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City officials expect ‘difficult’ budget process

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WATERTOWN — After several years of being able to keep property taxes down, city officials are bracing for what they describe as a difficult budget year.

The Watertown City Council said it will not be able to use the city’s fund balance to lower taxes this time around. In previous years, council members have dipped into the fund balance to lower property taxes.

“This is going to be the most challenging budget done in my time with the city,” said Councilman Joseph M. Butler Jr., who will be working on his sixth city fiscal plan this spring.

Last fall, Mr. Butler warned that things could get rough as the city’s sales tax revenues were trending downward. That issue remains the biggest worry, council members said last week.

During the first eight months of the 2013-14 budget, sales tax revenues are down $242,743, or 2.11 percent, from the same time last year, City Comptroller James E. Mills said. So far this fiscal year, sales taxes are down $811,853, a 6.72 percent decrease, under the budgeted amount of $12,087,419, he said.

If the trend continues, the city could end up with a shortfall of more than $500,000 in sales tax revenues, he said. That means the council will have to go to the fund balance to make up for the losses in sales tax revenues that occurred this budget year, Mr. Mills said.

He’s blaming the downward slide of the Canadian dollar and fewer shoppers coming from north of the border to make purchases here. Potential reductions in civilian jobs and soldiers at Fort Drum also could be causing a decrease in sales tax revenues, he said.

Looking at what to expect next year, Mr. Mills said state aid “is flat,” although he expects hydroelectric revenues to continue to do well.

With the discouraging news, Councilwoman Teresa R. Macaluso said that council members made it clear to City Manager Sharon A. Addison and city staff that they will have to be even more diligent at putting together a tight budget.

She said she hopes sales tax revenues will rebound once the winter weather breaks and people head back to restaurants and retailers.

Since January, Ms. Addison has met with department heads to work on their preliminary draft budgets. She instructed them to find ways “to get the optimum out of their departments” and “re-evaluate how they provide services,” Ms. Addison said.

“It’s going to be a tough budget,” she said.

They also were instructed to take a hard look at whether vacant positions should be filled, she said. They also were told that the city will be focusing on the planned $6-million to $7-million Watertown Municipal Arena improvements, so they should not request other projects to be included in the capital improvements program next year, she said.

City officials also are worried the city may be forced to spend about $1.5 million on adding a second courtroom at City Hall. But neither of those projects will affect next year’s spending plan; the city won’t have to spend any money on the projects until the following year, Mr. Mills said.

If the City Council is predicting such “gloom and doom,” Mayor Jeffrey E. Graham said, council members should look at closing one of the city’s three swimming pools to save money. They also should at least consider making reductions to the largest city budget — the fire department — he said.

Ms. Addison will release her proposed budget at the end of April.

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