From the Indianapolis Business Journal:
Anderson Mayor Kevin Smith and city controller Sam Pellegrino are asking every city department to make cuts to their budget — and some requests go as high as 20 percent.
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Smith is trying to reverse the borrowing of the last few years, when loans of $4 million each year were received just to cover early-year payroll expenses. The reason this happens is because the city has not budgeted for an operating balance — funds that would allow the city to cover payroll during the first part of the year until the state makes its first tax repayments in May or June.
Property tax revenues are only paid out twice a year, which means the city does not have a continuous 12-month cash flow, Smith said.
The city currently has no operating balance. Past practice has been to borrow money from the city's utility reserve fund or the Indiana Bond Bank, which requires a small interest added to the repayments.
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Pellegrino approached department heads a few weeks ago to request that they submit proposals on how to reduce their expenses.
"Some of the department heads have already contacted me and told me their game plan," he said. "I would rather them do it than me."
Since first discussing this with departments, the county learned it will be getting some unexpected money from the state, about $3.2 million from the state's $206 million accounting error. It should help reduce the extent of cuts this year, Pellegrino said. Smith expects Anderson will receive less than $1 million.
Smith said that every government has money, but the key is to determine how to prioritize budgeting needs. He is trying to prioritize those expenses this year, so that the city can move in the same direction next year.
"Realistically, in Anderson we continue to decline in revenues and population," Smith said. "We can't continue to do things as we have always done them."
http://www.ibj.com/anderson-mayor-seeks-budget-cuts-up-to-20-percent/PARAMS/article/33883
