With the hiring of City Manager Leroy Alsup in early February, the Guthrie city council knew they would be inheriting a manager with an extensive background in finance and development. On Tuesday, Alsup delivered a message that the City is projected to out spend their revenue if they keep the same pace for the final six months of the fiscal year, according to the preliminary numbers.
During his city manager’s report, Alsup said he will be meeting with City staff this week to discuss a cost savings plan. Afterwards, he plans to meet with the council in two weeks to discuss a mid-year budget review.
City staff took the revenue received so far this fiscal year, expend it for the first six months and attempted to do a realistic forecast of expenditures and revenue for the final six months.
The City’s general fund started with $380,000 to begin the year. It is anticipated the City will draw $1.1 million in revenue, but will have $1.3 million in expenditures. If the numbers holds true, the City’s general fund would shrink to $184,320. Alsup says the goal should be to have a minimum $500,000 in the general fund.
“If we stay at this pace we are going to spend almost $200,000 more than the revenue than that we bring in. You can’t over spend your revenue very many years or you won’t have any money left,” Alsup said.
The Guthrie Fire Department started the year with $22,000 and has a projected revenue of $2.5 million. Alsup says the expenditures for the department are expected to be $2.7 million for a negative balance of $102,544. If true, to balance the fire fund, the City would need to borrow money from the general fund. In that scenario, the City’s general fund would dwindle down to $80,000.
For the Guthrie Public Works Authority fund, the balance started with $678,000, it’s projected to draw under $8 million in revenue, but $8.2 million in expenditures. If those numbers hold true, the GPWA fund will spend $312,000 more than the projected revenue and leave a fund balance of $365,000. Again, under the $500,000 target goal.
“In all total, in the primary funds, we are projecting that our expenditures will be $633,000 more than our revenue. That’s not a balance budget.” Alsup said looking over his notes.
He continued, “I don’t want to give the impression that the City is broke and alarm anybody because we are from broke, but we do have to balance our budget.”
Alsup noted the Stabilization General Fund stands at $995,000 and the GPWA Stabilization Fund sits at $512,000. The goal for the two savings accounts is to reach a million dollars each.
City Manager points out a loss in deal with Guthrie Public Schools
In July 2016, the Guthrie city council passed an agreement to grant a reduction (at cost) in water and wastewater expenses for Guthrie Public Schools. In addition, the City funded an additional School Resource Officer (SRO) through the Guthrie Police Department. Related article: City council provides “life preserver” for Guthrie Public Schools
Alsup says the utility agreement cost the City $95,000 in revenue.
The additional SRO cost the City $32,000.
Rural Water lawsuit costing city revenue
The recent lawsuit agreement between the City and Rural Water No. 1 is expected to cost the City approximately $150,000 in revenue loss.
In total, 411 water customers were transfer to the Rural Water district.
Related article: City of Guthrie and Rural Water end 11-year lawsuit
City to look at raising revenue measures
Alsup says the City has researched and found that a court cost of a municipal ticket is at a standard rate of $30 compared to the City’s current $21.
If the City were go to the standard rate of $30 it would generate an estimated $22,000 in additional funds.
The city manager added that communities have begun adding a technology fee to municipal tickets to help aid technology for the City.
The price ranges from $15 to $40 throughout the state. Alsup says if the City elected to go with a $25 fee, it could possibly bring in an additional $60,000. The funds would then go to help with the City’s software programs and computer uses.
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