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Funds come up light

Improvements to the city's infrastructure will be difficult to pay for this year, as the $5 million available is about $15 million less than normal.

April 21, 2010|By Melanie Hicken

CITY HALL — Funding for infrastructure improvements has been decimated by the protracted recession, city officials reported Tuesday, slashing the amount of money for projects like street maintenance and library renovations to nearly a quarter of what was once available.

Officials on Tuesday told the City Council that about $5 million would likely be available for capital improvement projects next year — far less than the nearly $20 million that used to be at their disposal during better times.

“We still find ourselves in the throes of the economic downturn that is having a significant effect on both our operating and capital budget,” City Manager Jim Starbird said.

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While the city’s capital improvement funds in prior years had benefited from major contributions from the city’s sales tax revenue, much of that has been diverted to the General Fund, which pays mostly for public services, to balance multimillion-dollar shortfalls in recent years.

Last month, city officials proposed to eliminate the transfer of sales tax revenue in the coming fiscal year as the City Council tries to fill a projected $8.1-million budget deficit without further cuts to city services. It will be the third year in a row that the City Council has been forced to fill a significant budget gap amid reduced property and sales tax revenues.

Potential long-term strategies for replenishing capital improvement funds could include tapping leftover savings from belt-tightening throughout the year, or increasing the transfer from Glendale Water & Power revenues, city officials said.

“That is a very sensitive subject, but that is an ongoing potential source,” said Finance Director Bob Elliot, referring to perennial complaints from some residents that the transfer inflates utility rates for customers.

With this year’s capital improvement funds tied solely to revenue from the Scholl Canyon Landfill and development fees, public projects in the coming year will rely heavily on a $24.6-million redevelopment bond approved last year, officials said.

The bond, to be paid back through improved property tax rolls, will fund a variety of infrastructure improvements in the city’s central redevelopment area, including $10 million in renovations to Central Library and $3.2 million for new soccer fields at Columbus Elementary School.

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