Casper Cuts Costs, Draws On Reserves To Meet Budget Crunch
The City of Casper will ride out its budget crunch with personnel attrition, savings in operations, reductions in certain capital expenses and tapping reserves, City Manager V.H. McDonald said.
Revenues have fallen $4.25 million through February mostly because of a sharp drop in sales tax revenues, especially from revenues in energy industry-related businesses, McDonald said at a council work session last week.
If the trend continues, the city will receive about 19 percent less in sales tax revenues resulting in a $6 million shortfall by the end of the fiscal year on June 30.
To make ends meet, the city will tap about $1.6 million of its $26 million in reserves, coupled with a variety of spending cuts.
Casper will save nearly $1.6 million by not filling vacant positions, McDonald said. "We are occasionally having more vacant positions open up that we're not filling, and consolidating positions where we can, and that's a main effort."
It also saved $703,000 by not fulfilling cost of living and other staffing requests.
The city axed $595,000 from "Priority 3 capital spending." The city categorizes certain capital spending as Priority 1 for health and safety, Priority 2 for mandated capital upgrades such as technology infrastructure, and Priority 3 for needed items such as software. However, while needed, those expenditures can be delayed, McDonald said.
The city also anticipates saving about $1.6 million by trimming operations, and cutting minor expenses wherever possible, he said.
There are limits to cutting, however.
Council member Charlie Powell said attrition will cause a problem because the same amount of work cannot be done by fewer people.
"It seems to me we have some responsibility to forecast for the public that wait times for responses for various services may increase slightly," Powell said. "There has to be some impact over time when you're not refilling positions."
McDonald said the services have been maintained with the current rate of attrition, but there may come a time when the city will need to change some services.
The next two years
McDonald and city council anticipate the economic downturn will continue.
So for the 2016-2017 and 2017-2018 fiscal years, the city may make a one-time exception in the way it uses the state's direct distribution of funding to counties and municipalities.
Depending on the Legislature's final decision, Casper probably will receive between $3.5 million and $3.9 million a year, McDonald said.
Traditionally, Casper has allocated 85 percent of its share for capital expenditures and 15 percent for operations, he said.
However, in light of the lower sales tax revenues, McDonald may suggest that city council assign all this state funding for operations for the next biennium to balance the budget, he said.
But that's it, he said. "We can't depend on that money to be available past two years."