Surprise, AZ News blog

Surprise AZ (April 22, 2009) The City of Surprise is projecting less commercial construction next year, a key factor in a draft FY2010 budget that calls for a $1.9 million reduction in the city’s General Fund.

“Regretfully, additional layoffs will be necessary to achieve the reductions I believe are required,” said Surprise City Manager Randy Oliver.

The draft budget, presented to the City Council Tuesday afternoon, calls for the elimination of 23 positions, nine of which are vacant. Oliver says the city will reduce positions in support departments and in those whose workload is impacted by the slow economy. There will also be some reassignments due to administrative restructuring that are a result of the staff reductions.

The expected continued slowdown in commercial construction in Surprise accounts for $1.3 million of the anticipated shortfall. $600,000 in additional operating expenditures makes up the rest of the $1.9 million adjustment.

The city collects construction sales tax and other fees from commercial construction activity, so a downturn results in a diminished stream of revenue into the city General Fund. “The recession is ongoing and continues to take a toll on the city budget,” Oliver said.

Since December, the Surprise city council has acted on City Manger recommendations to reduce the current FY2009 budget by $6.8 million, which included the elimination of 32 positions. The city also identified millions in expenditure reductions, reduced employee benefits, froze pay, and took a no-growth approach to departmental budgets, “but more needs to be done,” Oliver said.

Oliver warned if revenues decline or if there is a reduction in shared revenues from the state of Arizona, the city’s ability to provide services will be affected. “We have already cut millions, and if the state reduces shared revenues, we will immediately be into service reductions,” he said. “If the legislature reduces shared revenues by 10%, that will be painful,” he said. “A 20% cut would be brutal.”