenues are slightly lagging behind expectations; and this was the first review of financial information using the new SAP computer system.
Higher-than-expected revenues, a hiring freeze and careful spending by city departments – including the delay of some capital expenses – contributed to the nearly $339 million budget running in the black.
With the exception of legislative, all departments are spending less than projected, Supler noted.
The legislative department spent nearly $81,000 more than the $638,841 that was budgeted for 2003, she said, largely due the investigation into the Brame case by the Washington Association of Sheriffs and Police Chiefs.
General fund revenues for 2003 were projected to be $167,299,067, with $166,605,402 actually collected, for a shortfall of $693,665.
Still, the budget for the 2003-2004 biennium is expected to remain in the black due to higher-than-projected sales and business and occupation taxes and a miscellaneous fund that was just over $1 million more than was anticipated, primarily due to interest income, Supler said.
Collections on utility taxes, which lagged behind projections for 2003, she said, are expected to be up this year, more than making up for last years $1.3 million shortfall.
Total city resources were reported to be $353,091,213, which is comprised of revenues of $338,780,492 and a cash balance of $14,310,721.
We spend a lot of time looking at revenues, Supler told the council.
As this was the first budget report using the citys new computer system, Supler noted, We had to do a lot of business differently during the implementation of SAP.
2003 is going to be a very difficult year, she said, referring to the fact that all budget figures have not been entered into the system in a timely manner as people become familiar with the new system.
Councilman Mike Lonergan questioned why bills werent entered and why this problem was just noticed recently.
Supler blamed a decentralized system and called it a lesson learned.
Councilwoman Julie Anderson wanted to know if there is a plan for firm final numbers regarding the 2003 year end budget report.
Because all bills havent been entered yet, figures presented during the presentation were skewed, indicating a nearly $15 million general fund surplus, instead of the actual $3 million to $5 million surplus.
I think its important for us to understand that, Councilman Kevin Phelps said.
Minds could run amuck with a $14 million ($14,765,037) surplus, Anderson said.
Youre saying $5 million is more realistic than $15 million, Lonergan clarified.
Supler said yes, noting the city should be caught up by the end of the 2003-2004 biennium this September.
All the information in the system is accurate, Supler said. All the information has not been entered into the system yet.
Well get better over time, City Manager Jim Walton assured.
Still, it wasnt all good news, as the City Council faces the challenge of the 2005-2006 budget, with some estimates indicating a $25 million to $30 million shortfall.
Mayor Bill Baarsma said the city will have some tough budget choices to make in the future that wont be solved by a hiring freeze or the delay of capital expenditures.
When it gets right down to it, he said, it involves heavy policy analysis.
For her part, Supler agreed. We cannot continue at this rate without some changes, she said.