The city of Denison is tightening its belt as it prepares for the 2020-2021 fiscal year.
As a part of the annual city budget retreat, Denison city staff are proposing a budget with $1.9 million in reduced expenses for the upcoming fiscal year following the COVID-19 pandemic.
"I’d say it is going to be a difficult year, especially for the general fund," City Manager Jud Rex said. "We’ve cut our expenses back considerably and we’ve predicted that were are going to have some dollars back in and it is going to be a goal to align the money we have available with the council’s priorities."
For 2021, the city is proposing a $28.7 million budget with reduced capital spending, one-time purchases and other cuts over the previous year.
Rex attributed the tight budget to reductions in revenues related to the pandemic. While the sales tax revenues have remained strong in the wake of the virus, Rex said building permits and other fees have dropped significantly.
Currently, the city is anticipating ending the year in the red by 217,000. This would leave the city with 62 days of reserve funding.
In an effort to balance the budget for the current fiscal year, Rex said the city took steps to reduce spending across the board. However, some of the savings came naturally due to the nature of the pandemic.
"Part of that was done through the natural cancellation of events and activities: Our summer camps, closing the pool for two months," Rex said. ".... Really the bulk of that was furloughs and freezing of spending in the general and utility fund."
For the upcoming year, Rex said the spending cuts largely follow the cuts that were made for the current fiscal year.
However, some of the cuts are expected to be eased in the upcoming year. Utility positions that were frozen during the pandemic are expected to be relisted starting next week, while general positions should reopen around Oct. 1, Rex said.
Under the current budget, the city is expecting that there will be about $1.3 million of revenue over the city’s expenses. If the city were not to use this, it would increase the days of reserve to 81 days, pushing the top end of what is recommended.
"I would say the most difficult thing for Denison now as we plan next year’s budget is kind of scaling things back and sliding money back in," Rex said. "It is going to be difficult to decide where we put things back. We don’t have the same amount of money we had this time last year."
Michael Hutchins is the local government reporter for the Herald Democrat. He can be reached at email@example.com.