The Neosho City Council made it only six pages into the proposed budget for fiscal year 2014 in a budget work session held Tuesday evening.
Instead, councilmen spent the majority of the hour-long session expressing their concerns with the city's proposed reserve spending in the coming budget year.
The second draft of the proposed budget reflects about $1 million more in expenditures than revenues for 2014, though the city has been planning for the past few years to make that difference up with reserves, said Neosho Mayor Richard Davidson.
Davidson said the city had been building up its reserves to address added expenses expected in the coming year, such as the expiration of the SAFER grant, which funded about $400,000 worth of Neosho Fire Department salaries.
"I can remember since 2010, when we started doing town hall meetings, every three months we showed a graph that showed our debt was going to increase through 2015," Davidson said, noting that the quarterly presentations also recognized the city's revenue problem. "Every three months we said 'we know the SAFER grant is going to run out in two years, we're planning for that, but we have a revenue problem.' To sit here today and say 'oh my God we're spending reserves,' that's been a plan for the past four years as part of this recovery because we knew the SAFER grant was going to expire, we knew we had to build reserves."
Councilmen only began reviewing the budget last week, when the first work session was held July 30, and have not yet suggested any budget revisions.
The council is set to meet for three more budget work sessions, each Tuesday in August, with the budget to be voted on in September and in place by Oct. 1.
However, councilman Steve Hart requested that the $1 million difference be addressed Tuesday evening before the council proceeded with the budget review, while Councilman Charles Collinsworth said he would prefer to hear City Manager Troy Royer's explanation of the entire budget, of which the council made it roughly halfway through in their previous meeting, before making suggestions.
"I have a goal of seeing this go back to non-deficit spending this year, which means there will be some tough decisions made, but I can't know what I'm going to cut until I hear it presented," Collinsworth said.
"I can't see us going down this road of spending $1 million more than we bring in so I think that's something we need to answer now," Hart said. "Not only for next year but for years following."
Davidson said the city has accumulated about 120 days worth of reserves, up from zero a few years ago when the city endured a financial crisis, which resulted in staffing cuts, including significant cuts to the Neosho Police and Fire Departments.
Page 2 of 3 - Davidson said with the reserve spending proposed in the coming year, the city would still operate with 90 days worth of reserve spending in the bank, which he said had been the goal amount for the past five years.
Councilman David Ruth agreed with Hart, that the difference between the expenditures and revenues for the coming year should be immediately addressed.
"I'm like Councilman Hart, I really hate dipping $1 million dollars into reserves unless we really have something to show for it," Ruth said. "We're going to pay off some debt? OK."
Ruth noted that while he would be comfortable with using the reserves to pay off debt, he would also be supportive of a substantial streets project, cutting down on potholes on city streets, though he is not supportive of using those funds for the purchase of new vehicles or the addition of new personnel that he believes the city cannot sustain.
Currently, the proposed budget draft includes the addition of two new positions, both in the Neosho Police Department. However, one of those positions is dependent on if the city is selected for a federal grant that would fund the position for three years.
The police department, which Police Chief Dave McCracken said was once considered fully staffed at 26 officers, was cut down to 11 in 2010, and has built back up, with a total of 20 presently, including the chief.
Davidson said to address the city's future general revenue problem, the city would at some point need to address the public about their options going forward, and said he was not comfortable making those decisions without public input.
"This is about the long-term future of Neosho and I'm not going to feel right sitting here when I've got $2 million extra sitting in the bank for general fund and I'm going to tap into $500,000 of that and tell the people of Neosho 'I'd rather cut your safety,'" Davidson said.
Both Ruth and Hart said cutting public safety was not mentioned, and is not the intentions of the council, while Davidson responded that it would be impossible to cut $500,000 from the general fund without cutting staffing for police and fire.
"But does that necessarily mean we're going to put citizens at risk if we cut a little bit here and a little bit there?," Ruth said. "Does that mean we're going to jeopardize safety of the citizens? No one's ever said, that I've heard, 'let's jeopardize the safety of the citizens for the next two or three years, then we can really build up reserves.'"
"Then I guess the question is going to be, do we know more about how many cops we need, or does Chief, and do we know more about how many firemen we need or does Chief?" Davidson said.
Page 3 of 3 - "You know what though, those are our decisions," Hart said.
"And there is a difference between how many we need and how many we can afford," Ruth added. "Right now payroll in those two departments takes up that 1 percent sales tax."
The council will resume budget talks on Tuesday, Aug. 13.
Following the budget work session, the council met for their regularly scheduled council meeting. See Thursday's Neosho Daily News for more on Tuesday's council meeting.