The City of Mesa forecasts it will have an $8 million to $9 million shortfall in the next fiscal budget, which starts July 1.
Candace Cannistraro, Mesa’s management and budget director, gave the financial prediction to city leaders Thursday morning during an annual strategic planning meeting.
Cannistraro said the slow economic recovery is to blame. While the city has made cuts during the recession, it relied on funds it put in reserve to help fill a gap the past few years. In fact, no budget shortfalls were forecast for the current-year budget. Mesa’s general fund this year is about $308.5 million, Cannistraro said.
But reserves the city relied are getting low, and as scheduled, not much will be available for the 2013-14 budget, she said.
The city knew during the past few budget seasons how much it had to use in reserves, but the hope was by now that revenues would start increasing. And while general fund revenues have increased, it isn’t enough.
“The recession is over, but the recovery is taking a lot longer,” Cannistraro told the city council, Mayor Scott Smith and city employees. “Economists just keep pushing it out.”
Total revenue funds for Mesa in 2013-14 are expected to be in line with the amount of funds the city generated in 2005-06, Cannistraro said.
Showing where the city needs additional funds, Cannistraro presented a picture of how much benefit and pension costs have increased for city, police and fire personnel since 2005-06. Since then, costs have risen 40 percent to 115 percent per employee, she said.
Even though the city has far fewer full-time employee positions – 487 fewer to be exact – expenses are rising.
The city is also facing future expenses with operations and maintenance of new parks and facilities that will be built using bond funds approved by voters in November, Cannistraro said.
Cannistraro said the last few times Mesa has had to make cuts, it’s asked each of its city departments to plan budgets with across-the-board reductions
This year, Cannistraro said city staff will work with each department independently to determine where savings can be found.
The city is also going to look at system wide expenses – such as its employee benefit trust fund – to see if changes can be made in when some payments are made. City manager Chris Brady said there may be an opportunity to alter payments to the trust because right now it is, “healthy.”
Brady also told the council that the city’s utilities, “are looking pretty good,” and he didn’t expect a rate increase for next fiscal year. If that holds, it would mark the second year in a row that rates have remained the same.
The council should adopt a tentative budget on June 3, with a final budget adoption on June 17.
Contact writer: (480) 898-6549 or mreese@evtrib.com
Leon Ceniceros posted at 7:21 pm on Fri, Feb 22, 2013.
But....but...but....what about the $15 Million Dollars that Mayor Scott "AZ Governor/US Senator Wanna-Be" Smith wants to blow on the Fiesta Slum....oooops....I mean the Fiesta Mall Corridor.
You know...reducing Southern Avenue to one lane from three lanes or whatever (Southern and Alma School Road is already one of the worst congested 5pm intersections in the City....but does our Mayor (or should we start calling him...Governor Smith or Senator Smith) listen to his own Transportation Division....obviously not.
Oh, and don't forget the millions of dollars that Mayor Smith (we'll call him that for now.....[wink]) want to lavish on "beautifying" our Bus and Metro Line "Passenger Waiting Areas" with "urban artworks" to show Arizona, America and the World what a "progressive" (aka...spend tax dollars like drunken sailors whether Mesa has the money or not = millions of dollars in BONDS) metropolis....the City of Mesa is.
downtownresident posted at 1:04 pm on Sat, Feb 23, 2013.
Leon,
For once, I can find no fault with anything you are saying.
This sounds like a preemptive warning to employees to look out for more benefit cuts.
mvccd1000 posted at 4:50 pm on Sun, Feb 24, 2013.
Gotta go with Leon on this one... That Fiesta plan is a boondoggle of epic proportions.
Mesatoo posted at 11:44 am on Mon, Feb 25, 2013.
What a piece of fiction! This article blames budget shortfall on the high cost of employees and building parks and doesn't mention at all the $100 million Cubs stadium or the fact that the Riverview developer keeps all the city taxes paid there. It's hard to increase tax revenues when a major shopping area (with many relocated stores and restaurants) pockets them and calls it a "rebate". How can the city of Mesa "rebate" to a developer something that purchasers paid? Cut the corporate welfare and Mesa would be much better and services be reduced again.
fabiancota posted at 2:42 pm on Sun, Mar 3, 2013.
The City of Mesa has plenty of money according to Council Member Dave Richins. The City of Mesa playbook: The City Manager divides the budget into differing pots of money (earmarking it for this or that that allows them to hide it) and the council blesses this. Next you claim there is a budget shortfall with one of the pots to a project you don't support that doesn't give give you glory. This frees you to have money for your pet projects (corporate welfare for buddies that will contribute to your future offices and campaigns). All at the expense of basic city services. A classic bait and switch. Chris Brady is the master confidence man. Mesa needs to a new change and it starts with new city manager. Brady and his corrupt accounting has gotta go. These people were elected to provide city services, not bleed it dry for their benefit and to give corporate giveaways.