Deficits can be reduced by cutting spending, raising revenue or dipping into the reserve. But if times don't improve that reserve, which now has about $19 million, will disappear and the city still will be faced with shortfalls in paying for city employees, services, material and operations.
Councilman Jason Sandel said that he has no problem with spending some of the reserves but he said that only puts off the hard decisions.
City Manager Rob Mayes' proposed budget seeks council authorization to use as much as $3.5 million in city cash reserves to help balance the budget. The rest of the $6.5 million gap will be closed through spending cuts, but Tuesday morning's discussion only scratched the surface of the 700-page budget. City council will continue its discussion at a special budget work session Friday morning.
"It's a combination of minor cuts to services and a 60-percent reduction in the adopted pay plan," Mayes said. "Let me stress that this is not a wish-list budget."
Councilman Jason Sandel expressed concerns about the proposed use of cash from what is called the "408 fund."
"Do we have a detailed listing of how the ($3.5 million) in cash is being spent?" Sandel said. "When I came on this council there was no 408.
That fund was created to save city surpluses to help cover one-time expenses, he said.
"Those funds are non-recurring," Sandel said. "It's money that you can't count on coming in ever again. These are used on one-time expenditures."
The city should not spend any money from the 408 fund on recurring expenses such as employee salaries, he said.
"If the 408 money doesn't materialize in the next budget year, then the city will face a similar gap," Sandel said. "It's easier to cut cars and computers than it is to cut people's lives."
Mayor Tommy Roberts agreed that non-recurring funds should not be used to cover recurring expenses, but disagreed on the philosophy of use of the 408 fund.
"I was not here at the time the account was established," Roberts said. "My understanding was that the 408 is flexible. There are different understandings of what's recurring and what isn't."
Revenue from tax collections and power-plant dividends, for example, are non-recurring to an extent because it is impossible to predict how the economy will affect those revenue sources, he said.
"I think our state has very clear histories on what's recurring and what's non-recurring," he said. "I'm fine with using the $3.5 million. I just what to make sure it's being spent on cars and computers. We can't count on that money coming back next year. We're spending it now and don't have any coming in tomorrow."
At this point in the budget process, the debate is not about where money is being spent, Mayes said.
"Right now the $3.5 million is not being spent on anything yet," he said. "It's a council decision on how it's being spent. This debate is about whether you want to use the $3.5 million this year."
Councilwoman Mary Fischer stressed the need to closely examine the city's staffing levels, and requested additional information for a special budget work session on Friday morning.
"For Friday, I would like for department heads to provide staffing levels for full time and temporary employees," Fischer said. "How many temps have been here for years, working without benefits."
Mayes stressed that one of his top priorities is to look after the city's staff.
"We are people," he said. "That's not just an HR slogan. I believe that as a service organization, our people are our No. 1 asset."
But Mayes did not ignore the harsh realities on the horizon.
"We do have less people doing more, and I believe that we need to take care of our people," he said. "But at some point, we need to get serious about what size city we want to be. When is the right time to cut $6.5 million and lay people off?"
Councilman Dan Darnell said he would be closely examining proposed funding cuts to social service programs including Child Haven, Totah Behavioral Health Authority and the Family Crisis Center.
"I think it's rather obvious to everyone here that Friday's going to be a critical day," he said.
But for Darnell, the budgeting cycle was not all bad news.
"We may be postponing those really tough decision by using cash, but no one knows what's going to happen in the future," he said. "I see some movements and a great deal of optimism in our business community. If things get better then we can have a mid-term budget review."
Greg Yee can be reached at email@example.com; 505-564-4606. Follow him on Twitter @GYeeDT.