City Manager Joe Lessard: ‘We do not have a structural deficit’

By Stephen Floyd, Ashland.news

The Ashland Citizens’ Budget Committee discussed the role of crisis planning in the city’s proposed two-year budget during a scheduled meeting Thursday, May 4.

The topic was part of a larger discussion on the proposed budgets for administrative departments, with conversations ranging from franchise fees to public accountability.

The committee, made of community members and elected officials, will make a recommendation to the City Council, which must then pass a budget by June 30.

City Manager Joe Lessard started the discussion by attempting to correct the idea that the proposed budget is coming up several millions dollars short.

The proposed budget includes $84.8 million in revenue for the general fund and $91.5 million in general fund expenses, creating a perceived gap of $6.7 million. Lessard said this amount is rolling over from the current fiscal cycle and was not counted as revenue because it represents money already on hand.

“The budget is balanced,” said Lessard. “We do not have a structural deficit, we are well within safety margins in terms of our policies and we believe the city is in a strong financial condition.”

While on the topic of carryover, Lessard explained the proposed budget has about $45 million in contingency funding in the general fund to help the city comply with best practices for budgetary preparedness. He said having the cash on hand can help the city qualify for funding packages, and would become an emergency resource in the event of a disaster like the COVID-19 pandemic and resulting supply chain issues and staffing shortages.

“One of the risks we face is economic upheaval,” he said. “We will always face that.”

Lessard said this $45 million was different from the $6.7 million carryover from the previous budget cycle. The $45 million was a deliberate step to build a contingency fund, with a target of setting aside 20 percent of general fund expenses averaged out over three years. The $6.7 million were funds that had been budgeted but went unspent, largely due to positions in City Hall that went unfilled, and should not be a regular occurrence.

Lessard said one of the goals of the present budget was to restore services at City Hall to pre-pandemic levels, including staffing. He said this was being balanced with the possibility of responding to another crisis in the next two years.

Lessard said his office plans to monitor the budget to make sure the city is prepared to respond to a crisis. He said the budget also includes investment in the local economy to help improve the city’s chances of surviving economic uncertainty.

“We’re not just passively taking what happens, but we’re trying to be proactive,” he said.

Committee Member David Runkle said he was concerned about the possibility of a new crisis affecting the city, saying that current economic and political uncertainty has made 2023 feel like 2020 “without the masks.” He said this should inspire the city to take a more conservative approach to budgeting this fiscal cycle. 

“We should be careful in this budget to be conservative so we don’t spend a lot of money and then cut back,” he said.

City Councilor Eric Hansen said a financial crisis is difficult to predict and multiple economists could provide multiple opinions on the matter. He said, while it is important to plan ahead for disasters, it is also important to understand their unpredictable nature.

“We’ve endured lots of hardships and hit the rocks twice and crashed hard and bounced back,” said Hansen. “I appreciate avoiding those kinds of struggles, but I also don’t know how to bring the crystal ball into the conversation.”

Committee Member Eric Navickas said the economy may be stronger than some people think, with the Federal Reserve attempting to slow down growth by raising interest rates. He said, even if the country enters a recession, higher rates mean more room to lower them and stimulate growth.

Navickas added that public opinion and confidence shape economies as much as policies and public spending, and said he supports the proposed investments in local businesses in the budget. 

“I’d really encourage us to continue down the path with the budget proposed here and investing in our community,” he said.

Email Ashland.news reporter Stephen Floyd at [email protected].