Cheney faces difficult balancing struggles with 2008 budget

By DAVID TELLER

Staff Reporter

Cheney's general fund will have an anticipated deficit of $388,000 by the end of this year, Cindy Niemeier, the city's finance director, said.

The budget forecast is for 3 percent growth in revenues and forecast for 5 percent growth expenditures. The result is a deficit.

The upcoming property tax will assess a levy of 50 cents per $1,000 of the assessed value of homes.

General fund revenues received sales taxes and property taxes of almost $5.9 million. The current estimate of need from the surplus is $304,400, which has accumulated from previous tax years. Because the budget overage in expenditures is higher than the anticipated revenues, the difference is subtracted from the surplus to balance the budget.

In governmental budgeting, everything has to balance,

“Our revenues balance our expenditures,” Niemeier said.

One saving grace was the building permit revenue from Eastern Washington University's recreation center, which helped cut costs.

“When you get some sort of unplanned revenue source or when you're able to cut costs in other ways, that's what (negates this year's deficit) number,” Niemeier said. “You can't count on recreation centers being built every year.”

Niemeier describes herself as a “conservative revenue budgeter,” saying it's a plus at the end of the year to come out in a positive situation. When writing the city's budget she looks at expenditures closely, trying to figure out where to shave some money.

The mayor proposes more personnel costs. Other costs offsetting the budget are one time costs. Niemeier used the example of a police car, you only buy it once, however, the ongoing costs keeping going up.

Currently the Parks and Recreation Department is funded from the utility tax. In 2002 the City Council cut the Parks and Recreation department to due budget deficiencies.

The department was non-existent for about a year when it was reintroduced as part of the utility fund. The community voted for a 4.75 percent utility tax increase on electric and natural gas service to pay for parks and rec.

“We want to avoid doing something like that again,” Niemeier said.

Other funding comes from the utility tax. The general fund receives 6 percent and the residential street fund gets 4 percent.

With growth comes more expense. The proposed industrial park will increase property taxes Niemeier said. There is sales tax based on that construction.

“But along with the growth also comes services we need to provide to those people,” Niemeier said.

She is reluctant to speculate how much the light industrial park will affect the budget in terms of expenditures and revenues. The hope is for a broader tax base, but the project is two years out.

The planned development, Campus Crest will generate revenue via property taxes, it seems probable this would revenue, but Niemeier said it could increase expenses also.

The rate of current spending shows revenues were over expenditures by $319,000, which created a surplus.

For the 2011 general fund, a deficit is estimated to be somewhere around $825,000.

“That's why we are trying to find a staple funding source to help stabilize revenue sources, Niemeier said.

In the worse case scenario, to compensate for the loses if they continue to remain in a deficit, the city would probably cut services, most likely from public safety.

David Teller can be reached at [email protected]