Wary Phoenix officials approve budget

PHOENIX — City officials have approved a budget for the coming fiscal year with a stern warning that the city's financial condition will worsen next year, bringing severe cuts to personnel and services.

All told, next year's budget will come with $9.2 million in revenues and expenses — nearly a million dollars less than last year's $10.3 million, due primarily to a reduction in large projects and the fact a large loan was taken out last year.

With a surcharge OK'd by the council up for referendum in September, budget committee members opted not to anticipate $460,000 in surcharge revenues.

In addition, a $424,000 shortfall resulted in steep cuts to the coming fiscal year and use of more than half the city's $207,000 contingency fund to balance the budget.

The water bill surcharge was aimed at shoring up what former City Manager Dale Shaddox, who left his job Friday, called an ongoing $330,000 shortfall for funding basic city services.

Though the council approved the surcharge last month, residents voiced concerns about the issue not going to voters and Phoenix resident Steve Brown, an Ashland police officer, filed a referendum against the fee.

Shaddox said budget committee members focused on devising a budget to maintain public safety and prevent layoffs, resulting in cuts that included a planning director position, reduction of code enforcement to half-time, and cuts to capital improvement for police, fire and street work said to be accumulating at a rate of $325,000 annually.

Mayor Carlos DeBritto said, while the budget committee "made things work" this year, the city's contingency, or rainy day fund would dwindle in the coming year, from $206,000 to just $70,000.

At the beginning of next year's budget cycle, in the months on which the city must operate on its contingency fund, DeBritto said the city would be unable to pay its bills.

"Going into next year, we're really going to need that surcharge funding. If we don't have that we're going to have some very severe problems," DeBritto said.

Budget committee member Stan Bartell challenged the city's stance on the surcharge.

"The whole thing Dale presented to us the last few months was, 'It's all a safety issue. If we don't pass a surcharge were going to lose our police and fire.' Then it was, 'We're going to have a mass exodus of employees.' Well, none of that has happened," Bartell said.

"The surcharge was put in place as a public safety act and right now we don't need that surcharge to keep public safety in place. If it did pass, we would get this money and what would we do with it? The people didn't say, 'Let's put it away for next year or following years.' " He added, "I want us to have the safest community we could possibly have but I want us to be financially responsible at the same time. I just don't agree with using safety as a scare tactic."

Newly hired interim City Manager Joe Wrabek said a special committee had been reviewing possible options to reduce costs and find additional funding sources.

Options include outsourcing for some services and repealing the surcharge to take the matter to a vote sooner than the referendum could be decided.

"With this budget, what we've managed to do here is buy a little time, but we've definitely got a big problem to fix," Wrabek said.

"The sooner we can work toward a solution, no matter what that solution may be, the better off we're going to be. "¦ Right now it's kind of like Noah building the ark. You know the flood is coming and the bank just denied your construction loan."

Other funds approved for the 2007-08 budget, which begins July 1, include $1.1 million in spending for streets, $756,000 in revenue from a public safety levy (expiring June 2009), $3 million spending for capacity increase to streets and $1.35 million for utilities. A recent $5 water rate hike will raise an added $140,000 over last year's water bill revenues.

Buffy Pollock is a freelance writer living in Medford. E-mail her at buffypollock@juno.com.

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