City approves annual budget
Published: Tuesday, September 20, 2011
Updated: Tuesday, September 20, 2011 04:09
Newark City Council approved the capital improvement program and annual operating budget for 2012 to 2016 last week. The budget is used to finance all city services and projects for the next five years.
Newark City Manager Kyle Sonnenberg said the budget provides funding for construction on the city's physical infrastructure and utilities.
"We also try to maintain a financial strength for the city through prudent investments that we predict in the capital improvements we foresee in the near future," Sonnenberg said.
He said the budget is created by his office and the city finance department. The city manager's office sits down with all city departments about capital improvement projects they would like to propose for the next year, while the finance department focuses on project utility costs and overall balancing of the budget.
Dennis McFarland, director of Newark's Finance Department said the budget forecast for 2012 is used to predict the budget for the next four years, even though the annual breakdown of the budget may vary. The budget balance for each year will not be as it is forecasted this year, he said.
"We actually have a deficit forecasted right now for 2013. When we get there it won't actually end up being that way," McFarland said. "We actually end the period having a surplus of around 1.5 million dollars each year."
He said official predict the city will have a cash balance of $26 million by 2016, which will allow the city to achieve AA credit rating. McFarland said his team did not forecast a significant utilities rate change based on New Castle County utility rates, but said that a rate increase would be needed in 2012.
"A one-time increase should be enough to cover us, and allow us to continue to maintain margin, but we should still need to track any changes done by the county to their rates," McFarland said.
District 1 councilman Mark Morehead said he was concerned about whether this capital budget included positive steps to infrastructure maintenance, specifically utilities.
"The capital plan certainly looks like we are working within the bounds of what we need to do," Morehead said. "We tend to push maintenance back a lot, so does budget continue to push back or are we fixing these past issues?"
McFarland said the budget has been designed efficiently and said the forecasts appear accurate.
"We aren't in a position where we can spend and do whatever we want, but we also aren't in a position where we can't spend anything at all," McFarland said. "If look at some other cities, we are actually doing pretty well."