Council won't use reserves to balance city budget

Friday, May 14, 2010

Lewisburg's councilmen oppose using reserve funds to close a $373,000 gap between revenues and operating costs in the city's proposed budget.

As a result, when discussion on next year's city budget was opened on the first of three votes toward adoption, remarks were made indicating that first step might not be taken.

"The more I realize it's the first reading and I can vote on it later..." Councilman Quinn Stewart began after moving for adoption of the budget on a first reading, "I'd prefer not to vote without knowing..."

Ultimately, Stewart voted to formally start deliberations and decision-making toward a spending plan of nearly $8.63 million when revenues are anticipated at just under $8.26 million. Yet, that followed Councilman Ronald McRady's remarks on routine budget changes.

"When I was in state government," said McRady, who served as a deputy commissioner of the Tennessee Department of Corrections, "we'd amend the budget 14 times."

Furthermore, a lack of action could cost the city, he said.

"If we do not do something on this tonight, it will cost the city $600 for a special meeting," McRady said.

The $600 is small compared to the city's current budget of $9.7 million, but locally elected officials frequently examine small figures when working toward adoption of a budget that is to start July 1.

"The county doesn't do it," Councilman Robin Minor said of a long-standing schedule for adoption of the county budget after the fiscal year starts on July 1. It's done with a continuing resolution to freeze spending rates and proceed after the budget is adopted late.

Minor wanted an opinion from City Attorney Bill Haywood on budget deadlines.

"We need to get into compliance," McRady continued, deferring comparisons to the county's budget process.

A unanimous vote emerged from such discussion, largely because it was the first of three required votes to adopt a new budget. McRady emphasized there would be more non-voting workshops on the budget. That would give councilmen opportunities "to get this budget the way we want it," the councilman said.

"We're at 18.2 percent unemployment," McRady said. "Don't be surprised if we don't go to reserves to make this budget work."

By voting on the budget Monday, the Council also verified its intent to keep the city's property tax rate at $1.36 per $100 of assessed value.

"I will not vote to take $373,000 out of reserves" to make revenues match spending, Minor said. "Taking that is not in line. We must do better than that.

"When you're taking money out of reserves, that's deficit spending," he said.

Minor quickly agreed with McRady's next point.

"Next year may be harder than this," McRady said. "The council's involvement is good."

Still, there are difficult decisions to be made, they agreed.

"There are some programs you just can't cut," McRady said.

Stewart said, "I don't think we have to cut all the same, but they can cut something."

Non-voting workshops have been held on city budgets, but few seem to have the problems facing Lewisburg this year and Stewart noted there had been some consensus on some budget issues when the document was reviewed before Tuesday night.

McRady said, "We should se what adjustments we can make."

Stewart concluded she could vote to start the budget ordinance, but she wanted it changed before adoption.

Minor said he would not vote for the budget on second or third readings if there were no changes.

May 27 at 4:30 p.m. in City Hall is when and where the budget will be the subject of more deliberations. A workshop will precede a special meeting called for another vote on the ordinance.