Councilors weigh priorities for surplus

Though they have agreed to set aside more money in economic downturn reserves, city councilors are striving to use some of the city’s unspent funds to advance some of their biggest priorities.
“It often happens where council will come up with an idea and the staff says, well if you want that you can pay for that out of your reserve,” Mayor Dave Norris said, adding that the body is responsible for the city’s entire budget so he believes it is within the council’s purview to spend unused money on specific items.
“I think it’s absolutely accurate to get better information about … what can be accomplished with X number of dollars on each one of these initiatives,” Norris said.
The push for officials to spend some money on specific programs — including tree planting, fare-free transit for those trying to get off welfare and workplace diversity efforts — partly conflict with city staff’s proposals, which would have rolled much of the unspent funds into savings accounts and some back into existing programs.

“Keeping some in reserve makes sense for economic downturns, but if we can make a difference now on concrete activities, that makes sense,” Councilor Holly Edwards said in an interview Tuesday.
In addition to a $2.1 million fiscal 2008 surplus, of which much will be used to help the city stay afloat in the feeble economy, the city had an additional $3.6 million in unspent funds from city departments. Many of those funds were initially proposed to be given back to their respective departments.
“The starting point for year-end was basically $5.7 million,” said Bernard Wray, the city’s finance director, at Monday’s City Council meeting.
After councilors expressed a desire earlier this month to put some of the city’s unspent funds into a general reserve, staff adjusted some of the allocations, putting roughly $3 million in reserve accounts. Other departments, such as tax and rent relief, human resources and voter registration, did not have their fiscal 2008 leftover funds returned to them.

The staff’s changes include moving a $67,990 leftover balance from the City Market into next year’s Capital Improvement Program — which could potentially shrink by $16.1 million, or 45 percent — to help oversee the market’s expansion. A fuel reserve was reduced from $400,000 to $143,000, in light of decreasing fuel costs; the $257,000 taken from that reserve will instead be placed into one for economic downturns, increasing the amount to $1.16 million.
About $1.2 million of the surplus is being put into savings because of the expected deficit this fiscal year. Because of escalating energy costs and declining local and state revenues, the city is facing an estimated $1.4 million deficit in its fiscal 2009 budget, though that figure remains hazy until Gov. Timothy M. Kaine releases his updated budget today.

Councilors agreed that they should be well prepared for difficult economic conditions in the future and that any funds proposed for specific programs should be spent carefully. But referring to having discretion only over its reserves, Councilor Satyendra Huja said, “If that’s our only purpose, we’re wasting our time.”
The $2.1 million surplus is made up of $1.4 million from the Virginia Communications Tax and $709,000 from interest income created by better-than-expected earnings. In terms of spending, the city saw savings because of unfilled positions — there are 13 frozen posts because of the government’s budget difficulties — along with reduced local costs for Social Services and transit operations, and from pulled funds for the now abandoned city-staffed ambulance service.
While budget surpluses have been routine for Charlottesville, the $2.1 million for fiscal 2008 is much less than what the city has seen in the past few years. The city had an excess of $7 million in fiscal 2007 and $7.8 million in fiscal 2006. The average surplus between 2000 and 2006 was $2 million.