What Will Troutdale Do When It Runs Out Of Money?

In just a few weeks, Troutdale will have a new Mayor and a new City Councilor. The new City Council will face steep challenges in the new year.

Troutdale's 2012-2013 deficit-laden budget approved by the city's Budget Committee and adopted by the City Council in June 2012 spent $338,000 more than the city's revenues. And now, Troutdale faces an estimated $97,000 budget shortfall in the 2012-2013 fiscal year due to falling assessed property taxes.

 I agree with the prime concern of the City Council and Budget Committee. No one wants to reduce city services! We can all agree on that. Having said that, what happens when the money runs out? What do we do then?

At its current rate of spending, Troutdale's city staff acknowledged it only has enough money in reserves to maintain existing service levels for a couple of years. In the 2012-2013 budget document, city staff wrote,

"The adopted budget maintains the necessary unappropriated balance of about $2,000,000 to meet the operational needs of the City between July 1st and November before property taxes receipts arrive. Dropping below that level could require the City to borrow money to meet the operating needs and could potentially also reduce the bond and credit rating of the City. The adopted budget uses $338,000 of the reserves above that level to maintain existing service levels. The reserves would enable the City to sustain service levels for the next couple of years, consuming reserves at this modest rate."

In spite of the city's precarious financial position, other than token budget cuts of around $30,000 for the 2012-2013 budget, neither the city's Budget Committee or the City Council seemed interested in reducing the city's deficit spending.

 I agree with the prime concern of the City Council and Budget Committee. No one wants to reduce city services! We can all agree on that. Having said that, what happens when the money runs out? What do we do then? PERS costs will go up. Health insurance costs will go up. City revenues could diminish even further.

This is not a problem that just came up out of the blue sky. I've written several times about Troutdale's budget problems here, and here, and here, and here. The question remains- what do we do when the money runs out?

No one wants to reduce city services, but what do we do when the money runs out?

What do we do when the money runs out?