The Town of Smyrna may be facing a $290,000 budget shortfall in the current 2013 budget.
Councilman Robert Johnson made the announcement during his Finance Committee report at the July 15 council meeting. Johnson is the chair of the committee.
Johnson said the 2013 budget had a projected deficit of $290,000 that was expected to be covered by transfers from the town's budget reserves. He said the Finance Committee is going to have to look at the town's expenditures and revenues to see where the town stands, whether the town needs to do some budget cuts, and whether the revenues are coming in as projected.
"Right now they're [revenues] not coming as expected so we're probably going to have to look at maybe doing some possible budget cuts or a reduction in spending," Johnson said.
Mayor Joanne Masten said council knew going into 2013 the town would be facing a $290,000 shortfall but the town was supposed to look at the numbers in March or April to see where the budget stood.
"The March and April time frame kind of went away and the players changed," Masten said.
Masten said she wanted Johnson to get his committee together for a meeting next week, preferably the end of next week, if the committee members were available.
"I need you to look at what our current projects are because obviously the impact fees and permits aren't getting it. I mean they're very low so we can't count on that," Masten said. "But what we have to do is figure out where we are with the budget, what spending constraints we have to put into play. Everything is fair game."
Masten said anything on the town's capital project list, whether the town is working on it or about to work on it, needs to be looked at to make sure the funding is in place to pay for it. If the funding isn't in place for a project, she said the committee needs to figure out how the town would get the funding in place.
"Nothing is sacred here. Everything needs to be evaluated," Masten said. "I think you and your team have a lot of work ahead of you and I would really like to see a meeting put together for next week."
The Finance Committee will meet on Thursday, July 25 at 6 p.m. at town hall to discuss the fiscal year 2013 budget.
Why was there a projected shortfall?
When Smyrna Town Council approved the 2013 budget in November, the budget included a spending restriction of $289,000. Town Manager Dave Hugg had made a suggestion to the Finance Committee to include the restriction in the budget because the committee couldn't agree on cutting the budget, using the Rainy Day Fund or to a larger tax hike.
At the time, Hugg said the town could restrict the spending of $289,000 until March when the town was expected to have a better understanding of the final 2012 budget numbers as well as a better sense of whether or not the economy would pick back up.
The $289,000 was put in the budget as anticipated revenue, but Hugg said the money couldn't be spent without an actual revenue source.
The budget included a two-cent tax increase per $100 of assessed property value, putting the tax rate at 31 cents. The spending plan included heavy equipment, new positions, and several capital projects.
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