Budget outlook not pretty, city told

The fiscal forecast is grim at City Hall.

Officials will probably have to consume less fuel, reorganize departments and somehow reduce the amount Wichita pays in fees to Sedgwick County to jail suspects.

Otherwise, the city will face a shortfall.

The financial forecast gets uglier next year and in 2013, city finance officials told City Council members Tuesday.

Budget and research officer Mark Manning initially projected a $3.1 million deficit this year because of growing pension costs, and stagnant and slow growth of sales and property tax revenue.

He suggested technological improvements, reduced fuel usage, fewer jail fees and management reorganization efforts could trim that to a $1.5 million shortfall.

It's up to City Manager Robert Layton, finance officials and council members to figure out how to close the rest of the gap by mid-August, when the 2012 budget must be approved.

Few details have been offered on how the city could do that.

Layton said the city may consider an early retirement program similar to what Sedgwick County considered earlier this year.

That provided voluntary retirees a choice of having the county pay its share of insurance premiums for five years or until the employee reaches age 65, or a lump-sum payment of 20 more days of sick leave for a total of 50 days of sick pay.

Layton said that's just one of many options.

"I think we can get there, and I don't think it will be through significant staff reductions like we've done in the past couple of years," he said.

Tuesday's discussion didn't include much about the additional shortfalls in the city's transit and central inspection budgets.

City officials have said council members will be asked to increase bus fares or cut back on the city's already bare-bones bus routes.

Meanwhile, fewer homes being built means less money for the city's central inspection office. Several inspectors have already been laid off and most employees have been asked to take furloughs.

The city's budget woes come after two years of significant cutbacks.

Layton said the city cut about $6 million in general fund spending in 2009 and another $9 million last year. Roughly 175 city jobs have been eliminated.

He said he thinks the city will have cut about $8 million more by the end of this year, with more cutbacks to come.

The city has $900 million in debt.

District 4 council member Michael O'Donnell called the figure startling and asked how the city could continue to increase spending while the local economy is in rough shape and the city is laying people off.

Finance officials said the 4.8 percent growth in spending in the general fund is driven primarily by pension and benefits costs — and some wage increases built into police and fire union contracts. No other city employees will get cost-of-living raises.

About a third of the city's $900 million of debt comes from outstanding special assessments created when the city contracts for water service, sewer pipes and new roads to serve new subdivisions, mostly on the fringes of the city.

Manning said the city's debt per capita and other measures put Wichita in a slightly better situation than other comparable cities that have a AAA credit rating.