Eau Claire faces the biggest shortfall it’s seen in recent years — triple last year’s figure — as it starts work toward a balanced 2020 budget.
The City Council got its first look on Tuesday at projections for next year’s financial picture and the early estimates show the city will be nearly $1 million short of anticipated costs to continue municipal services at their current level.
“We do have a gap. The revenues do not cover the expenses in 2020,” City Manager Dale Peters said at the onset of the Tuesday evening work session.
Finance director Jay Winzenz calculated a deficit of $935,000, compared to the $307,000 shortfall announced a year ago at the onset of 2019 budget talks.
While the city is facing a bigger number than it has in recent years, Winzenz assured council members that he and Peters will present a balanced budget proposal in early October.
“In my experience I’ve started out with deficits in that range before and we’re able to get that gap substantially closed,” Winzenz said.
After seven weeks of finding ways to trim costs, the budget proposal will reach the council on Oct. 4.
There will then be a series of meetings and public hearings until the council adopts a 2020 budget in mid-November, including projects that were approved earlier this summer by the council.
“All of these numbers are going to get refined during the process but it’s important for council to know where we’re headed,” Winzenz said when presenting his projections.
While the city will be allowed to collect more property taxes next year, that won’t be enough to cover growing costs.
Based on the 1.89% the city’s value grew recently through new construction, state-imposed limits will allow Eau Claire to increase its property tax levy by a total of $550,000 next year.
But that won’t entirely make up for the $1 million that personnel costs are expected to grow between employee raises and health insurance price increases.
Winzenz also presented a mix of growing costs and savings that ultimately got to the shortfall figure.
That included an area the city is expected to see a savings — projecting its gas and electric bills will be $55,000 lower in 2020.
A few of the projections Winzenz made cancel each other out. The city anticipates the asphalt it uses will be $30,000 cheaper next year, but road salt will cost $30,000 more.
Presenting the early figures to the council on Tuesday was intended to give the city’s elected officials an idea of the financial challenges in the budget and seek policy ideas to help shape city spending.
Councilwoman Jill Christopherson suggested that as the city begins drafting its budget, it makes technology advancement a priority. She added that technology projects should show they will provide a net savings for the city and increase efficiency.
Councilman Andrew Werthmann brought back an idea he’d advanced before — improving wages for the city’s lowest-paid employees who work on a seasonal or part-time basis.
“All those positions I would like to see them make a little bit of a higher wage,” he said.
Werthmann acknowledged that might not be possible in 2020 based on the early projections, but said the city should come up with a multiyear plan to get toward raising those wages.
Other council members spoke about improving early voting, making public transit more affordable and providing some money for neighborhood associations.
As the work session ended, Peters reminded the council that introducing new programs or expenses would mean cutbacks elsewhere, especially when the city is starting with a deficit.
“Wherever we add, we have to take away from somewhere else,” he said.