City projected to finish year with $105,000 budget surplus

Last fall, as the El Paso City Council and the public-safety unions battled over money, the city appeared to be in a precarious situation.

But after concessions by the unions and cuts elsewhere in the budget, El Paso appears to be in better fiscal shape than some other Texas cities and far better than elsewhere in the country.

After the city closed the books on the first quarter of the fiscal year, budget officials projected earlier this month that the $317 million general fund would finish the year with a $105,000 surplus.

Revenues are expected to come in $239,000 less than expected, but that will be offset by expenditures projected to be $317,000 less than anticipated.

"It's always subject to change," Deputy City Manager Bill Studer cautioned about the projections. "It all depends on what happens in the world."

So far, El Paso seems poised to finish the year in the black.

Helping it are sales-tax collections that are 6.7 percent better than they were this time last year -- ninth-best of Texas' 20 biggest cities. Also helping are operating expenditures that are expected to be almost $1.3 million under budget.

A 0.03-percent surplus might not seem like much to crow about, but it's a lot better than what some other cities are dealing with.

For example, a slightly larger Texas city -- Fort Worth -- expects to end the year spending more than it takes in.

"We're still looking at a shortfall, but the numbers came back better than they were," said Bob Begley, a city spokesman.

Fort Worth budget officials earlier this month predicted the city would run a $24 million deficit in its $547 million general fund budget. The losses will come out of the city's $60 million fund balance.

Many cities outside of Texas are doing far worse.

"Texas cities generally are well off and we're well off compared to other Texas cities," Studer said.

The National League of Cities says municipal finances are a reflection of the overall economy -- but one that is delayed by 18 months or longer. That is because declines in property tax collections lag behind economic downturns since it takes time for property values to slump and even longer for those reduced values to be assessed.

Budget shortfalls largely due to declines in property-tax and sales-tax revenue led "80 percent of city finance officers (to) forecast that their cities will be less able to meet needs in 2011 than they were in 2010," the National League of Cities said in a report published in October.

"In general, things are pretty bad and they're probably going to continue that way," Amanda M. Straub, a spokeswoman for the League of Cities, said Friday.

Cities are hurting worst in regions where the economy suffered most.

Cincinnati, for example, has cut 365 jobs since 2008 in a city that is about half the size of El Paso. Even so, the city this year closed 19 pools and two recreation centers and cut funding for school nurses and to clean up vacant lots in the face of a $27 million deficit.

And Cincinnati's financial future looks bleak.

"The lingering structural imbalance within our city budget cultivates an environment of divisiveness and fear, with various segments of the administrative staff pitted against each other," City Manager Milton Dohoney Jr. said last week in a statement. "This is not a bedrock for productivity."

In New Jersey, Camden was forced to make deep cuts and laid off up to 380 employees -- including police officers and firefighters -- because of budget woes.

El Paso, by contrast, seems to enjoy an embarrassment of riches. While other cities are losing property-tax revenue, the Sun City anticipated a 5.8-percent increase for this year when Studer and others drew up the budget. And sales taxes are improving as well.

Careful budgeting has helped the city stay fiscally sound, but Studer said growth at Fort Bliss, the University of Texas at El Paso and the Medical Center of the Americas also are to be credited for the healthy finances.

"I think Fort Bliss has insulated us to some degree from some of the things other cities are facing," he said.

Marty Schladen may be reached at mschladen@elpasotimes.com; 546-6127.