The city of Manhattan has found itself in some financial trouble after nearly a decade of spending more than it makes, and city staffers are trying to figure out how to get things under control with budget season around the corner. Last month, city officials last month told commissioners they expect the general fund reserves to drop from $11 million to $6 million by the end of 2024, well below the $10 million threshold above which they’d like to keep the city’s cash reserves. Interim city manager Jason Hilgers said the shortage has been building since 2015. He said the city during that time “had to manage periods where expenses outpaced revenues, which required (the city) to draw down cash reserves to offset the shortfall.” While the city received $15 million-$16 million in federal COVID-19 relief funds in 2020 and 2021 that helped offset revenue declines a bit, that was a one-time influx of funds. Since then, Hilgers said, the city has made efforts to avoid further into debt. “The city has had to make adjustments such as delaying capital improvement projects, reducing equipment and vehicle purchases, and limiting travel and conferences to manage budget shortfalls,” Hilgers said. He added that debt is “not necessarily a negative thing, as it can allow the city to pay for needed infrastructure and improvements over time.” However, the city has opted to be more conservative with its use of debt recently, and Hilgers said the city must “be very cautious about optimistic revenue projections and making necessary expenditure cuts” in the future.
Source: themercury.com
