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Minutes for the Finance Committee meeting on November 30, 2006.
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Finance & Administration Committee Minutes
Thursday, November 30, 2006
2:00 p.m.
Members Present were: Darrel Dover, Judy Furr, Jim Hargis, John Street and Ann Williams. Councilman Perrin was unable to attend. Also in attendance were Councilman Farmer, as well as Mayor Formon and Mr. Tony Thomas from the Mayor’s Office.
ELECTION OF A CHAIRMAN
Councilman Farmer stated since he is no longer serving on the committee a new chairman would need to be elected. Councilman Street motioned, seconded by Councilwoman Furr, to elect Councilman Dover to be chairman for the remainder of the year. All voted aye.
2007 BUDGET
Finance Director Don Ray discussed concerns with the proposed 2007 budget that had been brought up by Councilman Farmer. He stated the budget was calculated to show a 6% increase in sales tax revenues for 2007, but the projected amount to be collected was overstated by $1 million. Mr. David Eagle noted that after looking at the sales tax increase over the past few years they are now expecting a 9% increase sales tax revenue over 2006. Mr. Ray explained the 2007 budget did not include a Fixed Asset Fund. He further explained after consulting with several people he knew from Legislative Audit he determined the Fixed Asset Fund was not needed. Mr. Ray also stated the 2007 budget did not include the lease payment for the police cars and fire trucks because he was not aware of the payments. He added they are included in the revised 2007 budget. He noted $400,000 in interest revenue was also not included in the budget. Mr. Ray also stated they made the corrections in terms of the $405,000 in Industrial Development. He explained the changes helped them because they were able to transfer $210,000 to Capital Improvements. Mr. Ray provided the committee with a budget summary for operations and maintenance. He explained because of the number of corrections that would need to be made and the problems with the format of the budget he wanted to take the budgets back and present the Council with revised budgets.
Councilwoman Williams questioned where the JETS funds are located in the budget. Mr. Ray explained they are under Federal Grants. Councilwoman Williams questioned where the contribution from the City is located. Mr. Eagle stated the expense is under Outside Agencies. Councilwoman Williams pointed out the contribution from the City to JETS is not a federal grant and questioned whether it should be placed elsewhere in the budget to be tracked easier. Discussion was held regarding the JETS funds in the budget. Councilman Farmer noted that CDBG has a separate location in the budget and suggested doing the same with JETS so it would be a stand-alone program.
Councilman Farmer questioned why the budget showed only $250,000 in revenue for CDBG in 2007. Mr. Eagle stated that was the number that was given to them by Ms. Gayle Vickers at the time they started preparing the 2007 budget. Mayor Formon stated they are expecting somewhere between $540,000 and $565,000 in revenue for CDBG next year. He added he would feel comfortable replacing the $250,000 with $540,000. Mr. Tony Thomas indicated the City might see an increase in CDBG revenue next year as opposed to a decrease.
Mr. Ray noted the 2007 budget shows a $1.23 million deficit for the City. He added the number for the deficit is up to date. He then questioned whether the changes with the JETS funds in the budget should be done in the revised budget. Councilwoman Williams recommended proceeding with the changes to prevent future budget revisions.
Councilman Farmer discussed the 25% of the ½-cent transfer for Capital Improvements. He noted the 25% in the budget is not completely accurate because the ordinance states the allocation can be up to 25% for things such as rolling stock. He noted it was not supposed to be a flat 25% transfer, but they could go up to 25% if they can justify it.
Mr. Ray noted with all the changes that have been asked for it will be next week before they can get the budgets back to the committee members. Councilman Farmer questioned how much of the $1.23 million deficit can be attributed to fixed assets. Mr. Eagle stated the whole deficit is from fixed assets. He added if the fixed assets are cutback, then the City would have a balanced budget. Chairman Dover noted the City is currently playing catch-up trying to purchase new vehicles for several departments, so there might be some extra expenditures in Capital Improvements until they are caught up.
Mayor Formon discussed the proposed new employees for 2007. He explained he’s asking for 9 new firefighters, 1 nurse/safety tech for the Human Resources Department, and one full-time employee in Building Maintenance that would replace two part-time positions. Discussion was then held regarding the need for more police officers. Councilwoman Furr noted the department is constantly getting further and further behind in officers.
Councilman Farmer suggested separating the restricted funds and sources of revenues to be able to quickly know where money is located. He noted it could make it easier to figure out where things needed to be changed in the future. He explained departmental budgets should show a breakdown of where revenue is coming from in relation to restricted funds.
OTHER
Councilman Farmer expressed concerns over the way the City funds some outside agencies. He noted for an agency to receive money from the CDBG Continuum of Care program a contract must be made. He explained with some organizations such as the Humane Society, Northeast Arkansans for Animals, Jonesboro Central Planning Association and the Downtown Jonesboro Association, there is no contract but they receive money from the City. He further explained after reading the Attorney General’s opinion on similar matters there are two options to correct the situation; the City can stop funding the organizations that do not have a contract or create City boards and commissions to replace the outside organizations so it can be funded through the City budget. He noted City Attorney Phillip Crego agreed with his interpretation of the Attorney General’s opinion.
Chairman Dover scheduled budget meetings for December 18th, December 20th and December 21st from 3 p.m. to 5 p.m. in the Huntington building. It was asked for Mayor Formon to set the times for the department heads to meet with the committee and for the schedule to be given to the committee members.
ADJOURNMENT
With no further business, Councilman Hargis motioned, seconded by Councilman Street, to adjourn. All voted aye.