Delray commissioners facing budget shortfall

By DAVID SEDORE, Palm Beach Businss.com

DELRAY BEACH — City commissioners are staring down the barrel of a $6 million to $8 million shortfall as they begin to put together a budget for the upcoming fiscal year.

City Manager David Harden Tuesday presented commissioners with a preliminary budget of $104.7 million, a decline of about $5 million over the amount the city will spend this fiscal year. Revenue, however, will decline even more because of property tax reforms voters approved in January.

“There are going to some things that some of us aren’t going to be willing to give up,” Mayor Rita Ellis said. “But everything is on the table.”

If commissioners keep the current tax rate, they’ll need to find ways to cut $8 million from the budget. If three of the five commissioners agree, they can raise taxes to a maximum allowed by law and cut the deficit to $6 million.

There are ways to raise taxes by a greater amount, but given the slow economy and rising cost of living, commissioners are unlikely to consider them.

“We’ve got an obligation to try to hold the line,” Commissioner Fred Fetzer said.

Harden said he’s identified about $1 million in budget cuts already, and confident he can cut $500,000 more. Freezing all hiring (the city has 43 open positions currently) and freezing salaries would save $2.5 million more.

That leaves commissioners facing a gap of $2 million to $4 million, depending on what they do with tax rates.

“Finding $2 million isn’t going to be easy,” Ellis said.

Commissioners do have some other options.  The city’s budget task force has identified $2 million in potential cuts, though much of that would have to be negotiated with employee unions to be realized.

A consultant’s report on the budget is also due shortly.

Commissioners, however, must make a decision on rates by August 4. They’re scheduled to meet next Tuesday, and agreed to work on the budget on July 22 and 29.