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Clarksville City Council Fiscal Year 2014 Budget Wrap Up, July 17th 2013

 

Clarksville City Council - Ward 10Clarksville, TN – Clarksville Police – In my June 9th report I mentioned that I tried to add 8 police officer positions for 2014 (4 in the 3rd qtr./4 in the 4th qtr.). That effort failed in a 6-6 tie vote in which Mayor McMillan voted “no” to kill the amendment.

It initially appeared the cost might have made a possible vote difference at almost $228,000 to add these officers. I made another effort to add officers by requesting five (5) positions in the 4th qtr. of the 2014 budget. The cost was reduced by almost half to $115,070 and I hoped that might sway a vote for support.

A similar discussion (from the first debate) ensued that the police department did not ask for officers this year, but would be asking for them in the future. A council member asked the police chief if he had a plan. The answer was yes, but no details were provided nor were any questions asked.

I asked the chief if the ratio he had set as a minimum for officers per population (2 per 1000) was still a viable planning number and required to meet the law enforcement needs of Clarksville. The answer was yes. That goal was attained in 2008 and maintained through 2010.

However, Clarksville has grown faster than predicted and there has been basically no effort to increase officer strength to match population growth for the past three budgets. Then we have the contradiction in budget and force management that no additional officers are asked for, yet we require 2 per 1000 to address Clarksville’s needs. No one in the administration seemed willing to stand up and explain that dichotomy.

If the population continues growing in 2013 and 2014, as has been documented in 2011 and 2012, the police force will be short around 36 officers by this time next year. The city council has supported the police in the past to try to reach the 2 officers per 1000 population.

In 2010, the council included an additional three officers over and above the request by the police department to ensure the 2 per 1000 ratio was maintained. I am the one that made that additional allocation amendment and the council approved it. Some of those council members that voted yes back then were Burkhart, Grubbs, Harris and Lewis.

Now, Clarksville is almost two dozens officers below that ratio as of July 2013.  Those same council members listed above that were supportive of ensuring the 2 per 1000 ratio now cite excuses not to support this need by saying the chief didn’t ask for them, or they would not feel right or not in the position of telling a department what they needed to run their department.

That last excuse is particularly intriguing since every budget has items that departments wanted, yet the council denies some of those requested needs in the budgets it approves. So, whether council members realized it or not, the city council tells the departments what they can do each year through their budget vote.

In the end, it came down to the expected 6-6 tie and as usual, the mayor voted no.

Fire Department

I tried to add back in three firefighters that were originally requested in the budget but were “zeroed” out. With money being borrowed to build a new fire station in 2014, it would only make sense (in my mind) to plan for additional fire fighters to staff it when it opens.

On average, it takes around 15 firefighters to staff a station. The excuses that were used to not support the increase for police were not viable in the firefighter case. The request did make an initial budget review.

However, the voting results mirrored the police amendment. Now, if the station opens next year, other stations will have to give up staffing to operate the new facility. This too runs counter from 2007, when the city took a grant to add around 15-17 firefighters so that the heavy equipment would have four firefighters each to meet national recommendations.

What is particularly frustrating are citizens continually wanting their government to be proactive and not reactive. Reactive government always is trying to catch up because it did not plan or anticipate a need.

With both the firefighter and police requirements, the city could be very proactive with staffing and equipping of both departments.  Each is based on staffing ratios of personnel and equipment for services provided and populations served. It does not get much easier to plan and budget for than these types of functions, if we would actually do it.

Parking Authority

The Parking Authority (PA) planned to transfer $20,000 out of its account and give this donation to the Two Rivers Company (TRC) to help with expenses.

This was before my proposal was approved to provide funding for TRC. Having studied the Parking Authority operational guidelines and procedures, I did not believe the PA had the authority to give away its own money to a non-profit organization and stated so at the initial budget vote. I asked the city attorney for a review and opinion of my finding.

After reviewing the city charter/code, the city attorney concurred with my finding and the donation was withdrawn.

Excursion Boat Project

The city will borrow $325,000 for the possibility that we may move the Cumberland River boat dock from its current location by Riverside Drive to an area behind where O’Charley’s is located on Riverside Drive.

It was clear to half the council that the mayor did not have any details to explain what this project entails as far as what the boat operator will provide, will the city have to give up something additional besides the current boat dock location, will this business pay the city back, will the McGregor Boat ramp close, will the boat operator get the parking lot where the boat ramp is, etc, etc, etc.

Supposedly, you might be able to ride the boat to see the river and there may be dinner or events you can attend on it. It would be operated by the same people who ran the little riverboat at the park six or seven years ago. That is about as much as we know about it.

After the manipulation of the council and the contract/funding sources of the city employee health clinic, some council members wanted to see this contract before anything was signed. There is no requirement for us to see the agreement if we approve the funding in the budget.

Of course we did not approve any funding for the new clinic, but that did not stop Mayor McMillan from signing contracts she had no funding for at the time. I asked the city attorney if we needed to add language to the project to ensure we see it first and he said we could.

I then offered that if Mayor McMillan was willing to go on record that we would see it first, that would satisfy me. I had to review the tape of the council meeting to verify it, but it appears the mayor said “okay”.

However, some of us could not see borrowing this money and paying interest if we did not have any concrete information in place or that there was nothing to suggest that an agreement would be reached. A vote to remove the funding until such time we knew what we were buying into failed in a…..you guessed it. a 6-6 tie vote with the mayor voting no.

Some mentioned that we spent $35 million on the park and marina so why the fuss over this? The differences seemed obvious.  We owned and used the park and marina basin before and after the project, we had a detailed plan of what was going to happen, we knew the costs and the council approved the project before the money was borrowed. We have none of that with this project.

Final Budget Review

These numbers are rounded and may have been slightly changed once all of the minor budget tweaks are installed. However, it will give you a good idea how the budget landed.

2014 Predicted Revenue:  $78.4 million
2014 Predicted Spending: $81.7 million
2014 Predicted Deficit: $3.3 million
2014 Debt Service Payout: $10.1 million ($2.9 million increase since 2012)
2014 City Fund Balance:  $18.2 million ($16.3 million required by city code as minimum emergency funding)
2014 Unobligated Fund Balance
Amount after covering 2014 deficit:
$1.9 million
2014 Money borrowed: $7.95 million ($12.2 million borrowed in 2013)

 

As readers may recall, I had grave concerns with where the 2014 budget would go based on the proposed spending (this time last year) in the 2013 budget. So how did things shake out with my concerns? I predicted a $2.3 million shortfall in 2014 budget if factored 2013 predictions and past data became reality. If you happened to keep it, the email that I made this concern in was dated June 22nd, 2012 (Council Budget Recap Part II)

My estimate in June 2012 for the FY2014 budget spending:  $82.6 million
2014 Predicted Budget Spending as actually presented:  $81.7 million
Difference: -$ 0.9 million

 

The 0.9 million difference primarily appears to be 0.16 million in new firefighters positions not budgeted as expected in 2014 and reductions in capital outlays for new equipment (which may have to be made up for in 2015) which I straight-lined into 2014.

My estimate in June 2012 for the FY2014 budget revenue: $76.6 million
2014 Predicted Budget Revenue prediction as presented:  $78.4 million
Difference: +$1.8 million

 

Two primary variables affected my prediction versus the budget. First, the city made $1.1 million more than projected/expected in 2013 in taxes/revenue (this may be due to the increased spending/tax growth from the higher than expected population growth). Which also means that $1.1 million less had to be taken out of the fund balance to make up for the $5.9 million spending deficit that was expected in 2013.

Second, since the city is now starting from that higher than expected 2013 revenue level the city predicts an additional increase of $2.2 million in 2014 revenue above that. I used a more historical average of $1.5 million increase in my 2012 prediction. Of concern here is $.8 million of that $2.2 mil revenue increase is projected to come from CDE in the form of a “in lieu of taxes” payment. For the record CDE was short .3 million in 2013, .2 million in 2012 and $.7 million in 2011 in making payment predictions to the city.

So, with my 2014 prediction of $-2.3 mil budget shortfall, add back .9 mil in less 2014 spending than I predicted, add in $1.1 mil in unexpected 2013 budget revenue and add in $1.8 in additional predicted 2014 revenues and you would wind up with a $1.5 million unobligated fund balance in 2014. The actual 2014 predict amount for 2014 is $1.9 million.

Given the revenue projections for the 2013 budget and using some historical budget averages, my desktop budget forecast was not far off target and a valid concern. The $1.1 mil in unexpected money made a big difference to the city bottom line in 2013. The rosy 2014 $2.2 mil revenue increase will be interesting since the Clarksville Department of Electricity (CDE) is furnishing $.8 mil of that amount and they have not met previous forecasts.

If revenue forecasts fail to meet expectations, the city can do another mid-year budget cut. If you will recall, I and other council members urged the mayor to cut about $2 million in her 2012 budget, but we did not get enough support from the full council, plus the mayor kept saying it was a balanced budget. Seventy-five days after that budget was approved, the mayor notified departments that a reduction would now be required. By spring she took about $2.3 million from that initial budget. In her first budget she had to borrow almost $3 million just to balance the budget versus taking needed cuts.

2015 will not be any easier as we “should” be budgeting for more police officers and another 15 firefighters. Our parks maintenance budgets are underfunded and there will be pay and equipment issues to cover. It will be another interesting year to observe.

That’s a budget wrap for this year.


About Bill Summers

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