San Luis needs to slash nearly $2.6M

Cuts in spending are necessary to balance budget

SAN LUIS, Ariz. — A little more than a month before the start of a new fiscal year, City Hall is faced with making nearly $2.6 million in spending cuts to balance the new budget.

Apart from that shortfall in the general fund, the city is looking at cutting another deficit of $750,000 in the Highway Users Revenue Fund, from which the city taps money for street improvements. That means the city has to put planned road projects on hold or use funds from elsewhere in the budget to do the work.

State law requires the city to adopt a balanced budget for fiscal 2019-20, which begins July 1.

“Since February, the budget is what we have been talking about most in the (finance) department,” city Finance Director Monica Castro told the San Luis City Council as she presented the figures at a recent work session.

“We have made progress in reducing the shortfall in the general fund. We began with $7.6 million (in red ink) and lowered it to $4.6 million, and now we are at $2.6 million, without counting the deficit in the HURF.”

The council was told the shortfall in the general fund could be nearly halved by delaying construction of a building to house the city’s vehicle fleet, a project estimated to cost more than $1 million. The construction has already been postponed the past two years.

The council also heard a proposal to install signal lights at the intersection of 4th Avenue and Cesar Chavez Boulevard in phases rather than all at once. That would cut the HURF shortfall to just over $440,000.

The debate over budgetcutting measures comes as city officials say they are seeing a trend of diminishing revenue from the city tax on consumer sales. The sales tax traditionally has been one of the biggest sources of revenue going into the general fund.

While the city saves money in the short term by postponing projects such as the vehicle fleet building, inflation drives up the costs the longer it waits, San Luis Mayor Gerardo Sanchez said.

“The problem is that ev

ery year we wait to do a project, the costs rise,” he said. “With the building for the fleet, we began with (a cost of) $700,000 and now we are at almost $1.2 million. The cost goes up about $200,000 every year.”

Among agreed upon measures to help balance the budget, the council approved the hiring of one additional police officer in the new year, rather than the 11 requested by the police department.

Also put on hold were new employee positions sought by other city departments.

The council did, however, approve more than $50,000 in contributions in the new year to various nonprofit organizations that provide services within the city.

The council is scheduled to adopt a tentative budget for the new year by June 12.