I would like to respond to Josh Bill's recent letter.
First, Josh Bill appears to have developed his own interpretative language regarding the details of the City's budget. The City's budget is made up of restrictive funds (transportation sales tax) and unrestrictive funds (general sales tax, property tax). For purposes of explanation, one has to understand this principle. You cannot group the funds together and create fund balances that do not exist.
We prepare the city's budget based upon real numbers. We do not (as Josh Bill has suggested to us) try to forecast or speculate with a formula on economic conditions to project revenues that may not materialize. Our system is simple. Generally, we take the previous five years' actual revenue and analyze each line item, use an average based upon the audit history and that number becomes our anticipated revenue for the next budget year. We have a conservative philosophy when we develop our budget, believing it is better to take in a little more than you estimated, than to fall short.
City staff met with Josh Bill a few months ago, when he came by the office to present his findings regarding the city's budget history. I thanked Josh Bill for all of the research he was able to conduct in his spare time. At the time we met, city staff agreed with some of the numbers Josh Bill came up with, however, he was told that we were not in agreement on the amount of reserves he believed were available to be transferred to the General Fund of the City. Josh Bill uses a number of 6.28 million dollars as being available for transfer. Once again, Josh Bill does not understand the concept of fund accounting. During budget prep this year, city staff and the council investigated ways for the general fund to be repaid from previous expenditures transferred to capital improvement and street programs. In the end, we were able to work with the auditors to make a one-time transfer of $ 2.1 million to the general fund, not the 6 million dollars Josh Bill believed was available.
On at least a dozen occasions this year, I have presented evidence in public meetings that the city's general fund was suffering a deficit because the general fund was unable to replenish revenues at a pace to keep up with expenditures. This manifested itself during Josh Bill's one term as Mayor. It was at this time he coined the phrase " City in Crisis" and went about a series of public appearances, in which, he endorsed a platform to increase salaries, benefits, manpower, and implementation of a community cleanup campaign. The problem with this, as pointed out at the time, was the fact that we were spending reserves, and the day would come when we would need to have a source of revenue available to maintain our levels of service.
The City's budget ordinance is not line item specific. That is, there is flexibility for the Council, Manager and Department Heads to direct expenditures to areas where they are needed the most, as long as it does not exceed budget authorization. Therefore, no ordinances were violated in the administration of the budget.
Josh Bill also commented on SAHEC. He spends a number of paragraphs explaining his interpretation of the numbers. I will respond in a more concise manner. He is wrong. He forgot to mention that we have promissory note payments in excess of $600,000 this year, and SEMO still has $200,000 in bills that can be submitted. When all is said and done, there may be $300,000 left in the SAHEC fund, but as per agreement that was ratified by the Council when Josh Bill served, the money belongs to SEMO. Dr. Robert Buchanan has assured the Council that SEMO has a long-term commitment to provide the operational costs of SAHEC and we are confident that a new agreement can be structured.
The plan that is submitted regarding LCRA calls for a $ 500,000 funding level for the first three years. This totals $ 1.5 million. Josh states that only $ 830,000 will be needed. Josh Bill forgets to include legal fees that are associated with gaining clear title to the properties, the removal of commercial structures that will carry a much higher removal cost, asbestos abatement costs, ongoing maintenance requirements on the property, and engineering fees that may be needed to assist in the redevelopment of the properties. Josh Bill's analysis is off mark, and unsupported by the facts.
The City Council has put a measure on the February 3rd ballot that, if approved, will increase the general fund sales tax. In addition, the City Council will allow the 1/4-cent SAHEC tax and 1/4-cent Capital Improvement tax to expire. The Council has also committed to reducing real estate and personal property taxes by 21 percent. The City Council has adopted a realistic plan that will utilize the new revenue to maintain and improve Public Safety, fund LCRA and community redevelopment, and improve local educational opportunities by a SAHEC expansion. Approval of the proposal to Secure Sikeston's Future , will only increase the local sales tax rate by 1/2-cent, not the one cent Josh Bill claims.
Finally, the merit pay plan and restructuring of salaries to remain competitive has been in place for years. And yes, one-time adjustments have been made in a number of employee classifications, these range from the PSO's to secretaries to the City Manager's salary. I can defend each increase. I will also point out that there has been a reduction in pay in a salaried management position. What we have not been able to provide to our employees is a plan for cost of living adjustments on an annual basis. The retirement expenditures cited by Josh Bill are strictly driven by payroll. When the City council authorized the upgrade in the LAGERS retirement plan for city employees to be the same as the BMU, it did result in an increase to the budget. However, the fact that we have been able to hire additional public safety officers (and most importantly, keep them) is the biggest reason for the increase.
For the record, I make $89,900 a year. Tomorrow marks my 18th year of service to the City of Sikeston. I feel privileged to join a group of individuals who have served this city well. I know there will be more attacks, and I know Josh Bill will try to spin the truth to meet his own agenda.
Doug Friend City Manager