Your view: Budget review
Michael, there's some really great news and just in time for Christmas. The city auditors have just issued the final accounting on the last fiscal year, and the budget crisis seems to have disappeared.
The fiscal year ended on June 30th and the auditor's letter is dated October 24th. That's some time ago, so I guess the City Manager and City Clerk were waiting for the New Year to share the good news with the City Council and the public.
It seems that revenues to the city were better last year than Carroll Couch had predicted, and expenditures lower than the budget had allowed. It's really quite remarkable. At the end of June, and as part of their FY '04 budget request, Doug and Carroll estimated that there would be a $578,279.00 deficit for the FY'03 that was about to close (once again, these numbers have already been validated by city staff).
As it turns out happily though, our auditors report a FY 2003 surplus for the General Fund. Sometime between the last weeks of June and July 1st, $600,000.00 showed up. Spending had been over estimated and revenues underestimated.
It would have been higher if the Administrative Staff had stayed within their budgets. They went $88,012.04 (page 22) over what Council had said they could spend. Some people there apparently believe the City's Budget Ordinance is only just a series of suggestions. In any event, I'm sure they'll try harder this year.
On the other hand, this surplus amount would have been lower, if the DPS had been allowed to spend all the money budgeted for them. It seems that between the staff reductions ordered by the City Manager, the elimination of overtime for sergeants (without any corresponding increase in their salaries) also ordered by the City Manager, and the closing of the Main Street Fire Station for most of the summer, the DPS spent $77,738.52 less than Council told them to in the budget. Now, it looks as though none of that was necessary after all.
In any event, the city didn't run anything like the deficit Doug and Carroll said we would. Oh happy day. Oh happy, happy day.
Even more good news. The auditors said that as of July 1 this year, we owed $900,000.00 on the bonds to construct the SAHEC building, but had $946,688.89 in the fund. Better still, as of that moment, there were 14 more months to go with revenue coming in.
At the current rate of sales tax revenue in Sikeston, that means the 1/4th cent sales tax for SAHEC should leave us with around $922,000.00 ($700,000 annually from one quarter percent, divided by 12, multiplied by 14, plus $46,688.00) in that fund when the tax expires (even a little more with interest).
Since the additional eight classrooms have been estimated to cost $1.2 million, that means we'll have almost all the money we'll need. We won't need to raise taxes.
As an aside, we might want to spend the time between now and September working out an agreement with Southeast Missouri State University on their commitment of resources to support this expansion.
They've been laying off workers and canceling programs in Cape. A commitment by them in writing to support this expansion might be a good idea. At the very least, I think we should get their permission to put an expansion onto their building. As you know, we don't own it.
But wait, there's still more good news. It turns out that the estimates for the cost of the Land Clearance for Redevelopment Authority (LCRA) may have been on the high side.
The study that surveyed the target area (the only area in Sikeston where the LCRA can operate) identified only 83 buildings that were both in poor condition and vacant. Even at the high end of demolition at $10,000 a piece then, this means we'll only have to spend around $830,000.00.
In that study, there were over 200 structures that were identified as both "poor" and "occupied," but that means we know who owns them. All we have to do now is enforce our rental and our property maintenance ordinances. We can have these sites cleaned up without asking the taxpayers to pay for it.
This means we don't have to spend $8,000,000.00, and subsidize slum landlords, as some had feared. We'll only have to spend one tenth that amount to clean up the area.
Of the three reasons, then, for the doubling of our general purpose sales tax, that leaves only the need for a more competitive pay scale for DPS. That is a problem.
However, I'm pretty sure that if the financial minds at City Hall focus their talents, they can find a way to do it. Personally, I think the City Manager might want to rollback some of the 50 percent salary increases he's handed out to the senior staff at City Hall in the last two years. That way he could distribute it more evenly throughout the city workforce. He might also want to rethink the 70 percent increase in city employee pension benefits that's costing us $120,000.00 more each year, but that's just me.
Any way, and either way, it looks as though Sikeston will not need to raise taxes after all.
P.S. Doug and Carroll, I'm sure you were going to tell us all this, so I'm sorry if I ruined your surprise.