Des Moines City Council members began their budget discussions facing a $1.4 million deficit. The city's total revenue in 2011 is projected to be nine percent less than this year.

Property tax and utility taxes, the city's two largest sources of revenue, are both estimated to decline next year.

Property tax and utility taxes account for 19 percent and 20 percent, respectively. Utility taxes are traditionally a stable revenue source.

Mayor Pro-Tem Dave Kaplan said this is the first time in a long time he has seen utility tax revenues decrease.

Taxes make up 62 percent of Des Moines's total revenue.

Finance Director Paula Henderson said the economy has been going up and down, making it difficult to create a financial forecast.

"I have never been in an environment like this," Henderson noted.
However the budget may not be as dire as it sounds. Henderson purposefully budgeted for the worst-case scenario. With several initiatives that could positively and negatively impact the city up for a vote in November, Henderson budgeted for any expenses that could be incurred and left out any possible revenues.

Initiative 1082, which would allow private companies to provide unemployment insurance would cost the city $30,713. City Manager Tony Piasecki said if the initiative passes the city would no longer take the premium for L & I out of worker's paychecks, which they are required by law to do now. But the city would still have to pay.

The two initiatives to privatize liquor sales in Washington could also impact sales tax and profits that come to the city from the Washington Liquor Board.

Henderson did not include possible revenue from a King County initiative to raise the sales tax. If passed it would bring in $400,000 in revenue to Des Moines next year.

Des Moines saw a $50,000 drop in fines and forfeitures from 2009 to 2010 from $304,534 to $250,000, a 17 percent drop. Fine and forfeits are expected to drop another 19 percent next year, with expected revenues of $201,000.

Piasecki said this was because of the loss of police officers dedicated to patrol. Last year to balance the budget, five Des Moines police officers were laid off. To maintain services police could no longer be dedicated to patrol.

Piasecki said the Des Moines police have been directed to focus more on driving infractions.

The biggest cuts being proposed involve cutting city staff positions. Piasecki is recommending the elimination of the recreation manager, building inspector, land use planner and a civil engineer.

Piasecki is also recommending the city defer equipment rental assessments and computer replacement assessments, which would save the city almost $300,000. Potential cuts to staff recommended by Piasecki equal $676,131.

The total for recommended additional revenue and cuts recommended by Piasecki equals nearly $1.2 million.

No big cuts to parks and recreation or police officers are proposed this year to balance the budget.