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City may face budget shortfall of $915,000

Revenue sources declining along with economy, director says

March 24, 2009

Brookfield could see a $915,000 budget shortfall by the end of this year, the city's finance director said last week.

Declines in revenue sources - including hotel room taxes, building permits and investment revenue - have forced the city to reassess its projections for 2009, Finance Director Robert Scott said.

The city expects to bring in about $35.1 million in revenues in 2009, but spending is estimated at $36 million, leaving the $915,000 shortfall.

Room taxes, permits drop

Scott called the report, which he delivered to the city's Finance Committee on March 17, the "best guess estimate on what we're facing" for 2009.

Scott said the projected shortfall is a result of the weak economy. He said hotel room taxes are expected to be about 15 percent lower than they were last year, with a shortfall of about $240,000. However, the city will have a better estimate on where things stand after first-quarter numbers come in next month, he said.

Building permits are expected to come in about $270,000 lower than the city estimated. In a memo to the Finance Committee, Scott said the U.S. Department of Commerce has reported a 50 percent drop in building permits since January 2008.

The shortfall doesn't mean the city is losing money, however. Scott said the city is projected to have an $11.4 million fund balance by the end of this year, compared to $12.3 million at the end of 2008.

"We're not losing money, but we're not making much, either," he said.

2010 looks tough, too

Scott said projections for 2010 aren't exactly rosy, either. Adding to the declining revenues are state factors like cuts to shared revenues and transportation aids that could come with passage of the 2009-11 biennial budget.

The city's estimated tax levy for 2010 is $36.6 million, about $950,000 above the potential levy limit, Scott said.

"The picture does not look good for the near term," he said.

Fifth District Alderman Scott Berg said the city really can't do much about raising revenues but can be proactive when it comes to implementing hiring freezes or not hiring for positions when they become vacant.

Mayor Jeff Speaker said he is working with department heads to look at options to cut costs and will report back to the committee and aldermen with any proposals or changes.

The Finance Committee will start working on the 2010 budget over the next few months.

Alan Hamari can be reached at (262) 446-6601.

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