Whats the Problem?
Since 2011, the City has experienced a 24% revenue decrease (over $2.9 million). What has caused this loss in revenue? Several factors, which include:
- $1.6 Million loss in Sales Tax due to a loss of a major business
- $200,000 loss in Sales Tax as a result of a business model change of a local company
- $400,000 loss in Sales Tax from declining oil prices
- $158,000 loss of Property Tax due to a key property owner becoming non-profit
- $500,000 loss to the General Fund due to the dissolution of Redevelopment
In addition the City has had rising costs, which include:
- Increasing retirement costs largely associated with prior unfunded liability obligations
- Increasing insurance costs due to loss history and escalating cost trends
The projected ten year gap shows consistent unbalanced budgets throughout the period, beginning with the 2016-17 projected deficit of $771,800 and increasing to a projected deficit of approximately $1.5 million by Fiscal Year 2025-26.
If we do nothing to address the structural deficit, the City will have come close to exhausting its General Fund reserves by Fiscal Year 2025-26.