Ephrata braces for cuts

Economy affects city's 2009 budget

EPHRATA - Ephrata may need to make cuts in the 2009 budget.

Early revenue projections put the city at $14.1 million for next year. This is about $400,000 more than last year. City Administrator Wes Crago said raises and other cost increases would use the money.

After the problems in the financial markets, he said the city staff dumped those initial predictions. They are assuming financial markets will be less likely to extend credit, the economy in the area will slow down, and grants and other financial assistance will be harder to come by.

"With those three assumptions we sat down with the revenue side of the budget and tried to apply where would we see that? How would that affect our budget?" Crago said. "Even going back to August there was this desire, you can even call it a gut feeling, that we needed to be ahead of this, but with the economy, the stock market and what's going on with credit right now. We've got contractors … that couldn't get a bond. The lending institution said no."

City staff predicts a 5 percent drop in property tax and a 10 percent drop in sales tax, he said. Along with those drops, they expect a decline in building permits, water and sewer revenues, investment income and state and county money.

Early predictions put the drop in revenue at 4.5 to 5 percent, Crago said. This equals as much as $600,000 less than last year.

"We're not seeing that currently," Crago said. "We're not being told that this is what we should expect, but I think it is possible that between now and in March that all of those things could occur. I think it's prudent and the mayor believes it's prudent that we prepare in this fashion. So if there's a downturn that would affect this in these ways the city will already be ready for that."

He said the new predictions changed which of the goals the city could pursue in next year's budget. They would continue the water line and street project. The project has money set aside.

They also plan to continue the master plan process and maintenance for the park system, but wouldn't start improvements yet, Crago said. Other initiatives are on hold, including improving the recycling program and improving employee retention.

"Although, we have been doing some meeting with local contractors and there's still a lot of hope for (the recycling program) going forward in 2010," he said. "(The city) could see curbside recycling in the city of Ephrata. It's going to be a little longer process."

The city stopped new spending and may not be able to hire new personnel, Crago said. He doesn't expect anyone to be laid off because of it.

"We wanted to hire an assistant fire chief for five years," he said. "That's going to be very hard to accomplish. We're not rehiring (a) code enforcement (officer.)"

Mayor Chris Jacobson said any decision about the budget needed to be approved by the council.