In worst-case scenario, Williams sees red ink in 2015

Williams could be operating in the red by the end of the 2015-16 fiscal year based on a 10-year forecast presented recently to the City Council.

The report, compiled as a worse-case scenario by Finance Director Rex Greenbaum and presented during a special council meeting on Feb. 8, indicates the city could see a steady decline in its general fund starting in the 2013-14 fiscal year, and could be nearly $950,000 in the red by the 2021-22 budget.

And that forecast includes getting a half-cent sales tax renewed by the voters this year.

If not, the 10-year projection puts the city $3.87 million in the hole by 2021-22.

"We have to come up with a solution for both possibilities," Mayor John Troughton Jr. said Monday. "We don't know what that will be, but we should have two plans."

City Administrator Chuck Bergson said the picture is not quite as bleak as the 10-year forecast presented to the council suggests.

In fact, he thinks the city is in pretty good financial shape, especially in the short term.

"I think our overall picture ... of the enterprise and general funds are pretty good," Bergson said. "Our major thing is the sales tax." The purpose of the forecast was to paint a bleak picture for planning purposes only.

Bergson notes the forecast assumes absolutely no economic growth, and assumes an annual 4 percent increase in wages and benefits, as well as an annual 3 percent increase in professional, contractual and other related costs.

"I don't think that will happen. That would be a nearly 50 percent increase over the next 10 years." Bergson said of the payroll bump.

"From a staff perspective, we are showing the council where we are, where we are heading and some of the decisions they need to make," Bergson said.

Troughton agrees the forecast was intended to give the council the most negative possibilities, but he thinks that is critical if the city is going to stop a trend of just passing on costs and tough decisions onto succeeding city councils.

"Right now, I'm not comfortable with anything," Troughton said.

If nothing else, the mayor said the projections, even if tilted to the worst possibilities, shows the need to control costs and to get the half-cent sales tax renewed.

Without that, he said, services such as police, fire and public works will likely get cut.

If the sales tax is approved, then the city has a good chance of managing its budgets, especially if some of its economic development plans come to fruition.

"Growth would help, but even it that happens, we don't want to go out and spend," Troughton said.

The city is hopeful the voters will back the sales tax plan just as they did in 2007, especially since the burden of the tax increase falls more on the interstate travelers through the city, rather than on the residents.

Whether the proposal will be for another six years or longer has not been decided, Troughton said.

There are some certainties to account for in the projections, including the cost of the current drug task force officer the city will pay for starting in the 2012-13 fiscal year, and the cost of a school resource officer, which would be divided over the 2014-15, and 2015-16 fiscal years.

Both are grant positions that required the city to keep the position for at least one year after the federal or state funding ended.

The city is hoping the Williams Unified School District will be willing to absorb some or all of the costs associated with the resource officer, but there has been no commitment made at this date.

The 10-year forecast also indicates that while the water and sewer enterprise funds will remain in the black, there are revenue and other issues to address over the next 10 years.

Not the least of those concerns is the need to develop more water production.

Troughton is hopeful that if rate increases are necessary, that they will be more gradual than some of those implemented in the recent past.

His bigger concern is with the debt load the city is carrying, and what would happen if some kind of unforeseen infrastructure problem were to happen.

The mayor said that is why it is critical to pay down debt, and to control costs.