Albion City Council took a preliminary look at the city budget during a special meeting last Tuesday night, July 29, with their auditor, Terry Galloway.
The city has been able to spend from its cash reserves to cover the cost of street improvement projects underway this year, Galloway noted the city is spending about $360,000 from its sales tax reserves for these improvements.
Sales tax funds will also be for the new fire station project, which is now underway. The debt for construction of the new water tower is also being retired with sales tax funds. Sales tax funds are also used for capital improvements, economic development and debt service.
The preliminary budget reviewed by the council last week shows an estimated cash balance of $1,864,000 by the end of September, 2008. This would be an increase of about $88,000 from the cash balance a year earlier.
Total city revenues for the coming year are projected at $1,909,624, with projected expenditures of $2,778,877. About $500,000 of these expenditures will be for the new fire station project, which received $590,400 in bond proceeds this year.
Andy Devine, city administrator, presented a review of each budget category. He analyzed the revenues and expenditures of each department, before any transfers of sales tax funds. Balanced funds included the general fund, fire fund and sewer fund. The sales tax fund is nearly balanced, and there are surpluses in the solid waste and debt service funds. Deficit funds, before transfers, include the street, water, park, pool, police and library funds.
Property taxes to support all city funds were projected at $230,000 in worksheets provided by Galloway. If adopted, this would represent an increase of about two percent from last year’s property tax total.
Galloway recommended that the council should aim to close a $162,000 gap in the general fund to balance the budget. Their options would include budget cuts, reducing city services or increasing property tax revenues.