The proposed budget is balanced with revenue and net transfers to the General Fund totaling $47,133,000 and expenditures of $47,062,000. Revenue for the beginning of the 2012-13 fiscal year, including dedicated funds, is estimated at $7.7 million, with estimated expenditures of $7.1 million.
Property taxes are the city's major source of income, accounting for 55% of the revenue in the General Fund.
The county tax assessor is predicting a modest 1% increase in property taxes in the 2012-13 fiscal year for the county, each percent valued at about $220,000 in revenue.
Historically, the city pulls in higher increases than the assessors' estimate. Pietig, who prefers to err on the side of caution, is using the county yardstick in his projection.
Indeed, if the taxes don't hit the mark expected, expenditures will have to be reduced, he advised the council in his summation.
Transient lodging taxes, commonly referred to as bed taxes, are the city's second largest source of revenue. The tax is expected to increase by 7% in the 2011-12 fiscal year, with each percent valued at $46,000.
In the 2012-13 proposed budget, Pietig has cut that percentage to 3%.
More robust consumer spending in 2011-12 is expected to bump up city revenue by 9.5%, but is not anticipated to continue. Pietig is reducing his estimate by more than one-third for 2012-13. Each percentage point is valued at $30,000 in revenue.
Financial reserves remain untouched. The Disaster Contingency Fund has a balance of about $6 million, set aside in case the Federal Emergency Management Agency doesn't approve funds spent by the city on disaster-related projects. The Revenue Smoothing Account, a financial parachute approved by the council in 2008 to weather the economic downdraft, is also intact.