(STILLWATER, OKLAHOMA / Dec. 5, 2016) — At Monday’s Stillwater City Council meeting, City Manager Norman McNickle asked council to approve recommended FY17 budget revisions, which were first brought up last October when declining sales tax trends were identified.
The proposed budget shows a reduction of $8.1 million for FY17, which was achieved by freezing vacant positions and unencumbered carry forwards and capital projects. Staff were also asked to cut departmental budgets by 20 percent.
McNickle stressed that current levels of service for police, fire and utilities will not be reduced and that the city was not recommending increases in utility rates.
During the budget review process, staff also addressed issues concerning the $4 million Stillwater Utilities Authority transfer to the General Fund for transportation projects for the past three years. McNickle explained that that kind of transfer was not sustainable and, without correction, the authority would be unable to make a transfer in FY18, which would result in deep cuts to city services.
“The City is not in a financial crisis,” McNickle said. “The bottom line is that city’s sales tax projections are being adjusted downward. However, with sales tax being a huge part of our budget, it requires that we look at reductions.”
While there has been speculation that the Stillwater Regional Airport’s new commercial airline service has contributed to the budget shortfall, McNickle said that the City is expecting to be reimbursed $2.9 million. He also explained that ticket sales are way above expectations, and that it was outperforming its business model Manhattan, Kan., during its first year of service. No debt was incurred for airport expansion. “We consider commercial air service an investment that will greatly benefit our community,” he said.
Like other Oklahoma cities, staff will work on the FY18 budget using a budget that will use a lower than normal sales tax revenue projection.
“It is apparent that municipalities will have to learn to live with significantly reduced budgets,” McNickle said, “It is unlikely online consumer purchasing habits will change; instead, it will most likely increase. If sales tax revenue continues to drop, we will need to examine the level of services that the City provides.”
McNickle stressed that residents should shop local. “Local purchases of goods and services increases the ability of the city to provide excellence in streets, public safety and other services, which contribute to the local quality of life our citizens have come to expect. With the recent growth in Stillwater’s retail, we hope that will have a positive effect on sale tax collections,” he added.
The City will be posting the FY18 Budget Process and Timeline on its website, stillwater.org, soon.
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