ST. PETERSBURG — A budget forecast presented to the City Council on Thursday warned that the city could end the fiscal year in September with a $2.3 million deficit.
One big factor, according to budget director Tom Greene, is the falling cost of fuel and the mild winter, which has translated into fewer utility tax collections.
Officials had projected the city would take in about $212.7 million in revenue for fiscal year 2014, but now believe collections will fall $1 million short.
Council members said that they are concerned about the gap and that the city may once again need to dip into reserves.
"I'd like to find ways not to use reserves," council member Charlie Gerdes said. "It's not the amount so much as it's being taken from a bucket that's already hurting."
The budget forecast also warned that the city's reserve funds could end the year about $9.7 million below target.
Greene tried to temper council members' concern.
He cautioned that the report is a snapshot, as projections based on three months are difficult.
"We have not included in this calculation the fact that we're going to have to do some mid-year cleanup," he said. He hopes to make up the gap in the coming months and said projections don't include any salary savings from recent vacancies or leftover funds from closed-out capital projects.
The budget also doesn't include salary savings from people who left after Dec. 31 and other offsets, but does include expenditure increases associated with Mayor Rick Kriseman's new hires, Greene said.
Gerdes said he knows the staff is working on the issue, but wondered if there's a way for council members to get a sense of where things are sooner. "We're already in the second month of the second quarter," he said.
Kriseman plans to roll out a program that will encourage departments to find savings in the next several months.
Interim City Administrator Gary Cornwell said the mayor wants to instill a sense of "friendly competition" among the departments. They would get some sort of incentive or prize for coming in under budget.
"We don't have the specifics of it yet," Cornwell said. "It'd almost be some sort of contest."
Former Mayor Bill Foster had a similar idea, Cornwell said, and set a general 1 percent goal for departments. Kriseman wants to keep it more open-ended, Cornwell said.
Overall, Cornwell said, the budget gap is due more to lower revenues than out-of-control expenses, but city officials did cite an increase in high-cost workers' compensation claims.
"That $2.3 million number looks a little scary, but from our aspect it's a very manageable number," Cornwell said. "We're hopeful it'll be better."
Kameel Stanley can be reached at firstname.lastname@example.org, (727) 893-8643 or @cornandpotatoes on Twitter.