The 2010 budget that Orchard City town trustees will consider for adoption on Dec. 9 does not dictate hard-and-fast spending commandments to the town staff.

Rather, it is a statement of spending priorities based on a “best guess” of what revenues will be available and what expected costs will be.

Actual amounts allocated in the budget do not have to be spent if revenues don’t come in as anticipated. While overspending an official budget can require adoption of a supplemental budget at year’s end, the administration and town board are free to decide not to spend budgeted amounts if the financial picture begins to cloud or darken as the year unfolds.

Two examples of that ongoing budget process were raised at the town board’s last budget workshop on Nov. 18. The administration’s 2010 budget document projects spending in both the Water Fund and the Parks Fund that may not happen if hoped-for revenue doesn’t materialize, or if revenues are lower than projected.

As explained in the town administrator’s budget message, “Many of the town’s sources of revenue are decreasing, and we have no control over them.” In addition to that, budgeted spending on a big water project next year depends on whether a long-term, low-interest loan becomes available – if money isn’t borrowed for the project it can’t be spent on the project.

Completion of the town’s park improvement plan depends on whether GOCO will finally look favorably on a grant request and approve $123,000 for Orchard City Park after two previous grant applications were turned down.

Even two badly needed road projects — the chip-sealing of 2100 Road and Fairview Road — could get scaled back or eliminated from 2010 spending if state revenue sources dwindle further.

The town Water Fund begins the year with a $1.76 million cash balance carryover from 2009. The administration’s budget proposes spending up to $750,000 of that cash cushion for the first phase of the West Main transmission line replacement project. “Next year the town could fund approximately $750,000 from the balance in the Water Fund,” states the budget message.

Moving forward with the project at this time depends on receiving a $2 million loan at one-percent interest for 30 years. The town administration says there is more than enough money generated annually from the new $5-per-month water capital construction fee to pay off that loan.

But if the loan doesn’t come through, current spending plans are off for the West Side transmission line project next year.

The same situation applies to the GOCO grant for Orchard City Park.

The town expects to get word on its $123,000 grant application early in December. If the grant is approved, the project will likely move forward rather than risk losing the grant.

But if the grant is turned down a third time, the mayor and Trustee Len Johnson have said spending on completing a pavilion may or may not go ahead. There appears to be sufficient revenue to complete part of the park improvements without GOCO grant money.

But, there is no requirement that the town spend the money, especially if the grant isn’t approved or if other revenues begin to lag.

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