ALBANY -- Bracing for another drop in revenues -- expected to hit $4 million -- city of Albany department heads gathered Friday to begin the budget process for the 2010-2011 fiscal year.
With drops in sales tax revenues, coupled with a 3 percent drop in property tax collections, city officials say they expect the budget process to contain some additional cuts for the fifth straight year. But they say that as lean as some departments are, the lion's share of the difference will likely come from their reserve fund.
"Our departments are cut pretty lean after four years worth of mandated cuts," Assistant City Manager Wes Smith said. "So we'll be looking for areas to cut. We anticipate that we'll use our healthy reserve fund to offset any shortfalls."
At the beginning of the last fiscal year, City Manager Alfred Lott planned to pull $3.4 million from the city's reserve coffers to balance the budget after indicators suggested that revenues would drop. But when the dust settled, the city found itself with a $4 million surplus, which ended the need to pull from reserves.
The reserve account that the money would likely come from, the unrestricted fund balance, is currently worth about $18.5 million, Finance Director Kris Newton said.
Smith said that one of the changes department heads will see this year in the budgeting process will likely be a welcome one, as Lott has decided not to mandate blanket percentage cuts throughout the city's 16 departments.
"Rather than just issue a percentage cut, this year we're asking department heads to look closely at areas where they believe they can find additional savings while maintaining service levels," Smith said.
Department heads are required to submit their budget proposals to Lott in writing by Feb. 26, with department presentations set to begin some time in March.