Shawnee’s sales tax revenues continue to decrease as Oklahoma begins to feel the economic pressure experienced months ago on the East and West coasts, city officials said.
But so far, those decreases - just under 3 percent so far for the budget year - have not affected services to citizens of Shawnee, likely because the city chose to prepare a budget that was “conservative,” Steve Nolen, interim finance director, said.
“We were very prudent in budgeting,” Nolen said. “We knew it was coming. Oklahoma is almost always 12 to 18 months behind on economic downturns than the East and West coasts but we also recover quickly. The real test will be the holidays.”
Nolen said that in comparison to other cities in Oklahoma, Shawnee is doing quite well. The reason, he said, is because many cities projected increases in sales tax revenues but are facing decreases in actual amounts received.
“It was anticipated here but is still disappointing,” Nolen said. “But if we were 20 percent down, it would be different. The problem is it has dropped off but it’s just not spiking back up yet.”
Sales tax revenues usually account for a bit more than one third of the overall budget and about 80 percent of the general fund comes from sales tax revenues, he said.
In an effort to lessen any effect of a slowing economy in Shawnee this fiscal year, the city approved a flat budget, which did not project for increase or loss in revenue. Department heads were also advised early on to prepare for cuts of about 5 percent to offset any reductions in revenue, City Manager Brian McDougal said.
“We’ve already talked to all the various department heads about expecting a 5 percent decrease, whether in training, fuel or other costs,” McDougal said. “The decreases are not a lot of money, so it’s sending a mixed signal at this point. If I see more than three months decrease, that’s something that will show me a slow economic downturn.”
McDougal said he expects the city might be down overall about $130,000 to $140,000 for the current fiscal year.
Some of the ways the city is preventing loss of services to its people are through “taking advantage of vacancies in positions,” he said. For example, if a city worker resigns and it takes three months to replace that employee, the city is able to save a bit of money while waiting for a replacement, which gives “extra room in the budget,” he said.
Also, it is “very easy in the capital budget to monitor and adjust for economic downturn,” he said, noting that many capital projects may be put off for a few months, or possibly until the next fiscal year, if the city needs to do so to save money for necessary expenses.
And Nolen said currently the city remains to be “cautiously optimistic that we’ll see a recovery in six months.”
“We’re not in an alarm state,” Nolen said. “There are multiple steps we can take to control costs without it affecting services or personnel. And the feedback we’re receiving is that all the department heads feel they can probably find 5 to 10 percent so it will not have an effect on the services or personnel at this time.”
Department heads were told to “identify what is critical, prioritize those items and see what can be put off,” he said. And if the decreases continue, Nolen said he might have to recommend line item reductions, which includes costs such as those for maintenance and operations.
The decreases are not extreme at this point and could be manageable with proper monitoring, Nolen said.
“We’re not in dire straits, we just need to start monitoring more closely,” he said. “We’re just taking it month by month.”
Nolen also said it is up to the citizenry to turn the current numbers back around for Shawnee.
“People need to shop Shawnee,” he said. “It will help and we’ll pull out of this quicker. Shop Shawnee.”
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Johnna Ray may be reached at 214-3934.
SHAWNEE, Okla. —
