Aragon officials are dealing with a 2013 financial shortfall following the $65,627 tax lien placed by the Internal Revenue Service last year.

The lien was later released, but Aragon Mayor Ken Suffridge said it will not relieve the city of the debt.

He said Aragon must now make tough decisions due to financial issues which include a $55,000 IRS payment plan for back taxes; $28,000 less in revenue from Local Option Sales Tax; $22,000 in unpaid 2012 property taxes; a $5,000 increase in Workers’ Compensation Insurance; a $5,000 increase in cost of fuel; a $5,000 estimated increase in goods and services and a $3,000 debt to the State Department of Revenue for back taxes.

“Being conservative, I’m assuming our revenues will be $150,000 to $160,000 short going into the last half of the fiscal year,” Suffridge said. “This is a very serious situation and should not be taken lightly.”

He has met with city staff and asked each department to implement cost saving measures. They have been instructed to identify any non-essential equipment and/or vehicles that can be declared surplus and sold to provide money to the city's general fund for operating expenses.

Suffridge has directed each department supervisor to eliminate the high cost associated with overtime by instead awarding compensatory time in accordance with the Fair Labor Standards Act (FLSA).

In February, he asked the City Council to rewrite Aragon’s leave policy to cut expenses. His suggestion was tabled until the March meeting.

“I am looking at every avenue available to collect delinquent property taxes and fees,” Suffridge said. “It is very apparent the city cannot continue to balance its budget at 100 percent while operating on 80 percent revenue.”

He said the council must first determine ways to increase revenue, cut expenses and devise a plan to collect delinquent taxes and fees, totaling an estimated $250,000.

Personnel expenses and salaries have increased while property taxes have remained the same, according to Suffridge.

“I have made recommendations to the council, and now they must decide what methods to legislatively support,” he said. “It is absolutely essential upon me, as mayor, to conduct the day-to-day operations of the city as a business.”

Suffridge said he has asked the City Council to make cost cutting recommendations prior to March 15, which is the beginning of the budget process.