City News ServiceCity financial management officials told the City Council Monday that a possible spate of early retirements and higher fuel costs could put the budget out of balance by nearly $6 million by the end of this fiscal year.
The city is already on track to spend $772,000 more than it is taking in, based on actual revenues and expenses in the first quarter of this fiscal year, according to a report delivered to council members.
Because of changes enacted for the retiree health system, early retirement pay could jump by $3.3 million, said Mark Leonard, the financial management director.
Jay Goldstone, the city’s chief operating officer, called it a “potential exposure” for higher spending, the amount of which should be clearer in a few months.
Leonard said gas prices, which remained high in the July-September time period, could add $1.7 million to expenses this year. He noted that fuel costs have dropped in recent weeks and said he hopes the trend continues.
Leaving out the unknowns of the early retirement costs and future gas prices, actual first quarter results for revenues and expenses were close to projections in the budget, with a variance at the end of the fiscal year expected to be no more than 1 percent, he said.
The results also show that city reserves are on track to be around $101.1 million, or 8.9 percent of the general fund, according to Leonard. The city target for reserves is 8 percent.