Assistant City Manager Chris Morrill outlined key revenue indicators for City Council members during a workshop session Thursday morning.
The lower revenue totals are largely being offset in savings from city employee vacancies, lower fuel costs and increased energy efficiency. Morrill estimates the city is facing an overall shortage of $2.6 million in the 2009 budget, which will be erased by year's end through budget cuts and additional savings.
Alderwoman Mary Osborne homed in on the greatest concern for property owners: whether the city will have to look at a tax increase.
City Manager Michael Brown said a millage rate decrease for 2010 might be unlikely, and the city will take other measures first to avoid a millage increase.
He conceded that citizens could notice grass growing a little higher or ditches not being cleared as regularly, but City Council members were willing to cede that maintenance, if it means keeping workers in their jobs.
Alderman Jeff Felser suggested, and other council members quickly agreed, that once the economy rebounds, the city needs to give pay raises to city workers who are taking on more work in this economic downturn.
Some of the May revenue figures:
-- Hotel/motel taxes are nearly $1 million below the estimate projected, coming in at $4 million. The city projects its portion of the tax by year's end will be more than $1 million short.
-- Building inspection fees came in at half the $800,000 the city estimated it would earn in May. The year-end shortage on inspection fees is estimated at $1 million.
-- Sales tax revenue wound up slightly better than expected, bringing in more than $16 million. But it has been volatile from month to month, and the city anticipates it will need to draw $2.5 million from a tax stabilization fund to hit year-end projections for sales tax.
The one bright spot for May was water and sewer tap-in fees, which brought in more than $2 million. Those fees are now expected to end the year $400,000 above projections.
On the expense side, the city plans to spend less than anticipated in these areas:
-- Employee salaries are projected to come in $5.5 million under budget for the year because of vacancies.
-- Even with recently rising fuel prices, Morrill still expects a cost savings in gasoline and diesel of nearly $3 million.
Morrill and Brown, in following the city's budget and national economic trends, said their sense of the recovery is that it will not be a rapid return.
"I think we're having to assume the revenue levels we're at now are likely to continue and could go down," Brown said.