Measure to change fiscal year may go to Crestwood aldermen
An ordinance changing the city of Crestwood's fiscal year to a calendar year could be considered by the Board of Aldermen as soon as next week.
The city's Ways and Means Committee voted unanimously Saturday morning to have an ordinance drafted for the Board of Aldermen's consideration that would change the city's fiscal year to a calendar year.
The city's fiscal year now runs from July 1 to June 30. If the proposed ordinance is adopted, the fiscal year would begin Jan. 1 and end Dec. 31, effective Jan. 1, 2005.
City Administrator Don Greer said he would like the Board of Aldermen to consider the ordinance when it meets at 7 p.m. Tuesday, Jan. 27, at City Hall, 1 Detjen Drive.
In a Jan. 17 memo to the Ways and Means Committee about his recommendation to change the fiscal year to a calendar year, Greer wrote, "This will need to be considered and approved most appropriately at the board's second meeting in January (Jan. 27); no later than the first meeting in February. Otherwise, we will need to begin the full budget process.''
During Saturday's meeting, Greer said, "... It's my intention to have an ordinance prepared for the board's consideration at their Jan. 27 meeting. I know we've talked about this on a number of occasions and talked about the reasons why, but there are a number of things that need to be addressed. I want to make sure you're comfortable with that.''
The ordinance changing the fiscal year also would include a transition schedule.
"In essence, the period from July 1 through Dec. 31 of 2004 would be covered by an appropriation ordinance,'' Greer said.
The appropriation ordinance would be a "mini-budget'' authorizing the continuation of current expense items, including employee salaries, debt service and capital expenditures, according to Greer.
The appropriation ordinance also should involve establishing a non-expendable trust account for cash reserves with a target amount for those reserves, perhaps $1.5 million, according to Greer.
During the discussion, Mayor Jim Robertson said it was his understanding changing to a calendar fiscal year would allow the city to better control its expense position.
For example, the majority of revenue Crestwood receives is generated by sales tax, primarily during the holiday shopping season. However, the city does not receive the sales-tax revenue generated by the holiday shopping season until March.
With the current fiscal year, if Crestwood receives less sales tax than anticipated from the holiday shopping season, city officials have roughly 90 days to make adjustments before June 30 — the end of the fiscal year. A calendar fiscal year would give city officials about nine months to respond if the holiday shopping season generates less sales-tax revenue than projected, the mayor noted.
Greer said, "I can sum this up in two words — cash flow. That's what I've been preaching for quite a while and you're exactly correct and you're exactly on point.''
Robertson said, "The reason I bring this up is that it's been suggested in some media outlets that for some reason or other changing the fiscal year was some kind (of attempt) to distort the report of actual expenses and revenues on a monthly basis for the city and that's not true. Those numbers won't change on a month-to-month basis. They're just there.''
Greer said, "Well, it's also been suggested that this is not the time that we should do it (change to a calendar fiscal year), which is exactly the opposite ... It's critical that we do this because it is related, it's all related to management of cash flow and based upon our cash flow, it is imperative because we can manage the expense side. We have control over the expense side — to be able to manage those expenses in a manner in which it maximizes our revenues and gives us a sufficient time to be able to recover from any ... variances.''