The Milford city government will use spending cuts, not tax or utility hikes, to close a budget gap expected to reach $115,000 this year and almost twice that in 2009-2010, city officials said in a budget hearing Monday night.


The Milford city government will use spending cuts, not tax or utility hikes, to close a budget gap expected to reach $115,000 this year and almost twice that in 2009-2010, city officials said in a budget hearing Monday night.

“We know what revenue we have coming in, and we are not looking to increase it,” city council member and finance committee chairman Irvin Ambrose said.

City officials hope to reduce the government’s office and management expenses by 5 to 8 percent for the year, according to City Manager David Baird, which would deal with much of the shortfall. The rest will come from reclaiming funds that were budgeted but not spent, like a $20,000 allocation for legal advice during contract negotiations with the local Fraternal Order of Police.

Milford Finance Director Jeff Portmann said the collapse of the housing market is the main factor driving down city revenues, as both planning & zoning fees and real estate transfer taxes have plummeted in the last two years, by 75 percent or more in some cases.

But even though cash flow is down, the city’s bank accounts are in good shape, Portmann said. Unlike larger cities that spent transfer tax money as it came in, Milford saved most of the funds it took in. Now, even with the economic downturn, the city’s transfer tax reserve fund stands at over $3 million.

“We’re in OK shape,” Portmann said. “I don’t want to say ‘good,’ but we’re OK.”

He added that because that fund is unlikely to grow anytime soon, the city still has to be careful about spending it.

“If we don’t curtail our expenditures, the fund will exhaust itself,” Portmann said. “If we do it right, it should be able to sustain itself.”

Members of the councils aid that even if the projection is good, the city will have to be careful to keep it that way years down the line.

“We need to look at everything,” council member John Workman said. “I don’t want to get into a situation where we’re OK now so we get comfortable. We need to look at everything.”