City faces $3 million shortfall

The city of Yuma is looking at an anticipated $3 million revenue shortfall for the year as a result of the economic downturn, the Yuma City Council was told during its roundtable Tuesday evening.

While the Yuma area continues to have a strong economic base in agriculture, the military and tourism, "we also are being hit hard financially due to the slowdown in citizen spending and the drop in state shared revenues like the HURF (Highway User Revenue Fund)," City Administrator Mark Watson wrote in a memo.

In July, the city adopted a $66 million operating budget for fiscal year 2008-09. Also called the general fund, that budget covers public safety, public works and administration.

"Present trends and estimates indicate that revenues at present levels will show a $3 million loss from the above number," Watson wrote. "I anticipate that this situation will continue for the coming 24 months due to the anticipated drop in revenues at the state level."

During the roundtable, he outlined a number of steps that have been taken or are planned to offset the declining revenues and "weather the storm" until the economy turns around:

• Unexpended capital purchases in the budget are suspended.

• Only travel deemed necessary for certification and to lobby the Legislature and Congress for funding will be approved. Other options to traveling will be explored, such as teleconferencing and offering public safety training locally.

• Currently the city has 66 vacant positions. Staff reductions will continue from all levels of city government until a target reduction of 100 positions is reached.

Efforts will be made to do that through attrition and not layoffs. In some cases, positions are being combined or duties reorganized to maximize use of staff while reducing costs.

• Opportunities are being explored to use city staff, especially inspectors, to provide services for other entities such as the city of Somerton, the state and the federal government through intergovernmental agreements.

• Unobligated consultant fees will be suspended.

• The operating budget earlier had been "whittled down" to cut $8 million in anticipation of funding cutbacks.

"I think this is a great opportunity to revamp the organization and look at the things we're doing that we don't need to do," Watson said. "Maybe we can shed some things."

The cutbacks won't impact various programs and projects funded through special revenue sources, he said. That money will continue to be used for the projects designated by the funds.

For example, Capital Improvement Program projects to be funded through the city's bond issue last year are still on the books, Councilman Ross Hieb said.

One major concern is the dramatic drop in HURF money that will impact city roadway projects, Watson said.

He said the city will proceed with planned improvements to 16th Street between Arizona Avenue and Yuma Palms Regional Center as well as Avenue from 16th to 24th streets.

"That's about all the cash we have on hand to do," Watson said. He added that the city is trying to get those projects out to bid in hopes of getting a good price from contractors anxious for work.

One hope, he said, is the prospect of a second economic stimulus package that might include funding for public works projects to put people to work.

"We have five packets from the city in Phoenix and Washington, D.C., circulating as projects we can get up in 90 days," he said. For example, if federal dollars could be obtained for the 16th Street project, that would free up money for other projects.


----
Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853.