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2013 Clarksville City Budget Update

Clarksville City Council - Ward 10Clarksville, TN – Over the next couple of days I will write about the proposed 2013 Clarksville City budget.

After several months of work the mayor got the final budget pieces (and most important – predicted revenue and predicted spending totals) to council members Friday night (June 1st, 2012) and wants the council to conduct its first vote this Thursday (June 7th).

I’ll write shorter versus a couple of long ones to help in the understanding of what appears to be going on. I am not sure what happened on this year’s budget process, but it seemed to be the most disjointed process I have witnessed while on the council.

Instead of the mayor providing council members one complete package with all the data, she broke it out over several of the “budget workshop” presentations she had set up. The problem was many on the council (including me) did not know these presentations were the mayor’s “final” version of her budget. However, even when that was cleared up, the final department presentations given last Thursday did not contain the numbers the mayor said she wanted. So even the staff and departments trying to present what the mayor wanted couldn’t keep it straight.

The mayor’s budget is likely the most important document that office will produce each year.  Since the mayor must have council approval, it would seem natural to ensure that all council members understood how this process was to be set up, but that information was not communicated well to the council.  Also a document of such importance should have warranted a couple of “special sessions” so the mayor could “officially” present her budget.

This was not done and the “mayor” presentations were treated no different than the department presentations (attendance optional).  With many on the council having kids/family in graduations, vacations scheduled and other end of school events going on, the period of mid-May was a poor time to try and do anything that had multiple segments.  The mayor’s office kept changing schedules because so many would be gone and that added to the confusion.

Budget History – 2012

If readers will recall, last year’s budget (the one that will conclude at the end of this month) did not set well with half the council. Both votes by the council were ties and the mayor had to vote both times to get her budget passed.  I and other council members believed we needed to cut a couple of million dollars off the projected budget due to uncertainty of the economy and having just committed to a $3.9 million raise for employees.

While the new census was to direct more state funding to Clarksville to cover most of the new raises, we did not know the exact amount. Many believed we needed to see the full impact of that raise, receive any new state funding that was coming our way, and see how the economic recovery went before proceeding with too many other ventures and spending.

As you will remember, the mayor touted that it was a balanced budget even with a substantial spending increase (around $5 million). Of course, it was balanced by having to borrow $2.7 million (later upped to $3 million) just to operate the city. In addition, the mayor also had to siphon $1.5 million out of the Capital Projects Revenue District, which was the city “piggy bank” for major capital project payments and investments to balance her 2012 budget.

We had to stop the mayor twice from spending the money set aside to pay for the new Airport Terminal, when she want wanted to borrow money for it instead. Plus, we were hoping that $3 million was still coming from the state on census money.  Despite showing all these financial concerns, we continued to hear from the mayor and some council members that her budget is balanced, so what was our problem.

It was not even 90 days after budget implementation of the mayor’s “balanced” budget that Clarksville Mayor Kim McMillan had to make public (News Release dated Sept 21, 2011, subj: Mayor Makes Early Budget Moves) that she needed to have departments looking at budget reductions of 5% or almost $3.4 million dollars.  The mayor deflected blame onto delays in economic recovery, possible cuts in state and federal aid, and indebtedness of previous budgets.

The mayor stated the potential cuts were not related to the current budget (yes, they really were and we tried to point that out during the budget process), the possible cuts were not action that required city council action (yes they did and she had to come to us in April to cut the budget and you can reference my City Council Regular Session Recap Report – Apr 5, 2012 on that action) and that this reduction action was to make sure all city departments were operating as lean as possible (that should have been a “given” at the start of the budget process).

Actions During The Budget Year

The 2012 Budget Cut

The ”threat” of budget cuts seemed to disappear for a couple of months after September’s announcement.  I raised the question at the Public Safety Committee in December 2011 as to what those departments were looking to cut.  It appeared the police department was going to offer some cuts, but most other departments said they had not asked for more than needed during the budget or saved some money on cheaper equipment purchases or slowed hiring actions, but otherwise had nothing that they could voluntarily give up without effects on services.  In the end, instead of every department taking a 5% cut the mayor allowed the police to take the brunt of it with a $1.6 million cut out of a total $2.3 million city wide cut.

The mayor’s rather quick turnabout on needing a budget cut did validate that some of us on the council saw problems with that proposed budget and tried to take the proper leadership role at the beginning of the process based on the data available in May and June of 2011.  It was interesting to note that when we were proposing those cuts, there were those on the council that said such actions could lead to service reductions, workers losing their jobs or the loss of new jobs.  Some of those actions were a possibility with the cuts proposed to the council by some of us.  Those against such reductions stated we should leave the mayor’s balanced budget alone. When the mayor did cut a couple of million, those same council members were nowhere to be heard about loss of service or jobs. Instead they praised the Mayor for taking decisive action on the budget.  Political pandering is a poor substitute for leadership.

Money Borrowed to Balance the 2012 Budget

As I mentioned, the mayor had to go out and borrow $3 million to balance her 2012 budget.  A large portion of that money was borrowed to pay for police equipment.  With the police taking budget cuts, much of that money was no longer needed.  As of April 2012, the Director of Finance stated that close to $2 million of that borrowed money had not been spent.  So were we going to give it back and repay the debt…..the answer was no.  Were we saving it for some unknown project or need….the answer was no.  I’m not sure we got the whole story, as it appears the mayor was “sandbagging” the money at this late date in the 2012 budget year to salvage her up-coming 2013 budget.

Sales Taxes

During the late part of 2011 and early months of 2012, the sales taxes generated in the State of Tennessee and Clarksville were considerably higher than expected.  In April, the Director of Finance told the council the city had about $2 million in unobligated funding due to higher than expected tax receipts.  Those tax amounts were likely through February 2012 for the budget year.  According to latest figures/projections provided by the Finance Department, we should get about $3.75 million more in taxes than projected at the initial planning of the 2012 budget.

I am very pleased that tax receipts came in much higher than any projection.  Every city hopes for such results.  However, these actions and results formed more disconnects on how we seemed to be managing our money.   We knew we had $2 million in additional tax funding in April with more increases to come.  We knew what the state was going to do as they finished developing much of their budget in April for an early May closure.  We knew the police were going to turn right back around in the 2013 budget and ask for the same money to buy people and equipment they were going to give up in the 2012 budget cut (which they have).  So, why stall the budget reductions for months, then take a cut in April and turn around and basically restore funding in July?

The Budget Stage Is Set For 2013

In my next report, I’ll send you the overall numbers that Mayor McMillan has submitted to us.  As a preview, I will say that the 2012 city budget is supposed to finish at an expense amount $75,233,462 (last June it was to be $77,547,079 before the cut).  The proposed 2013 budget is $81,045,568.  The 2011 budget ended with costs of $72.3 million and in two budget cycles under Mayor McMillan the city budget spending is looking to increase 12% by 2013.

The large upward bump in tax collections is not projected to last into 2013 with reductions of about $2.5 million to occur from 2012 collections.

Editor’s Note: This article contains the view points of Councilman Bill Summers and may not represent the views of the rest of the City Council, the City of Clarksville or ClarksvilleOnline.

Bill Summers
Bill Summershttp://www.cityofclarksville.com/
Bill Summers is the City Councilman for Ward 10 in Clarksville, TN. Disclaimer: The views and opinions expressed by the author are not necessarily those of the City of Clarksville or Clarksville Online.

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