The Jamestown City Council is making adjustments to the 2020 budget recognizing that forecasted revenues are not materializing before starting work on establishing a 2021 budget, according to Mayor Dwaine Heinrich.
"Obviously some things have changed since we enacted this budget a year ago," he said.
Heinrich told the City Council during a special meeting Thursday the anticipated income for 2020 is $750,000 below the numbers used in the budget that was finalized last October. The figure was derived by comparing the revenue budgets projected last summer to current projections using actual collections through the first five months of 2020.
The 2020 budget amendments are intended to more accurately project the balances for the Jamestown city accounts for the end of the year. Those new figures would be the starting point for the 2021 budget.
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With the changes made Thursday, the Jamestown general fund now has a projected ending balance for 2020 of about $807,000. That is far short of the ending balance of 2018 of $2.2 million.
"We have to have realistic numbers," Heinrich said, referring to the projections for the end of 2020 balance. "All of the reserves are gone."
Changes include a reduction in anticipated property tax collections of about $350,000 and a reduction in intergovernmental revenue, largely payments from the state of North Dakota under a variety of programs of about $400,000.
"This is not taking into consideration a loss of revenue due to the pandemic," Heinrich said.
The City Council also adjusted some expense items to correct previous errors. One change was necessary for the water department when it was found that the expense budget only included wages for the employees for seven months rather than the entire year.
Heinrich said the changes were necessary.
"These are the things the City Council does not have control over," he said. "We need to try to understand where we are at now before we move into the 2021 budget."
The 2020 Jamestown general fund revenue budget totaled $8.5 million with $4.5 million coming from property tax and $1.9 million coming from the state of North Dakota as intergovernmental revenue. The rest of the general fund revenue comes from a variety of licenses, fees, permits and other taxes.
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The reductions totaling $750,000 in anticipated property tax and intergovernmental revenue could reduce projected revenues for the Jamestown general fund to less than $8 million in 2020.
"That is a lot of money when you don't have any," said Heinrich, referring to the $750,000 reduction.
The City Council did not discuss any possible cuts to the expense portion of the 2020 budget. Councilman Steve Brubakken said reducing expenditures would be difficult noting that about 80% of the city's expenses are related to employee wages.
The City Council still does not have projections from the state of North Dakota regarding what levels of intergovernmental revenue to expect for 2021 although Heinrich said he anticipates it to be down in light of the hit on state revenue caused by the coronavirus pandemic.
City Administrator Sarah Hellekson said the North Dakota League of Cities had asked city administrators how cities would operate if state funding was reduced by 50% or more.
The Jamestown City Council most submit a preliminary budget by August. That budget can not be increased but can decrease to finalize the budget no later than Oct. 10.
The next city budget hearing is scheduled for 10 a.m. Thursday, June 11, at City Hall.
