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 amount in 2009-2010, city officials said during 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 amount in 2009-2010, city officials said during 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, which would deal with much of the shortfall, according to City Manager David Baird. The rest will come from reclaiming funds that were budgeted but not spent, such as a $20,000 allocation for legal advice during contract negotiations with the local Fraternal Order of Police.

“That kind of makes it easy,” Milford Finance Director Jeff Portmann said. “Next year’s budget will be harder.”

Portmann said the collapse of the housing market is the main factor driving city revenues down, 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.

The cash flow into city coffers has slowed, but 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 received. Now, even with the economic downturn, the city’s transfer tax reserve fund stands at more than $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.”

The city will start putting information from Monday’s budget hearing to use over the coming weeks as it designs the 2009-2010 budget. Department heads have already met and submitted their budget requests for the coming year, but it’s up to Portmann, Ambrose and the city council to cut $600,000 in new requests down to size before putting together a finalized budget.

“It’s really all about prioritizing, and making sure every dollar we spend is necessary,” Baird said.

Members of the council said that even if the projections are 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.”