By Lisa Essig

click here to see the official document

What is a city to do that has so many needs and so little money when it receives a windfall in the form of a class action lawsuit settlement? Anyone who drives the streets of Liberty knows we have needs. More than we can attend to, an understandable quandary for city council for sure.
 
With dwindling cash reserves and a forecast that the city will be unable to meet bond obligations without either cutting promised projects or raising taxes would it be more prudent to save the telecom settlement money? That is the question one councilman (Nick King) continues to ask.

The funds in question are $1.385 million, most of which was not accounted for in the 2008 budget.

Early in the year Councilman Jenness proposed that we spend 100% of those funds on our ailing roads. A prudent use of the funds at the time of the proposal. It is true we can probably not spend enough on roads right now.

Some on the council feel it would be most prudent that we save the entire settlement to shore up the "financial management challenge" using the words of city staff who in a June 6th study session prefers not to use the word "crisis". Both councilman King and Brenton referred to the city's situation as a potential financial crisis. Equally as many members are ready to spend it all now.

Others on the council wonder why it has to be an all or nothing proposition? A compromise settlement seems to make sense, save back enough to raise our cash position while meeting the most immediate needs with some spending. We will refer to the plan as "Pave and Save".

City staff has a spending proposal currently in front of the council that would  spread the money out over a variety of projects. The outline is as follows:

$200,000-Improve the projected 2007 ending fund balance to 12.1%

What should be gleaned from this? It has been customary to maintain a cash position of 15% of the general fund budget, and this figure has been dwindling since 2005. We can only assume without adding cash from this settlement we are at or below 10%. This only brings our cash position to 12.1% as of 12/31/07 and does not guarantee we will remain there throughout 2008. 

$86,000-Secure replacement of IT equipment

$200,000-Implement Sewer / Water Main backup storm water mitigation program

$150,000-Traffic Calming and crosswalk repairs Kansas St. / downtown

$150,000-Storm and sanitary sewer repairs Kansas St. / Franklin St.

$426,000-Additional Street Overlay Funding

$25,000-Street Condition Update

After being directed by council in a study session to consider a scenario that would set aside more of the settlement they brought back a proposal that took all of the proposed spending cut from road overlay. (Scenario #2)
 

Liberty Forward's Plan: SCENARIO #3 as follows:

1. Add $426,000 to Street Overlay budget as proposed.
 
2. Prioritize the remaining items in the 2009 budget. And consider them within their own budgets on a case by case basis. If other budgeted 2008 spending falls short or comes in lower, use those savings to purchase these new items.

3. Save the balance $811,000 through the discussion of the 2010 tax extension discussion and the 2009 budget discussions. Remember in 2009 and for years to come we cannot meet bond obligations without raising taxes or cutting other projects. As part of their tax extension plan staff is proposing we cut or delay capital projects that have been in the works for many years. Discussions regarding prioritizing those cuts should include these new projects being recommended as new expenditures for the telecom settlement money.  

We would consider the roads an emergency need. Consider only other proposed items also classified as emergency needs. Unless we have missed something we have not heard that any of these items proposed would be classified in such a fashion.  Remember none of these items made the cut in the 2008 budget. 

It seems as though we need to take care of our streets and at the same time start shoring up the holes in the boat where we are leaking so that we can have the much needed discussions about the city's financial management challenge we so desperately need to have.

This plan significantly adds to the street overlay, holds back money that helps protect our city's dwindling cash position, and it provides incentive to look for ways to save money in the existing 2008 budget in a way that we can bring in some of these additional very worthy projects.

Let us know what you think, as the forecast for revenues continues to be flat, managing spending priorities will be more critical. Let us know where you think the city over spends, under spends, and spends just right!

thanks to liberty forward for continuing to challenge city staff and council. I fear without you, even more of our tax dollars would be foolishly spent. Fountain Bluff - need I say more.