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After hours of debate on Tuesday, the Los Alamos County Council agreed on guidelines to staff for developing the FY2015 budget.
Reaching consensus on how to address dwindling resources proved difficult.
Gross Receipts Tax revenues have been $2 million lower than anticipated this year due to issues such as the government shutdown. FY2015 revenues are also projected to be $2 million less, in large part due to deeper automatic spending cuts if Congress does not pass a budget by Jan. 15.
Councilor Pete Sheehey pointed out that this was a worst-case scenario and assumes that Congress will not reach a budget agreement.
“This is based on projections that Steve (Lynne, deputy county administrator/chief financial officer) has received through his conversations with the lab, which is one of our best resources as far as predicting what the revenue status will be in the future, and that’s how we came to the number,” County Administrator Harry Burgess said.
“We heard some projections as high as nine percent.
“The five percent was not the worst-case scenario I’ve heard discussed. It was a somewhat middle-of-the-road reasonable estimate, but it is highly dependent on other decisions that are made.”
Council finally agreed upon the guidelines in a 6–1 vote, with Sheehey voting against it. For more on the issues council debated, read Friday’s Los Alamos Monitor.
Here is the FY2015 budget guidance adopted by council.
1. Fund Balance – use of fund balance is expected when severe revenue fluctuations occur. The following parameters serve as guidelines.
a. Use of up to 100 percent of the Fund Balance Committed for Revenue Stabilization through the end of FY 2017 is acceptable as long as the projected balance at the end of FY 2019 returns to the policy target level of 5 percent of revenues. This is an extension beyond the current financial policies.
b. Manage all other variables so that the Unassigned Fund balance is maintained at the policy target level of 20 percent of revenues.
c. Re-evaluate all fund balance levels for potential re-programming and possible re-capture back into the General Fund.
2. Expenditures – Target a general overall reduction of 5 percent in General Fund expenditures and other funds that are primarily GRT dependent, operating transfers to other funds, and transfers to the CIP Fund, with the understanding that this is not an across the board mandate. This should be accomplished by:
a. Increasing operating efficiencies
b. Further reducing discretionary items (training, travel, uniforms, etc.).
c. Lowering staff levels and staffing costs (see staffing below).
d. Consider lowering customer service levels. This may include reductions of outside service contracts. Reduction of service hours is acceptable.
3. Capital Projects
a. Consider delays and reductions in scope of future capital projects.
b. Reduce annual placeholder amounts for Roads, Parks and IT projects by up to five percent.
c. Finance new facilities with new revenues and new debt – see item 4.a.
a. New General Obligation (G.O.) debt with new property tax revenue for planned CIP projects that are major new facilities (not replacement or major maintenance) should be pursued, including the related required voter approval.
5. Revenues – because of the magnitude of the projected revenue reduction, new revenues should be proposed.
a. New tax revenues
i. Property taxes – given the relatively low currently imposed County and Municipal rates, re-implementing the $1.5 million (which was removed in FY 2011) of property tax revenues is included in the FY 2016 projected budget.
Attachment A 2
b. User Fees – all remaining recently unadjusted user fees and the user fee policy should be re-evaluated and reasonable increases should be proposed while generally avoiding impacts to youth rates.
a. Limit salary increases in the FY 2015 proposed budget to 2 percent.
b. Staff levels should be reduced through attrition.