Projected $1,155 '04 budget surplus worries Ward 1 Crestwood alderman
By MIKE ANTHONY
Crestwood Ward 1 Alderman Richard LaBore recently voiced concerns about the projected ending fund balance of the fiscal 2004 operating budget being recommended by City Administrator Don Greer.
Greer's recommended fiscal 2004 operating budget projects net expenditures totaling $8,586,812 with anticipated revenue of $8,587,967 for a surplus of $1,155.
During a May 17 work session, LaBore twice expressed concerns about the projected $1,155 surplus, noting at one point, "It sounds pretty tight.''
Besides more than $113,000 included for salary adjustments under a pay plan adopted last year by the board, the recommended operating budget includes an additional $94,000 for potential merit increases for employees — an aggregate merit adjustment of 3 percent for eligible employees.
But LaBore suggested that aldermen may want to consider budgeting less than 3 percent — perhaps 2 percent — for potential merit increases.
However, Greer and Mayor Jim Robertson recommended against reducing the amount of money projected for merit adjustments for eligible employees. Furthermore, Greer assured LaBore that the budget would balance, explaining that he and Director of Finance Diana Madrid have taken a conservative approach to projecting revenues, while making anticipated expenditures as realistic as possible.
For the general fund, total expenditures of $9,780,801 are projected for fiscal 2004 with anticipated revenue of $9,854,283, including a total of $1,193,988 in transfers from other funds.
Based on a projected undesignated fund balance of $72,328 on June 30 of this year, the fiscal 2004 general fund budget anticipates an undesignated fund balance of $73,482 on June 30, 2004.
For the current fiscal year, total expenditures of $9,590,125 are projected in the general fund with anticipated revenue of $9,662,453, including a total of $964,000 in transfers from other funds.
For the current fiscal year, the city had an audited undesignated fund balance of $132,334 and an undesignated fund balance of $72,328 is projected on June 30.
Greer and the board discussed at length the impact of the new pay and classification plan that is designed to compensate employees based on their performance and the value of their job as determined by the marketplace.
Under the plan, an employee can earn from 92 percent to 103 percent of his job value, while superior and exceptional performing employees are eligible for higher percentages of compensation.
During the discussion, LaBore noted the projected operating fund surplus of $1,155 and questioned whether less should be set aside for potential merit raises.
Ward 4 Alderman Tom Fagan noted that Greer's projection for potential merit increases totaled roughly $94,000 and reducing that by 1 percent wouldn't have that much of an impact on the budget. He also inquired about what im-pact reducing the amount of potential merit increases would have on employee morale.
Fagan asked Greer, "... In your professional opinion, would that have a detrimental effect on employees?''
"There are a couple of things that I would like for you to keep in mind ... Remember that there was no merit adjustment last year,'' Greer said, adding that the revenue projections included in the proposed budget are probably the "most conservative'' that the board has ever seen.
Still voicing concerns about the amount of the projected operating surplus, LaBore later raised the possibility of whether aldermen should consider budgeting less for mer-it pay increases.
"Let me raise the question whether we should be placing less into the personnel section, the merit,'' LaBore said.
Greer said he hoped to assure LaBore that the revenue and expenditure projections contained in the recommended budget are accurate.
"I would hope that my very conservative approach to presenting a document doesn't lead you to go further in terms of restricting the expense,'' Greer said, noting ex-penses have been reduced substantially.
"I have a different philosophical approach to budgeting than what you've been experienced with. I do not like to plan on revenues that I don't feel comfortable with. I like the idea of, it's almost a zero-based budgeting concept, certainly until we get our fund balance built to where we need to be and what that means is let's make our expenses as realistic as possible — as realistic as possible. In Ways and Means I know there are a couple times we talked about different things that I estimated for cost that even looked a little high. Now my way of looking at that is because I have $50,000 in there doesn't mean that I'm going spend $50,000 in there. If I spend $20,000 in there, good, we're $30,000 to the good ...,'' he added.
Noting that he and Madrid "independently, yet collaboratively,'' worked to project the city's revenues "and we both approached it from a very, very conservative standpoint. We have not inflated our estimates of revenues in order to meet the expense. I don't believe in that. I think that's a recipe — well, it is a recipe for disaster. We've been living that for the last several years. This budget will balance. It balances and it will balance much better than $1,100 because I've kicked the crap out of the revenues.''
Referring to LaBore's concerns about the projected $1,155 surplus, Robertson said, "I guess what I want to say about that is you shouldn't be frightened by being in the black by $1,100. We ought to be frightened about being told the budget balanced for the year '02 and it was actually at least $260,000 in the hole. Now the question is which do you prefer? ... We've been spending more than we've been taking in for years, that's why we don't have $2.25 million to deal with the reserve issues. That money went away.''
Greer said, "The other difference and the other significance that I really kind of allude to just at the end of the narrative is also, and as I was mentioning earlier to you, a budget is a living, breathing document. It's something we manage throughout the whole year. There is in the operating, the line items, the operating budgets for all the different departments, there's just little to no discretion. Any time I saw an account number that I didn't understand, somebody got me documentation. I've beat these things to death. There is not a lot of discretionary expenditures.''
He noted that from time to time, he may bring budget adjustments to the board.
"You're going to see ordinance adjustments and changes to the budget so that we manage this plan, this document, throughout the whole year so we always know where we're at ...,'' Greer said.
Board members will review the capital improvements budget and the parks and stormwater budget during a work session at 9 a.m. Saturday, May 31, at City Hall, 1 Detjen Drive.