The Lewisburg City Council held a work session and a specially called meeting on Tuesday, Oct. 22, in their continuing effort to repair the city’s financial condition.

Councilmen voted to authorize the issuance of up to an additional $500,000 in tax anticipation notes for the current fiscal year.

In December of last year, the city’s fund balance was exhausted, forcing the city to issue notes in order to continue operations.

Municipalities, which receive the bulk of their tax collections toward the end of the fiscal year, maintain a fund balance in order to fund operations during the first half of the year when collections are low.

Prior to the start of the current financial year on July 1, the council authorized $1 million in tax anticipation notes for this year.

Compounding the cash flow issue for this month was the later delivery of property tax bills due to a printing error, delaying the start of collections, said City Treasurer Donna Park.

Notices started arriving this week for city residents, compared to late September last year.

Park noted that by this time last year, the city had already received $320,000 in property taxes.

By the city’s own guidelines, it should maintain a 30% fund balance, or roughly $3 million depending on the size of the budget.

The Tennessee Office of the Comptroller recommends as a minimum one month of spending in reserve, or in Lewisburg’s case approximately $1 million.

Due to the shortfall last year, the city began the year with less than $300,000.

The city will have to submit a cash management policy and a corrective action plan to the comptroller’s office for approval next month.

For this year, the council mandated substantial budget reductions and a hiring freeze for the city, which has seen some employees leave especially from the police department, in order to rebuild the city’s fund balance.

Park said that initially the city’s budget for the year predicted a $400,000 surplus next June, but that so far actual costs were pointing toward a surplus closer to $1 million.

The work session prior to the vote focussed on one of the other ways that the city is trying to reduce overhead.

Months ago, the city began examining options to reduce health care costs and the council heard a recommendation from an insurance broker retained by the city.

He suggested switching the city’s insurance plan from the current arrangement with Blue Cross Blue Shield to a similar package from Aetna.

The Aetna plan will match the city’s current insurance coverage in offerings, but at a savings to the city of an estimated $180,000 over the first six months of the policy.

Health insurance plans are renewed on Jan. 1, meaning six months of the savings will impact the current budget and the other half of the year will apply to the next budget year.

Park said that she had budgeted health care costs for the city to increase by 10% this year but, earlier this month, Blue Cross Blue Shield gave notice of a 21% increase in premiums.