FARMINGTON — City Council will vote today on whether to adopt a preliminary budget using as much as $3.5 million in cash reserves and making $3 million in cuts to balance a $6.5 million deficit.
Once adopted, the budget will be submitted to the state Department of Finance and Administration by June 1 for approval. City council typically adopts a final budget two or three weeks after the preliminary budget is approved.
The "cash-cuts" budget approach will allow the city to continue funding vital programs and services, said Mayor Tommy Roberts in a phone interview Monday afternoon.
"I think it's a reasonable approach," he said.
If the city council were to adopt a budget using no cash reserves, another $3.5 million would have to be cut, Roberts said.
"It gets fairly obvious when you go through the proposed budget line-item by line-item, that people would feel those cuts," he said.
But there is a downside to using cash reserves.
"There's a limited amount," Roberts said. "We want to maintain sufficient cash reserves."
City Manager Rob Mayes' proposed budget includes a variety of minor cuts to services across city departments, and a 60 percent reduction in the city pay plan adopted in August 2012.
"I think we have a good handle on our budget," said Councilman Dan Darnell in a phone interview Monday evening. "It's going to be a tough year, but I think we've gone through a lot of scrutiny."
Before council votes to adopt the preliminary budget, they will discuss the city's capital improvement program, he said.
"That's the last piece," Darnell said. "Every year we come up with a recurring budget and we look at any cash we have for capital projects."
The budgeting process' largest challenge is using historical data and patterns on tax collection and other revenue to ensure that all of the city's expenses are covered, he said.
Although the city receives monthly reports on tax revenue, those numbers are always two months behind, Darnell said.
"We're basing our budget on the unknown," he said. "Based on those things, we have to show that offsetting revenue. This budget process continues to move forward. If the picture changes then the budget changes."
Although Roberts and Darnell say the budget is reasonable and conservative, Councilwoman Mary Fischer disagrees.
"We're still a long way away from a budget that I can support," she said in a phone interview Monday evening.
A better solution would be to make meaningful cuts to some services and to salaries of upper-level management, and to creatively find ways to reduce costs, Fischer said.
"We could consolidate services with the county, and purchase in block groups with the county or with the other cities," she said. "I haven't seen much creative thinking. I don't see any long-range planning."
The city may be able to lower its health insurance costs by purchasing coverage in a group with the county, schools or San Juan Regional Medical Center, Fischer said.
"I don't know that we've explored that," she said.
In addition, the city needs to focus on employee training, especially within the police department, Fischer said.
Overall, the city suffers from meaningful and constructive planning, she said.
"I really would like to see us focus on how it impacts the budget every time we spend money," Fischer said. "The day we pass the budget, we should be looking at next year. I would like to see quarterly budget reviews. I think we should be doing a lot more internal planning. Where do we want the city to be? What do we want Farmington to look like in 10, 15, 20 years? We've gotten away with it for so long because we've had enough money to cover our mistakes."
Greg Yee can be reached at firstname.lastname@example.org; 505-564-4606. Follow him on Twitter @GYeeDT.