The recession is making it tough for many folks to pay their bills and balance their budgets. The same goes for the City of Myrtle Beach. City council got a first warning today on how tight the budget will be for the year ahead.
Myrtle Beach's budget director says the city will have to work with revenue that's about the same as it was in 2007, but with 2011 demands.
Mike Shelton told council Tuesday that revenue from business licenses is way down this year, especially in the hospitality industry, where revenue is off by about 4 to 6 percent.
That money goes into the city's general fund to pay for basic services like police and fire protection.
Shelton says it's too early to say how big the shortfall will be or where any cuts should come, but officials will lock down estimates over the next six weeks. The city has a $10 million general fund balance it can fall back on to pay the bills, but Shelton says using that money carries some risk. "That's a one time measure. Once you use it it's gone and unless you replace the flow of revenue then you're going to be back in the same situation the following year and not have a fund balance to fall back on."
Shelton says if the city uses the fund balance to pay its current bills, it could have to resort to borrowing money in the middle of the year. That could hurt the city's credit rating and cost the city more in the long run.
Shelton says next year's budget will be among the most difficult he's had to work with in 25 years with the city.
City council took no action on the budget outlook Tuesday. They'll start discussions for the 2011 fiscal year in April.
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