Westminster – City leaders are reviewing their projected 2006 budget in anticipation of coming up $700,000 short of their revenue expectations.
A slower-than-expected sales-tax rebound is to blame for the potential shortfall.
At a City Council meeting Monday night, City Manager Brent McFall told council members that he expects the city will see an increase in sales tax revenue in 2006 compared with 2005, but that increase won’t be what city officials originally had hoped.
City leaders had expected to bring in about $86.2 million in total revenue in 2006, but are now expecting about $85.5 million, a 0.8 percent drop.
Assistant City Manager Steve Smithers was quick to say Tuesday that officials believe cost savings in other areas will help offset some of the shortfall. But, he added, rising energy costs and the forecasted economic impact of Hurricane Katrina will probably mean the city will still come up a little short of its goals.
“Bottom line, we were able to preserve the adopted budget, but we weren’t able to add much to it,” Smithers said. “… We are being cautious in our projections.”
Officials will present recommendations to the City Council on how to absorb the shortfall early next week.
Westminster plans its spending on a two-year timetable. The current budget comprises 2005 and 2006.
Money from sales tax, which is Westminster’s largest revenue stream, dropped dramatically in 2002 after reaching an all-time high in 2001. Since then, the city has seen steadily increasing sales tax revenue.
But the increase has been hampered by stagnating revenue from the aging Westminster Mall, which suffered another blow this month when department store chain Mervyns announced it will close all its Front Range stores. To combat that, the city plans to soon break ground on a new, 215-acre development at 144th Avenue and Interstate 25.
Staff writer John Ingold can be reached at 720-929-0898 or jingold@denverpost.com.
