In a budget work session held Tuesday evening, the Neosho City Council agreed to move forward on a budget draft presented to them by city manager Troy Royer.
The draft reviewed on Tuesday evening, the third version since the council’s weekly budget work sessions began July 29, shows $16.3 million in expenditures and $15.3 million in expected revenues.
Though, Neosho Mayor Richard Davidson said if sales tax revenues stay on track, the city expects that budget shortfall to shrink, particularly for the general fund.
“If you dig deeper into the numbers you’re going to see that if our revenues remain flat for September, our general revenue total is going to go up $71,000,” Davidson said. “That $91,000 reserve deficit goes to $21,000, just by nothing happening other than flat revenue. I except it’s going to be up, I expect we’ll see a little increase, but we’re projecting it to be flat to be on the cautious side.”
Council members had reviewed budget proposals in three separate work sessions, before completing their initial reading of the budget draft last week.
Once finished with their initial review, council members asked Royer and the city’s department directors to go back and find more areas they could cut, to help reduce the city’s reserve spending.
While approximately $440,000 of the reserve spending was for the general fund, Royer found $417,736 in cuts for that fund.
The proposed cuts from the general fund included lessening the city’s repayment of borrowings – to replenish funds taken from other city accounts under a former administration – though council agreed Tuesday evening to go ahead with the full $272,771 payment, instead of paying only half.
Those funds will come out of the city’s general fund to repay the senior center sales tax, hotel/motel tax, water/wastewater, economic development sales tax, TIF, and street sales tax funds.
“To get that over with and behind us, because we do have the excess funds available, that’s one I don’t have a problem with,” said Councilman David Ruth.
Davidson said with the full payment this year, the city will have only one annual payment left to finish repaying those funds.
Council’s decision to make the full payment for the coming fiscal year takes an additional $136,386 from the general fund.
Davidson noted that the city currently has 141 days of reserves in the bank, while the city’s goal was to build up 90 days of reserves.
Councilman Charles Collinsworth said he was pleased with the budget council ended up with.
“I think we’re going to be on really, really solid ground in four or five years but in the meantime, we are getting closer to filling in that hole,” Collinsworth said.
Page 2 of 3 - He continued by thanking Royer and the city’s department directors for their work on the budget.
“I challenged you guys last week to make precise, smart cuts and I think you guys have done that,” Collinsworth said. “I know the cuts hurt, but you guys are doing a great job for our city. I’m tickled to death that in reality this is going to be an almost even budget, I can live with that. I feel like it might be ridiculous to try to cut even more.”
Council agreed to move forward with the budget, asking Royer to finalize the draft and present it to council in ordinance form in their Sept. 3 council meeting.
The city council will then vote on the budget proposal on first reading Sept. 3 and on final reading Sept. 17, allowing the budget to be in place by the start of the city’s new fiscal year, beginning Oct. 1.
The cuts from the general fund were made up of cuts to professional services, office expenses, equipment maintenance, and the Neosho Police Department.
Budget cuts also included about $293,000 from the golf course, the Neosho Fire Department’s Fire Sales Tax, the Parks Sales Tax and the Parks and Recreation funds.
For the Neosho Police Department, the cuts mean the elimination of a proposed new police officer position, as well as two new police vehicles. Meanwhile, among the fire department’s cuts was $80,000 from the capital items fund, which had been budgeted to pay for a new roof, boots, doors and a copier.
Davidson said it is important to remember that the budget is dynamic, and the draft before council Tuesday evening was only an estimate.
“It’s not going to be accurate to the penny or to the nearest 10,000,” Davidson said. “It may be $50,000 or $100,000 off, but this is a guesstimate and this administration has proven that they watch the budget like a hawk. If they need to come back a month from now and change things, I am confident that they will. But, today is just the start of a general guidance for the budget of 2014 and we’re predicting the next 12 months tonight.”
Following their budget work session, council convened for their regularly scheduled city council meeting, at which time council members:
• Voted to accept two bids for plumbing services for city-owned facilities, as well as one for asphalt overlay for several city streets.
Council approved G3 Plumbing, of Neosho, as the city’s primary plumbing service and Burkhart Plumbing, also of Neosho, as the alternate contractor.
Council also approved a $140,064.40 bid from APAC to provide asphalt overlay for the street repair projects scheduled for this year.
Page 3 of 3 - • Voted to authorize the mayor to sign off on a $9,740 reimbursement from the Missouri Development Finance Board for the city’s completed demolition project of the First Baptist Church, formerly located next to the Neosho Civic Center. MDFB has already provided $64,710 for that project.
• Met in closed session to discuss real estate and personnel issues.
• • •
Council is set to meet in special session at 6 p.m. Tuesday, Aug. 27 in city hall council chambers, 203 E. Main Street. The meeting will begin with a public hearing for the city’s property tax rate, which is proposed to remain the same at .4256 per $100 assessed valuation.
The council held their first tax rate hearing on Aug. 13, at which time no one from the public attended to speak regarding the rate. However, due to an error in the posting of that hearing, council will hold a second hearing next week.
Following the tax rate hearing, council is then scheduled to vote both on first reading, and final reading, to set the property tax rate.