On Tuesday night, the Champaign Finance Department presented to the Champaign City Council a five-year financial forecast detailing projected revenues and expenditures until the 2011-12 fiscal year.

Although revenues are projected to exceed city expenditures throughout the span of the report, Renata Matousova, Champaign’s financial services manager, said that the forecast is not as optimistic as last year. Expenses, she said, have begun growing faster than revenue.

“It’s not as positive as last year, but it is still positive,” Matousova said.

Champaign financial policy changed this year; while it used to require that projected expenditures equal no more than 99 percent of expected revenues, now it requires 98.5 percent. Although the report forecasts that expenditures will break this buffer zone as soon as next year, Matousova said that none of the burden will be placed on residents.

“(The forecast) allows us to sustain service levels without increasing taxes,” she said.

Factors contributing to the shift from last year’s forecast, detailed by the report, include a decline in the city’s telecommunication tax, a lower property tax rate and new recurring expenditures for the 2006-07 fiscal year.

Councilman Ken Pirok, District 5, said that the new policy requiring a 1.5 percent buffer zone between revenues and expenditures is reassuring.

“It’s nice that we have that little buffer in there because anything can happen,” Pirok said. “It’s unfortunate that the expenses are increasing, but it’s nice to know that we’ll be able to handle it.”

Although the buffer zone will most likely be broken, the city will still retain a surplus close to $1 million for each of the five years.

The report also forecasts that the local economy will continue to grow along with Champaign’s population, which will result in an increase in sales and income tax revenues.

Matousova said that while the report is based on research, it is still just a forecast.

“We have to make a lot of assumptions,” she said. “It is five years and a lot can happen.”