By John Schaffner

Mayor Shirley Franklin and the city’s Finance Department presented Oct. 15 the five-year Atlanta city budget forecast and the picture was not pretty.

The presentation made to the council’s Finance/Executive Committee projected that spending will outpace revenues in the five-year period and the city must find additional revenue if it expects to provide any additional services above the present level. The report indicates there is little margin for error in budgeting and spending during the five years.

Predictions included that property tax growth will be flat through 2011 and increase by 1.5 percent the remaining three years. Sales tax revenue will rebound, with seven-percent growth between July 2010 and June 2011 and two percent the next three years. Spending will increase by 2.5 percent a year, while revenues are expected to increase by an average of 1.4 percent a year. Health-care costs for city workers and retirees will jump by almost 50 percent, from $41.9 million to $61.9 million.

One bit of good news delivered by the mayor and Chief Financial Officer Jim Glass was that the balance for the city fund that pays for most services could be $57 million by June 2014. It was $6 million in June, which left the city with virtually no reserves for emergencies.

In a letter included in the five-year forecast presentation, the city can continue to provide services at current levels during the period if the economy improves. But Franklin warned the city must find additional revenue resources.

“Based on current projections and absent any significant new source of revenue, we will not be in a position to enhance service levels nor address several core priorities—such as replacing our fleet and making much-needed investments in our roads, bridges and sidewalks,” she said.

Among the presumptions included in the forecast is that the city will sell its jail, which officials believe will save Atlanta about $10 million a year.

The forecast, which was mandated by City Council, is the first of its kind for the city, which has struggled through the economic recession along with most governments.

The city has cut 30 percent of its workforce through layoffs and eliminating some vacant positions since April 2008.

Councilman Howard Shook of Buckhead, who chairs the Finance/Executive Committee, commented, “It’s going to be doing less with less.”

The five-year budget forecast can be viewed online at the city’s website: