A decade out, tiny deficit looms
A critical part of City Hall’s budget within 10 years would run a deficit without officials either cutting spending or raising more money, a forecast given Thursday to Mayor Dana Williams and the Park City Council indicates.
The numbers for what is known as the General Fund remain strong through 2017, but that year the local government could be slightly in the red, City Hall analysts say. The forecast indicates the fund could run a $34,168 deficit, a tiny percentage in a year when the General Fund is set to reach almost $35.2 million, the largest amount between 2008 and 2017.
Many factors could alter the numbers, including changes in state laws or the timing and number of City Hall’s capital projects, the city says.
The General Fund is the pool of money that City Hall uses to pay for the day-to-day operations of the government and many of its capital projects, and it is part of the budget that officials spend much of their time on during their annual financial talks.
The numbers were part of a report submitted to the elected officials as they started reviewing the budget on Thursday. They are scheduled to continue the talks through mid-June, and a series of hearings is planned.
Park City’s budget for years has held strong as the city’s economy boomed starting in the 1990s. Property taxes and sales taxes have grown, and City Hall has long said its conservative budgeting has kept the local government financially healthy.
Bret Howser, who is City Hall’s acting budget manager, said sales taxes are "fairly resilient," but he does not expect them to grow as quickly as they have before. Development is expected to subside inside the city limits as construction crews complete some of the last major projects in Park City, leaving City Hall the anticipated deficit in 2017. Howser said fees collected on construction projects are expected to start dropping in 2009.
Officials, though, say by 2017 they will have developed a strategy to avoid a deficit. It is tough to predict how they would accomplish that, but they would have to either raise more money or cut expenses.
Jim Hier, a Park City Councilman who carefully watches the budget, said in an interview it seems unlikely City Hall will face the deficit predicted for 2017, arguing Park City continues to be a popular place for people to move. He said retiring baby boomers, drawn by Park City’s living standards, are moving to the city.
"I think Park City and Summit County will continue to have a robust economy in the long term," Hier said.
Hier said Park City’s vacation-home market will stay solid as well. That would especially boost the budget numbers because people who own vacation homes in Utah pay more in property taxes than those who live in their houses all year.
"We’re in such a great community for retirement and second homes," Hier said.
Thursday’s start of the budget talks drew little public interest, but upcoming meetings will likely attract Parkites lobbying for funding for projects or programs. Nobody testified during a Thursday hearing about the budget.
The City Councilors are considering an approximately $83.4 million spending plan for the 2009 fiscal year, which runs from July 2008 until June 2009. It will be the second year of City Hall’s two-year budget cycle, and City Councilors normally do not make widespread changes during the second year. City Hall officials have not asked for a property-tax increase.
The elected officials in the coming weeks plan to make critical decisions about upgrading pedestrian and bicycling routes, renovating the Racquet Club and the redo of the Marsac Building.
Some of the key upcoming meetings include:
( May 15, when City Hall departments will present their budget requests and City Councilors will start their talks about capital projects.
( May 22 and May 29, when more detailed talks about the capital projects are scheduled, including about the City Hall redo, the Racquet Club and a planned park-and-ride parking lot.
A head-on collision Thursday morning on Brown’s Canyon Road killed the driver of one vehicle and left another driver with critical injuries.