City Council holds tense budget workshop
The Blackwell City Council held a budget workshop on Monday, June 17. Council members discussed several aspects of the city's budget, including the allocation of funds to add several new jobs, including two new positions within the city's electrical department.
The meeting began shortly after 12 noon. Members of the Council met at City Hall along with several city department supervisors. Frank Crawford of Crawford and Associates, P.C. presented the city's financial report. The budget document was prepared by RS Meacham CPAs and Advisors, the city's former accounting firm, and has been through numerous edits since Crawford agreed to assist in the budget preparation.
City Manager Janet Smith spoke first at the meeting. She noted that the city had cut costs by more than $177,000 by eliminating the city paying for spouse and family coverage, which was a matter discussed heavily during last week's Council meeting.
Smith said she would talk with Loftis & Wetzel, the city's insurance broker, about a 4 percent commission that would save the city an additional $10,000 - $20,000, since Insurica's proposal included a reduced commission from 5% to 4%.
The cost of paying for employee insurance for the year is approximately $500,000. Smith also noted that there would be no COLA for city employees this year due to 'unknown' aspects of the city's finances at this time.
City management is requesting that council approve a 3.5% increase for all utilities to keep up with current costs of goods and materials, and to assist in personnel. For Fiscal Year 2018 - 2019, which ends June 30, Crawford noted that the city had budgeted to spend $5.2 million. He added that the city was "on track" to spend only $4.6 million, which he called a "plus." On the Blackwell Municipal Authority side, Crawford noted that the city planned to spend $9.5 million by the end of the month. For the next fiscal year, $10.5 million will be budgeted, but there may yet be further reductions before the final budget is adopted.
The next item of discussion was a request by Greg Sixkiller, supervisor of the Blackwell Public Power Department, to add two positions within his department. Sixkiller said he would like to hire a warehouse dispatcher and a lineman.
The leaders of other city departments supported Sixkiller's request. Dispatchers at the police and fire department are currently responsible for dispatching the electrical department, and officials agreed that this added "unnecessary pressure" for the dispatchers. Having a full-time dispatcher at the electric department would be "beneficial," they said.
After hearing from Sixkiller, Councilman Jon Webb said that the city needs "clear goals and objectives" financially. He asked, "What are our priorities? How are we going to make these decisions?"
A specific item that Smith discussed at the meeting was how the city paid approximately $419,000 out of the general fund for work done to the city's event center.
Smith believes that this money should have been paid out of the city's sales tax collections, as the event center deals with local tourism. Smith said the general fund is used to pay staff, so she recommended that the Council reimburse the fund with sales tax revenue.
Mayor T.J. Greenfield and Webb said that a "shell game" was being played with the city's finances, a statement that Smith argued against, saying it was “not a shell game.” "If I don't reimburse the general fund with the $419,000 from the sales tax revenue, then where am I going to pay my employees?" she asked.
Greenfield said that Smith needed to "more clearly differentiate" between accountable expenses and operational expenses. Greenfield said Smith was "tying the two together."
"So what are you going to do when you need [the funds] again or you think you need them again? Where are you going to pull that from?" he asked.
Smith replied that she was going to take money from "the right place the first time." There are restricted use funds such as the recreational sales tax and hotel/motel sales tax that can only be used for certain purchases. The Blackwell Public Trust funds are set up much the same in that they are restricted for use in certain categories, but as long as the use is allowed, then the funds can be accessed.
Greenfield then asked Smith, on the subject of smart financials, why the city didn't do a lease-purchase on the electric department's bucket truck, which was an item of debate at last month's Council meeting.
Greenfield said a lease-purchase would have resulted in less money being spent at once. The bucket truck was purchased using BPT funds from the capital improvement fund and was paid for completely in a 3-2 vote of the council last month.
"You heard in the same meeting I attended that the city clerk did not turn in the paperwork," Smith said. Greenfield then asked whether Smith was technically the city clerk's boss.
The Council appointed Merry Whitham, who previously served as the city clerk, to serve as the interim city manager following the November resignation of then-manager Thomas “Chip” Outhier.
Whitham served as interim manager until Smith was hired as manager this year. During this time, she served as both the clerk and the city manager.
"If the clerk tells me she's done something, I take her at her word," Smith explained. Smith said that when the new city clerk - Traci Hanebrink - took office, Smith and Hanebrink discovered that the former clerk had not sent in the paperwork. "But that was a very important item," Greenfield continued. Smith said she trusts her employees. When they tell her they've done something, she accepts that, she said. But Greenfield reiterated that Smith should have made sure everything was done properly.
"I'm only making a point," he said. Smith agreed that Greenfield had made his point.
Also at the meeting, Jim Hoos, the supervisor of the city's water department, noted that the department's C Street project would likely be completed in three weeks, weather permitting. After that project wraps up, the department would start on the Lincoln Street project by the end of July. Hoos noted that progress was "slow, but moving along" due to recent weather, and he declined the offer from council to hire two additional employees.
Webb asked if the city of Blackwell was "moving in the right direction" with sales tax revenue dropping. He said that people are moving away and that utility rates continue to rise. He stated that people would only "take so much before they rebel." "We're not playing games," Smith said. "We have got to get our spending under control. I'm not bringing you a huge improvement package right now, because we have to see where we are first financially. I hear from residents every day about what we need. It hurts our employees to see no raises. ... I get asked every day if there's going to be money for improvements, and I have to tell them, 'I don't know yet, but I'm working on getting those answers as quickly as I can.'"
Smith clarified the city of Blackwell will be uncovering "where their money is." She also said the city will have its financial records more readily available for department leaders and employees to see once the Incode system begins being utilized to its fullest potential. Smith said there has been a kind of "hole" for information that mainly is used by the utility department, but it will be brought up to date going forward.
Smith said that the city's former accounting firm drew from general fund expenses rather than "specific, dedicated funds" for projects. That is something that both Smith and Crawford were "hoping to avoid," saying they plan to ensure that the city will have "smarter spending" across the board.
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