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Council agrees to use fund balance temporarily, aims to repay next year
Summary
Facing a roughly $282,500 shortfall after a denied tax increase, the Clinton council agreed by consensus to use general fund balance to cover immediate needs and directed staff to find ways to repay and/or present cut options during upcoming budget work sessions.
After reviewing options, council members agreed to rely on the city’s general fund balance to cover the immediate budget shortfall rather than cutting personnel or pursuing uncertain litigation.
City manager Trevor (speaker 3) explained multiple budget scenarios and told the council that using fund balance could bridge the gap for a limited time. “If we just use fund balance then we have about 3 years to be able to fund that, utilizing our fund balance reserves, until we have 1% of the fund balance left,” Trevor said during the projections discussion. Council members emphasized that any use of fund balance should be treated as an emergency step that must be repaid as soon as practicable.
By consensus the council directed staff to proceed with the budget as currently drafted, take the shortfall from fund balance and return with specific proposals in upcoming budget retreats on how to replenish reserves or identify targeted cuts.
