Tega Cay isn't operating in the red.
But in mere months, that picture could change, city leaders said this week.
"If we don't do a budget amendment to reduce spending, then in September we will be [in the red]," Tega Cay City Councilman Les Conner said.
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Approximately $1 million is in Tega Cay's general fund operating account, City Manager Grant Duffield said, brushing aside the idea of a budget deficit. Yet, budget trimming is planned, he said.
"There are proposals that the staff is drafting to present for council consideration to result in cost savings for the city," Duffield said. "There are multiple incremental deductions across all operating departments."
Those proposals are to be the panacea to what ails Tega Cay's budget, Duffield said, though he declined to give specific details for the contingency plans and what could be eliminated.
The city's budget cycle runs from Oct. 1 to Sept. 30, Conner said.
"What we're looking at is revenues for the rest of the year," he said. "We based our original budget on the county's numbers. But I believe the county's projection to the city for tax revenues is going to be short from the original estimate."
So the wait begins, he said.
"The rest of us are waiting on the city manager to present a budget amendment to council that will detail revenues and expenditures for the rest of the year," Conner said. "That means there's going to be some expense reductions for the rest of the year."
This is the case, although tax revenue paid by York County to the city in January and February topped $2 million, Conner said.
Still, Councilman Larry Harper contends the council recently was alerted to some "issues." Those issues' lingering effects are expected to impact the city's revenue, he said.
"There's three things that council was made aware of within the last two weeks that will have a significant impact on revenues," he said. "The county underestimated their assessment [and] Toll Brothers is no longer in the picture. The two issues are significant with cash flow."
In a response triggered by some residents' e-mails, Mayor Bob Runde also contributed the shortfall to the Toll Brothers pulling out of the Gardendale project and Mercedes Homes filling for bankruptcy.
Via e-mail, Runde wrote:
"The County Auditors called and said they had made billing mistakes resulting in a reduction of property tax income in the amount of $185,996," he wrote. "The above three items will result in reduced revenue of $321,852."
The city's current budget reflects a contingency amount of $130,993, Runde wrote. That means a budget shortfall of $190,859.
But nobody is talking about how the three or four plans will fix the shortfall problem.
"I'm not going to go into any details about it," Harper said. "They want to tread lightly and think about it and meet."
There's some talk about money -- some $215,000 earmarked for parks and recreation -- being used to fix the shortfall.
"I'm not privy to that at this point," Duffield said. "I know there has been some discussion, but I don't know that it will be part of the formal proposal."
According to Runde's response, the three proposals suggest using some of $215,000 given to the city by Stonecrest developer Herman Stone for parks and recreation. However, most of the city council failed to give an approving nod to is use the money, so leaders are revamping just how to address the shortfall.
For now, the $215,000 sits in a separate account from the city's general fund, Conner said.
"Council has not moved any of that money," he said. "It's still in that account."
Meanwhile, a series of e-mails further link money designated for the city's parks and recreation department to the city's finances. The e-mail contends that $350,000 designated for parks and recreation was used in early 2008 to complete the Glennon Community Center.
"At the time there was a need within the community to finish the community center," Duffield said. "The developer of Gardendale offered the city the opportunity to utilize some of the funding that he had set aside in the Gardendale development agreement.
"The actual amount was $320,000 not $350,000," Duffield added.
A section of the e-mail also contends the city "wouldn't formally commit to repaying the money back" to parks and recreation.
"I don't have a clear recollection of what was agreed to regarding the repayment of those funds," Duffield said.
Harper added, "The intention is that that money will be replaced."
Runde's response also notes the council's intent.
"Council has made it clear on several occasions that
it intends to fully put back and designate those funds for Catawba Park," Runde wrote.
The question is when.
For now, city leaders focus on the budget and its shortfall, Duffield said.
"There is the potential for there to be a shortfall," he said. "That's why we're taking the steps to modify the budget."