Four years of holding the line on expenditures has backed some city departments into a corner.
This is the year many are saying they just can't do it anymore. And, this may be the year they can break free.
Revenues are expected to be up -- albeit minimally -- and capital needs are fewer.
City Manager Jim Ferree today received a preliminary copy of the city's 2006 budget. He expects to spend the next three weeks reviewing it with individual department leaders and then as a group as they vie for limited dollars. That will be the meeting where wish lists meet reality as budgets are redrafted to reflect revenues and priorities.
At that meeting, anything can change.
Finance Director Bruce Nelson has taken a cautiously optimistic approach on revenues. He's expecting sales tax and property tax to increase slightly and also has budgeted higher than he did last year for mineral lease revenues. Overall, his budget calls for a $452,000 increase in general fund revenues over 2005.
The city's general fund finances the city's administrative services as well as the Parks and Recreation, Road and Bridge and police departments.
Ferree's guidelines for department leaders were a little more flexible this year compared with the past few years when the bottom line has been a zero-growth budget.
"I asked them to try and keep it as level as possible, knowing that it's going to be difficult with fuel prices and other price increases," Ferree said.
Department leaders said they're budgeting closer to what they actually spent, which means the police and Road and Bridge departments' operation budgets increased about 2 percent each. Dave Pike, director of the Parks and Recreation Department, budgeted a 10 percent increase.
"I can't hold the line anymore," he said. "We may have to go back, and they'll cut it."
Pike's dilemma is an increasing need for part-time employees.
"I need some more help," he said. "We're getting to the point where we can only maintain, we can't add new projects."
Pike also is having a hard time holding the line on expenses on repair and maintenance as sprinkler heads and systems are broken and as facilities are vandalized.
To offset those increases, capital requests are down 33 percent. Capital requests include all purchases more than $5,000.
Ferree attributes the decrease to a lull in the city's vehicle 10-year replacement program, which means fewer need to be purchased this year.
The 2006 budget -- as it stands -- is smaller by about $220,000 than the 2005 budget, Ferree said.
But there are still several things that could change.
The budget doesn't reflect the City Council's input, Ferree's feedback or cost-of-living salary increases for city employees.
There are no requests for additional employees, nor are positions being cut.
Ferree said it's unusual for the budget -- at this early stage -- to come in low. Generally requests are up and must be pared down to fit the dollars available.
Even reserves are expected to be as much as $2.1 million -- $300,000 higher than expected. The goal is a 25 percent reserve.
"For the past several years, we've had to cut to get to that point," Ferree said.
Having additional reserves doesn't mean departments will be able to increase their budgets. Ferree said they'll look at their needs during the next four years and determine where that money is most needed.
"We may want a larger reserve to handle 2007 equipment replacements," he said.
Police Chief Walt Vanatta said preparing the 2006 budget presented the same challenges it always does.
"We increase one thing and have to decrease another to make it balance," he said. "We recognize that times are getting leaner, and we have to budget accordingly.
In the police department's case, he has to find a way to budget for increased overtime that's the result of increased calls for service and training needs. Add that to a rise in fuel costs, and capital needs are being cut to make up the difference.
Randy Call, Road and Bridge Department director, budgeted for higher gasoline prices last year, so he's not feeling too tight a pinch this year.
"We can exist with what we had for last year," he said. "It's not real hard to budget for Road and Bridge operations and maintenance."
Call is keeping an eye on asphalt and plastic prices. Although increases don't affect his budget, they do affect how much he can accomplish while staying within those dollars.
"It's all about planning. They tell me what I can do. I'm not going to tell them what I want," Call said
Ferree expects to have a draft budget to the council by Sept. 16. The council will hold an all-day budget work session Oct. 7. An ordinance approving the budget will be introduced at the Oct. 25 council meeting, and its final adoption is scheduled for Nov. 22.