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Budget could be difficult in 2011
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City budget in review

A look at money generated and spent July-November compared to same period last year

Georgia Mountains Center: Generated $45,000 more; cut $18,000 in expenses

Parks and Recreation: Generated $145,000 more; cut $54,000.

Solid waste: Generated $7,000 more; cut $127,000

Golf course: Generated $67,000 more; cut $71,000.


Gainesville's administrative services staff kept a close watch on 2010 revenues and expenses, but it seems the tough times aren't over.

Starting next week, they'll start planning for fiscal year 2012, which starts July 1, by keeping tight control over expenses and expecting revenues to stay where they are.

"From a revenue perspective, where we budgeted very conservatively for the year, we're meeting our projections," said Melody Marlowe, the city's director of administrative services. "At this point, I hoped to see them start exceeding our projections, but they're still just basically flat."

Marlowe and City Manager Kip Padgett met with each department director in the past few weeks to conduct mid-year reviews of budgets as they look to the year ahead.

"We keep hoping for that turnaround in revenues. It's gradually picking up, but it's going to be a while," Marlowe said. "At this point, I'm not going to expect budget increases. I'll anticipate flat revenues going into the next fiscal year."

The goal this year? Help each department stand on its own feet.

"We substantially scaled back on solid waste and the golf course and other groups that required general fund money to support it," Marlowe said. "We're working toward every operation standing on its own, and so far that's looking good. What you want is for those funds to operate like separate businesses and to pass along the costs to the people who are using them."

As city officials hang on at the local level, they'll be keeping an eye on what happens at the state level with budget cuts.

"There's a lot of talk about property tax assessments, franchise taxes and the motor vehicle tax," Marlowe said. "Any change in these could pretty substantially impact our revenue streams."

Marlowe is expecting a decline in property tax revenues locally and is monitoring sales taxes as consumers go back to the stores.

"We're seeing gradual increase in the sales tax, but it's nothing to get excited about, and the increase we're seeing definitely will not help offset the declines in property tax," she said. "We also have concerns about health insurance because we're not sure how the health care laws will affect us, and we're keeping a close eye on retirement funding with our investments being impacted substantially."

After Gainesville City Council members heard a clean audit report earlier this month, the financial picture is looking a bit brighter than this time last year. Marlowe was continuing to tighten the belt as franchise fees declined, gas prices fell and reserves dwindled in 2009.

In October 2009, when the city's sales tax receipts didn't seem to be improving, city officials implemented furloughs, requiring all employees to take one unpaid day off each month until the end of June 2010.

The move was the last effort the city made in 2009 to cut spending to match revenue losses. Before that, the city tried cutting pay raises, initiating a hiring freeze and putting a halt on capital spending to stop the economic downturn from impeding employees' take-home pay.

"Furloughs are a temporary measure, and when we first faced the economic challenges, we looked at our organizational structure and what positions could be phased out or scaled back to take care of employees," Marlowe said. "This year, we were able to take away furloughs."

When looking at specifics for fiscal year 2012, Marlowe says is "too early to know."

"‘Cautious' is the word," she said. "We're in a good position to manage the challenges. The City Council has made decisions that allowed us to stabilize our budget and maintain our reserves through the challenges ahead."