San Luis must slash $4.2M deficit to balance budget

SAN LUIS, ARIZ. — This city will need to find more revenue, cut spending or do both to eliminate a budget shortfall of a little more than $4.2 million for the fiscal year that begins July 1.

The San Luis City Council last week adopted a preliminary budget with a spending limit of $58.5 million for fiscal 2017-18.

Projected revenues for the year are $54.2 million, although San Luis Finance Director Kettie St. Louis told the council the estimated deficit could end up being less, once the city’s most recently collected revenues, including sales tax receipts, are recorded.

The council is scheduled to adopt the final budget later this month or in early July. The final spending plan must be balanced, because state law prohibits cities from carrying over deficits from year to year.

Mayor Gerardo Sanchez said he doesn’t foresee the council having trouble complying with the law.

“The final revenue figures haven’t come in yet. We know they will increase and that will help. We always end up with a deficit, but it’s always a manageable amount.”

Even if the final figures don’t show the revenues to be as high as previously expected, Sanchez said he’s confident the council will be able to make the necessary spending cuts to balance the budget.

Of the total shortfall, much of the deficit occurs in the general fund, which pays for most services the city provides residents. Total expenditures from the general fund for the new year are a little more than $20 million, with revenues coming into funds projected at $17.6 million.

In the city’s Highway User Fund — which finances street improvements — expenditures currently are projected to exceed revenues by nearly $1.1 million.

Other projected deficits for the new year include $960,111 in the ambulance service fund, $350,890 in the sewer fund, and $140,700 in the fund that pays for the city owed business incubator. The city opened the incubator to offer incentives for new businesses to set up shop inside it, thereby creating jobs for residents.