NORMAN — City council members are working to finalize a bare-bones budget for the fiscal year that starts July 1.
In a study session Tuesday, council members struggled to cut a proposed $71.6 million general fund budget even more than they have trimmed it already.
The city's main operating expenses are paid out of the general fund. City Manager Steve Lewis's proposed operating budget is funded largely by sales tax collections. Lewis said he is basing his budget on a predicted 4.2 percent growth in sales tax revenue, based on historic growth patterns.
The total proposed budget for all city funds, which includes capital improvement project money and utilities revenue and expenditures, is about $225 million, an increase of $21 million over last year's budget of $204 million.
Lewis said the $225 million figure was “somewhat inflated due to anticipated costs for some major capital improvement projects.”
Finance Director Anthony Francisco said general fund revenue for fiscal year 2013-2014 is estimated at $68.7 million, while expenditures are estimated at $71.6 million. The difference between the two amounts will be taken out of the city's reserve fund, he said.
The reserve fund is a balance maintained in the general fund and is not the same as the city's rainy day fund, which will remain intact and, in fact, will increase because of an annual deposit that will be made into it, he said.
A midyear adjustment once sales tax money has come in might brighten the picture, Francisco said.
Councilman Robert Castleberry said reserve funds are dwindling, and the city needs to focus on general fund expenditures, taking steps now to reduce them.
Council members are contemplating a budget amendment that would cut money for supplies by about 2 percent “across the board.” This could cut expenditures by more than $400,000.
Lewis said the city could absorb the cut, although it might affect road maintenance projects and street-sweeping operations, which would have to be cut back.
“We've got to do something. We can't keep pushing it away,” Castleberry said. “We're going to have to do it this year or next. I would like to see us do a little of it this year.”
Guarding the future
The proposed budget includes no raises, except merit pay raises, and does not cut personnel, Lewis said.
Castleberry said he did not want cuts to affect personnel or services.
“There's a point where cutbacks will affect services,” Lewis said.
The overall economic outlook is for slow, continued improvement, Francisco said. However, uncertainty remains on the local and national levels.
A conservative budget helps safeguard the long-term financial security of the city, he said.