City Begins 2013 Budget Process – Work Starts to Close $8 Million Gap
City Commission begins five month process to balance 2013/2014 budget.
(May 3, 2013)
(West Palm Beach, FL) – On Monday the City of West Palm Beach will begin the process of creating its budget for the next fiscal year, and a key goal will be finding a way to bridge an $8.4 million dollar gap between revenues and expenses for next year.
It’s not unusual to start the process with a projected gap. Last year at this time, predictions showed a gap of approximately $6 million dollars which was closed by the time the budget was finalized. But city officials are already saying the process over the next five months needs to include a candid and honest discussion regarding spending priorities for the upcoming year. The City Commission approves the final budget.
“Our budget isn’t any different than the budget of every family in our city,” said West Palm Beach Mayor Jeri Muoio. “You can’t spend more than you have, so together the Commission and I need to look at some tough options and possibly make some hard decisions about reducing costs or we need to find a way to bring in more revenue. The days of skyrocketing property values are gone, and all cities are working within the same reality.”
In fact, city budget officials estimate it will take 10 years before property values get close to what they were in 2007.
Wall Street analysts continue to give the City of West Palm Beach high ratings due in part to the city continuing to have healthy reserves, good credit, and high marks for management.
The budget predictions come soon after news that property values in the city are predicted to go up approximately 2% over last year. But property tax revenue only represents one-third of the city’s revenues. Even if values do rise, the city is only looking at a 2% increase for one-third of the revenue. This is much too little to offset some major upcoming expenses.
Some of the largest expenses are increases in pension costs. Pensions have risen from $9.4 million dollars to $16.3 million dollars in just four years. Also increasing are contract-mandated salary increases which will jump $1.7 million dollars since last year.
The city’s Finance Director Jeff Green has called these increases “unsustainable” in the current economic climate. He will lead Monday’s public discussion of the upcoming budget with city commissioners.
The 2013/2014 fiscal year begins October 1, 2013.