Responding to the continuing financial crisis on Wall Street, Mayor Dave Cieslewicz announced Tuesday that he has once again reduced projections for Madison's 2009 investment income, this time by $500,000.
Tuesday's reduction, nearly 10 percent of the city's earlier projection for 2009 investment returns, comes after the original draft of the 2009 budget was already reduced by $750,000 from 2008.
Cieslewicz said the market's instability in the past week means his office must act with responsibility when considering numbers for the 2009 budget.
The current projection is at $4.75 million, down from $6 million in 2008.
With the continuing volatility on Wall Street and uncertainty as we look to the future, we need to be fiscally prudent,"" he said in a statement. ""There is no way we can tell today what the investment environment will be like in three or four months. It's only prudent to ratchet down expectations.""
City Treasurer Dave Gawenda said the downturn in projected profits comes from a prediction that excess money the city has invested in money-market funds and other liquid assets will return less interest than in previous years.
""The mayor's adjustment there is based on the assumption that interest rates will go lower next year than what they are now,"" Gawenda said. ""If you're willing to assume the economy will be slower next year, it's kind of a corollary of that that interest rates will be lower also.""
The current draft of the 2009 budget is due to be released by the mayor's office next week.
