The Charlottesville City Council discussed possible appropriations using the 2009 fiscal year budget surplus and began to consider 2011 fiscal year budget guidelines last night.
During the 2009 fiscal year, expenditures were under budget by $5,049,993. Finance Director Bernard Wray suggested that $1,711,785 of the surplus be used for future programming through Neighborhood Capital Improvement Projects. Council Member Satyendra Huja agreed that shifting money to the CIP budget would be beneficial.
The looming possibility of a deficit in future years, though, complicates arguments related to the appropriation of surplus funds. Although the 2009 budget resulted in a surplus, citizens should not expect this scenario to repeat itself anytime in the near future. The Preliminary Projected Budget scenario predicts a 1.7 percent revenue shortage for the 2011 fiscal year, and this deficit could increase to as much as 6.3 percent by 2015.
One reason for this forecasted negative trend is the fact that the city does not expect to see an increase in tax revenue in coming years, said Leslie Beauregard, director of budget and performance management. As a result, some citizens might want to save the 2009 fiscal year surplus to cover "the projected hole in [the] budget," Beauregard said.
She explained, though, that the year's leftover funds represent a one-time expenditure and should be spent now to provide services and benefit current projects. Instead of using the surplus to compensate for expected shortfalls, Beauregard suggested that Council maintain its current economic downturn fund, which in the previous year totalled $2.8 million.
Beauregard also said the city should "submit budgets that are very flat" and not submit new requests, unless the proposed budgets are completely offset by new, unforeseen revenue streams.
Moving forward, she said the city's budget office will continue to explore ways to reduce the budget, adding that it is "difficult to plan in a volatile economy."
After Beauregard's presentation, Charlottesville resident John Faults expressed his own concerns about the city's fiscal state.
"The city has to propose a budget that is less than the expected revenues," he said.
In response, Mayor Dave Norris acknowledged that Council faces a difficult task in terms of trimming expenditures without significantly impacting deliverable services.
"I know we have a lot of work ahead of us," he said.
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