Aberdeen Mayor Pete Schave’s $40 million proposed 2021 budget aims to cut the city’s operating deficit in ways that won’t cut services or personnel.
“I went through everybody’s budget, line by line and I looked at numbers from previous years and compared it to what they were asking for this year,” said Schave. “I think we’re looking at a tolerable budget as it is now.”
The mayor proposed his budget to the City Council, which must pass the final spending plan. The council approved the first reading of the 2021 budget at its Nov. 24 meeting. The second reading is Wednesday at 7:15 p.m. council meeting. At the last council meeting of the year, the overall budget will be up for final approval from the council.
Finance Director Patricia Soule said her analysis of revenues leans on the conservative side. Revenues so far in 2020 are mixed, with sales and property taxes taking less of a hit to the bottom line than in some other municipalities, while license and permit revenues are down.
“Taxes went up $561,849 to the previous year’s,” said Soule. These numbers are estimated, conservatively, she said, with total year-end tax revenue not known until the end of the year. Revenue from licenses and permits are down $63,300 from the 2020 budget to $483,800 for the 2021 budget.
The mayor’s proposed budget trims some of the deficit, with the use of some reserves and surplus ending cash from 2020.
“I came into this year about $2.3 million in the red and revenues didn’t make up for that over he course of the year. I was grateful we did as well as we did finance wise, but it didn’t make it up,” said Schave. “Our reserves are fine, but next year is it going to come up again?”
Expenditures increased due to three union contract negotiations “and some other essential needs we had to do,” said Schave. “That put our budget just over $3 million in the red” before his adjustments in the 2021 budget.
Schave’s budget does not include cuts in services or personnel, but already tight budgets are going to have to stay that way for the time being, nothing new for the city’s department heads. Soule said three personnel additions are included in the 2021 budget, but other requests for new hires in the city have not made the cut.
“The City of Aberdeen has done an extremely fantastic job over the years tightening our belts yet providing full services,” said Schave. “The trouble with that is, it gets old.”
A few examples this past year of department heads having to pull double duty to get the work done while keeping expenditures at a minimum include Economic Development Director Lisa Scott overseeing the city’s homeless camp, and Parks Director Stacie Barnum overseeing the museum.
“Everybody has been doing extra and pushing and trying to get things accomplished, but if we have to cut too deeply and have to cut somebody or lay them off it makes it that much worse. If we do that we start cutting into services,” said Schave. “We’ve done real well to avoid doing that and work together pretty well as a team to tighten our belts and see what we can come up with.”
Some department heads have expressed “concerns over my cuts, but we’re working together” to find solutions, said Schave.
There’s the $23 million armory fire insurance settlement, the bulk of which is “sitting in reserves,” said Schave. He wants to be careful about how that money is used, trying to find ways its expenditure could help the city in the long term.
“I’ve had some ideas and have had things brought to the council to make investments with that money so we get returns on it, not to spend it on just whatever,” said Schave. “Spend it on things with a return of investment that we need.”
The city is in need of two new fire stations, and the police station is in need of replacement, said Schave.
“I think we should use some of those funds for that, which is a great investment for our community,” said Schave. “It needs to be spent on the community, it shouldn’t just be sitting in a dusty old bank account,” adding the list of the city’s needs is “endless.”
Schave is counting on the city’s department heads and especially the City Council to provide insight into the city’s 2021 budget.
“If the council wants more cut I have asked them to give me some direction,” said Schave. About half the city council is just ending its first term in office, and Soule has only been on the job for a few months, adding to the challenges surrounding the 2021 budget.