City leaders have known throughout this year that Marysville's revenues have been underperforming, but after a June budget re-forecast, it appears that the city's general fund has a shortfall of about $1-million for 2009.

City leaders have known throughout this year that Marysville's revenues have been underperforming, but after a June budget re-forecast, it appears that the city's general fund has a shortfall of about $1-million for 2009.

City administrator Jillian Froment said three of the general fund's significant sources of revenue have underperformed this year.

"Last year at this time, we were just beginning to see this economic downturn," Froment said. "We had been conservative with our estimates for this year, and continued to watch our bottom line, but we saw over the first couple months of this year that we would need to adjust."

The three areas of underperformance include revenue from income taxes, which is forecast to produce a $258,000 shortfall; investment earnings, forecast to produce a $454,361 shortfall; and inspection fees, forecast to produce a $202,480 shortfall.

Froment said the state of the economy has had a direct influence on the three areas of revenue.

"We've not seen significant lay offs in Marysville, but there have been many cutbacks in employees' overtime hours, affecting the income tax," she said. "We've also seen the inspection fees drop - people just aren't building new homes. As for our investment earnings, we're currently experiencing some of the lowest interest rates we've ever seen."

To combat the shortfall, Froment said the city's administration is proposing that general fund expenses need to be cut by 7-percent. The general fund supports those services not provided for through an enterprise fund or specifically earmarked dollars, such as grants. Examples of enterprise funds, Froment said, are Marysville's wastewater, water, sanitation and storm water funds, which are user-funded and would not be affected by the cuts.

To make the budget cuts, Froment said the city's department and division heads were asked in July to implement a plan of reducing expenses in their budgets. A total of $996,338 in cuts are proposed for the remainder of 2009. Most significant are the elimination of street paving, sidewalks and trail improvements (saving $400,796); reducing crime and fire prevention, community notification, bike patrol and safety services capital outlay ($137,770); and maintaining current vacancies in personnel ($172,999).

Froment said the cuts were made in these areas to preserve the city's basic services, but that the coffers are getting pretty lean.

"We have reached the point in our finances where any reduction in expenses begins to erode the basic services we currently provide to citizens," she said. "Sidewalks were not built in areas where school children must walk in the street in order to reach schools; aging roads in desperate need of repair were not paved, and needed maintenance was deferred and will likely result in increased future expenses."

Froment also said that as these cuts are needed for the remainder of this year, they are unrelated to the city's income tax increase on the November ballot.

"It's also important to point out that the proposed income tax plan on the November ballot, if approved, will not restore this budget shortfall," she said. "Rather, if the plan is approved by voters, the revenues will allow us to maintain the current level of basic city services, in addition to making investment in our safety services."

2009 budget reforecast

Description of reductions for the remainder of 2009.

Savings are estimated.

Eliminate street paving, sidewalks and trail improvements ($400,796).

Reduce crime and fire prevention, community notification, bike patrol, and safety services capital outlay ($137,770).

Reduce technical services ($19,000).

Reduce materials and supplies ($14,500).

Reduce parks and recreation programs and maintenance ($5,000).

Delay equipment maintenance ($27,100).

Delay building maintenance and reduce landscaping ($11,000).

Reduce travel for meetings and training seminars ($5,450).

Reduce employee training ($13,500).

Maintain current vacancies in personnel ($172,999).

Reduction in civil service costs due to limited hiring of personnel ($8,876).

Reduction in overtime and miscellaneous personnel costs ($29,880).

Reduction in fuel costs due to drop in fuel prices ($41,337).

Grant match not utilized and incentives not claimed ($36,750).

Reduce fees and memberships ($5,040).

Transfers out of savings not utilized ($63,639).

Miscellaneous ($4,001).

Total: $996,338