City Hall has put its budget into an alert status, the second time it has done so in the past 13 months, an acknowledgement that municipal revenues are not meeting forecasts made when the budget was crafted midyear.
According to Bret Howser, City Hall’s budget officer, two key revenue sources are down considerably from the numbers that were anticipated when the Park City Council approved the budget in June.
Howser said the fees brought in through the Building, Planning and Engineering departments have fallen to approximately 50 percent of what had been budgeted. the end of City Hall’s fiscal year next summer, the fees the local government collects could be down $500,000 from what was expected, he said. The construction industry is well off the pace of 2008 and will not approach the record-breaking years of earlier in the decade.
Meanwhile, sales-tax revenues could fall by $100,000 from the budgeted amount, Howser said. Through July, August and September, the first quarter of the city’s fiscal year, the revenues from sales taxes were down 11.5 percent from the same period in the prior year, Howser said in a report to Mayor Dana Williams and the Park City Council.
“Not as bad as last year, but those are numbers we have to address,” Howser said.
In an alert status, City Hall tries to make up for shortfalls by more tightly monitoring the budget and delaying expenses when it is able to while maintaining the same level of government services. Officials last declared an alert status in November 2008 and elevated the severity of the situation in January. The elevated severity and the alert status were dropped with the midyear adoption of the new budget. The recent decision returns the budget to an alert status.
Howser said in an interview the budget team at the end of November asked City Hall departments to compile lists of potential budget cuts that could be made in the second half of the fiscal year, from January until June, totaling 5 percent.
If the cuts must be made, Howser said, staffers would bring the lists to the elected officials for discussion in January. Should the cuts occur, it is likely they will be among the first major decisions made by a new City Council.
In his report, though, Howser said “the future looks a bit brighter,” citing a release from a firm that monitors tourism in the mountain region that shows hotel bookings for the next six months are ticking upward.
“Local economic indicators are catching up to national economic indicators, and Park City may benefit from the broader economic recovery as early as this ski season,” Howser wrote in the report.