Lebanon council approves preliminary budget with $315,000 reduction, warns staff cuts possible

The Lebanon City Council voted to publish a preliminary budget reduced by $315,000 and split across departments for public inspection, council members said, after weeks of warnings from staff and residents about the city's deteriorating cash position.

Treasurer Jessica (speaker 18) told the council that the city's general-fund borrowing will likely be required for payroll in April and again in May, and that the account used for short-term borrowing is down to roughly $140,000. "Every week that we drag this out is making it worse," she said, urging faster action so employees could know the likely outcome.

The motion approved on a roll call vote directed staff to publish a preliminary balanced budget that reduces expenditures by about $315,000 to be split across departments and to minimize personnel cuts where feasible; council members acknowledged some personnel reductions may be unavoidable. Alderman George (speaker 6) framed the action as a necessary step to meet the legal requirement to publish a budget for public inspection and to force concrete departmental proposals on how to achieve the target.

Public commenters pressed for transparency about the city's exact cash position and potential service impacts. One resident told the council "we deserve to know the city's exact cash position" and asked what services would be cut first if payroll could not be met. Several aldermen and the treasurer discussed revenue options — including adjusting water and sewer rates, exploring grants, and shifting allocable expenses into water/sewer accounts where legally permitted — but said some of those steps would require additional notice or ordinance changes.

Council debate focused on several trade-offs: cutting personnel is the most direct way to reach the dollar target because salaries and benefits constitute the largest share of the general fund; but cutting sworn police positions could increase overtime costs due to contractual minimum staffing requirements. The police chief (speaker 4) cautioned that "police departments don't police for profit" and described operational constraints and contractual obligations that limit where cuts are feasible.

Council members also discussed restructuring operations to save money over time, including combining streets and water/sewer into a single public-works department. Some aldermen urged a short-term across-the-board percentage reduction with department heads returning detailed cut lists; others favored targeted reductions and revenue adjustments. "We have to be willing to say we're going to be cutting personnel," the treasurer said, while pledging to minimize staff-level impacts where possible.

The vote authorizes publishing the preliminary budget and scheduling a public hearing; the council said the document can be amended before final approval, which is scheduled for a later meeting. The council directed staff to return with more granular numbers and department-level proposals in advance of the April 6 public hearing.