Phenix City officials admit services may decline

By Laura Ann Sills - email

PHENIX CITY, AL (WTVM) - Phenix City, AL officials say they are starting to feel the pinch of the recession.  And, they are publicly admitting their ability to provide services will be severely affected.

They city's financial director, Stephen Smith, broke the news this morning of a million dollar shortfall in next year's budget.

Smith said there are three big factors causing the budget shortfall, and they all have to do with sales tax.

First, the national recession is causing high unemployment rates, "those people are not spending the money they would spend if they were employed."

The city has seen an average of 3.2% population growth for the last 4 years, but unfortunately, revenue has flat-lined.  Smith explained, "A lot of the new growth we are getting is military families.  Well, a lot of their spending is at the exchange on base, so they are not buying all their groceries and other items in Phenix City."

He also said revenue is being pulled from the city by the growth in Columbus and Opelika. In the last few years more Super Wal-Mart's have popped up in the surrounding area and Phenix City's Super Wal-Mart isn't the only one.  "We used to see a lot of Georgia license plates there, that was the only Super Wal-Mart in the metropolitan area.  Well, now there are three in Columbus and one in Auburn. Where there used to be one, there are now five," said Smith.

When asked how Phenix City residents will feel the effects of a tight budget, Smith admitted, "Our ability to keep the streets paved and clean and pot holes patched… Parks and Recreation keeping the grass cut… the number of times a police car drives by your house."

In addition to the million dollar shortfall, they are also dealing with a half-million dollars in expenditures that were not budgeted.

The next budget work session is set for July 6th, 2010.  The City Manager is set to bring recommendations to the council for cutting money from the budget and ideas for revenue sources.

Count on News Leader Nine to be at that meeting and bring you the latest.

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