Council to vote on 'hold-the-line' plan for fiscal year
Money. It's what Crescent City wants - and might actually have this year - even if it's only just enough.
After one last public hearing at Monday's Crescent City Council meeting, the Council will vote on the proposed $16,865,446 budget for 2014andndash;2015, which in its report city staff described as "hold-the-line."
"I call it a bare bones budget," City Manager Gene Palazzo said. "We budgeted real tightly. It's a balanced budget, but no frills, though. We're really doing essential services and focusing on maintaining and training staff to make sure we have the tools to get our job done."
Like the 2012andndash;2013 budget, the revenues equal the expenditures in this year's plan - that's a budgeted $4,533,171 in the general fund - with revenue sources like sales and property taxes remaining largely unchanged.
There is a new $74,759 revenue increase, however, which at first glance sounds like good news. But according to the staff report, it's basically no news, considering the major item accounting for the increase - an estimated $60,000 that will be received to reimburse the city for insured Cultural Center repairs to a water-damaged floor- is being spent on that floor repair.
But as they say, no news is good news, especially in light of the fact that the new budget didn't call for any staff layoffs or mandatory furloughs, Palazzo said. There's even a few jobs - an accountant position and a project manager position in the Public Works Department among them- that the city is looking to hire for.
Also, unlike in past years when city funding for the Chamber of Commerce was slashed by $15,000 and swimming pool Sundays were scrapped to save money, there wasn't a need for service reductions this time around.
"We're just barely hanging on with the services we provide," Palazzo said.
Additionally, the general fund also has a reserve fund balance of about $1.7 million, Finance Director Emily Boyd said, in line with a policy that requires the city to keep a reserve of the 25 percent of the operating expenditures each year.
"That million dollars doesn't quite get us to that 25 percent, but it's there for events where we need funds that aren't budgeted - the unknowns." Palazzo said. "Also, some of it's for cash flow. We operate a lot on grants, and we need dollars to make those work."
Speaking of grants, the city is vying for a few this year, including a $2 million Community Development Block Grant that Palazzo said should be awarded in July or August to go toward sewer improvements on B Street, among other projects.
Also, project income money from last year's grant has to be spent before the 2014andndash;2015 CDBG funds can be used. Palazzo said that money - about $163,500 - will be used on renovations at the pool as well as equipment and software upgrades for the Crescent City Housing Authority. There will be a separate public hearing and Council vote on those unused funds at the meeting.
"We're going to continue applying for grants to try and continue the good work we're doing in the community," Palazzo said.
Also in the good news column is the water fund, which unlike in 2013 is balanced, thanks in large part to that 60 percent water rate increase that began taking effect in January. The fund is now in "stable financial condition," according to the report. In fact, because of the rate hikes and overestimated expenditures in the 2013andndash;2014 budget Boyd said there's even a $91,000 positive operating result.
"We're moving in a positive direction," Palazzo said.
The same can't be said for the sewer fund, however, which still stinks despite the recent 3.6 percent cost of living increase. The fund continues to operate at a deficit, estimated at $482,555, which is even worse than the $388,349 deficit staff estimated this time last year for the 2013 budget.
"That fund has been struggling for some time now, and it continues to struggle," Boyd said. "We're attempting to right that ship, but it's a process."
Righting the ship involves renegotiating the terms of a $44 million state loan for the improvements made at the wastewater treatment plant, for which the city pays a 2.4 percent interest rate, as well as perhaps another rate hike.
"If we're not successful with the state, we're going to have to go back out to the ratepayers and do another increase," Palazzo said. "Once we complete our negotiations and try to lower that interest rate then we'll redo those numbers. Hopefully it won't be as severe as it would if we had a higher interest rate."
In the meantime, because of the shortfalls Palazzo said that money the city should be saving isn't being saved - like stashing several hundred thousand away each year for street and drainage updates, for instance. He said that without that money city infrastructure will continue to deteriorate, and at some point there won't be money there to maintain it.
As mentioned at a budget workshop in late May, business owners and city residents can help out in that regard by helping to maintain the sidewalks and treewells in front of their businesses and houses. Palazzo said the city is hoping to schedule educational outreach sessions to help folks with those projects, but, as we all know, money is tight.
"We want to do some more outreach and education," Palazzo said. "It would certainly be beneficial but we're on a tight budget."
The Crescent City Council meets at 6 p.m. on Monday at the Flynn Administrative Center at 981 H Street. Agendas and staff reports can be found atwww.crescentcity.org.
Reach Aaron West at email@example.com.