City council members continued their budget discussion late Monday afternoon, debating essentially how much money to pull from its savings account to complete its 2020 budget.
The city's projected expenses outstrip its projected revenues for the 2020 fiscal year, pushing the city to dip into its reserves to balance its general fund budget. Rather than spend deep into those reserves, some city council members prefer that some departments tighten their belts.
By the end of Monday's budget meeting, the council signaled its willingness to cut roughly $2.1 million from the general fund to help reduce the amount of reserves it would use. Currently, the budget for 2020 calls for pulling $6 million from reserves.
The $2.1 million in cuts come from a list prepared by city staff, which is divided into three groups categorized by severity. The first group of suggested cuts would have minimal impact on city services, the second would have a moderate impact and the third would have significant effects.
Council members indicated to staff that they would be willing to make cuts from the minimal and moderate impact lists, including cuts to certain types of overtime used by fire and police personnel, a reduction in travel and training by fire and police departments and deferring maintenance for some fire stations.
The proposed cuts would also eliminate the city council's contingency fund, a $30,000 budget item used at the council's discretion. Council members are eager to show the public that they're willing to make cuts as they put together this year's budget.
Many of these proposed general fund cuts impact the city's fire and police departments, which make up a majority of the city's general fund budget. As such, not every council member was in favor.
"I will not support the moderate impact cuts," said council member Penny Ronning.
The city maintains reserves at 29% of its budget, which this year is roughly $12.7 million. This amount is required by city policy and helps demonstrate Billings' financial health. On top of that Billings also maintains what's known as unobligated reserves, which it can use to shore up its budget during years when expenditures outstrip revenue.
The city currently has $9.6 million in unobligated reserves and its proposed 2020 budget calls for using about $6 million of it make ends meet.
Council members understand they can't continue to spend into reserves, which is why they're proposing the cuts to the budget. Ultimately, they hope to go after a public safety mill levy, seeking voters' approval to better fund the city's police and fire departments.