Where the Money Goes.

Submitted by City Administrator Tom Short to the Mayor and City Council.

"Mayor & Council Members: Based upon the City Council’s Budget Ways & Means Committee budget hearings with Department Heads, outside agencies, and public hearings concerning the Fiscal 2011 budget, submitted herewith is the Committee’s recommended annual Operating and Capital Improvements Budget for the City of Carthage for Fiscal Year 2010-2011. The originally submitted budget has been changed and modified throughout the hearing process based on input from the public, Mayor, Council Members and Department Heads. This final document reflects those changes discussed and approved by the Budget Ways & Means Committee. This document is being presented under the provisions of Article VII of the Home Rule Charter for the City of Carthage and Section 2.161 ofthe Carthage Code of Ordinances for Council consideration.

BUDGET OVERVIEW As reported in a January 2009 report, Navigating the Fiscal Crisis: Tested Strategies for Local Leaders, "This economic crisis is deeper and more severe than what we have experienced in the past 50 years. While some U.S. regions and localities are experiencing the downturn differently, for the first time in the postwar era, all levels of government are impacted with dramatic revenue reductions simultaneously." This is the environment the City has been operating under for the past year and a half. Last year’s budget was cut by approximately 5% -10% due to these economic conditions. This fiscal year these same economic conditions remain. However, lately there have been signs of light at the end of the tunnel. According to a Creighton Economic Forecasting Group report, "the March Business Conditions Index for the Mid-America region climbed for a fourth straight month, pointing to a growing economy in the months ahead, according to the March Business Conditions survey ofsupply managers and business leaders in the nine-state region." "For a third straight month, the regional employment index rose above growth neutral." However, there is now a fear of inflationary pressures and increases. This fiscal year, as last year, the main issue facing the City is a decrease in overall revenues due to the general effects of the recession hitting the United States economy. The City has experienced a slowdown over the past two fiscal years. Based on revenue projections for fiscal 2010, the City is anticipating an increase in budgeted revenues of approximately $135,767 in the General Fund. This includes one-time funds of over $240,000 from a SEMA reimbursement and a cell phone lawsuit settlement. Without the one-time money, revenues are estimated to be $139,000 below the original budgeted amount. Additionally, the Mayor and the Budget Committee indicated their preferences, if possible, to not adversely impact staffing levels. With these conditions in mind, departments were directed to prepare a budget concentrating on providing core services and cutting 5% of 2010 operating expenses (Personnel, Supplies & Services, and Travel & Training expenses) in the 2011 budget. In earlier discussions with the Budget Committee, it was tentatively decided that as the City had maintained a level of unallocated fund balance above its minimum in the General Fund over a number of years, that it would use a portion of the extra to supplement operations this fiscal year until the economy rebounded. A review showed that the City could sustain using the unallocated fund balance for two or three years depending on the overall level of expenditures while the economy recovered. However, if the experts are correct in saying that the current situation is the new normal, then the City should start preparing to develop a budget where the revenues and expenditures match; basically live within its means. Other decisions regarding the levels of services provided by the City and the proper revenue mix (including new revenues) were tentatively explored pending a mid-year review of fiscal 2011 ‘s budget. There is only a limited time period in which the City can use its currently available extra fund balance money. The Citizens of Carthage have come to rely on and expect a certain level of service that the City provides. Making major cuts in service levels in the midst of this economic crisis would be harsh. There were however, still cuts made by the departments to bring the budget to the level presented. Cuts impacting levels of service were made as minimally as possible based on Department and Agency proposals to the Budget Committee. Still, even though the Fiscal Year 2011 Budget calls for a smaller, more productive and more efficient organization, it will be up to City departments to maintain as high a level of service as possible. The City still enjoys a General Revenue Fund fund balance which provides a "comfort level" for Fiscal stability. In 1997, the City Council adopted an ordinance establishing a minimum fund balance in the General Fund. This minimum balance was adopted at a level equal to 33% ofthe City’s annual operating expenditures. The City, due to conservative revenue projections and prudent fmancial management over these years, had accumulated an ample fund balance. Estimates for this Fiscal Year indicate that the fund balance will total more than $3,195,476 to begin the Fiscal year. This is somewhat higher than the estimated beginning fund balance for Fiscal 2010. This year’s budget expects to use a portion of the accumulated fund balance. This year again, the Budget Ways & Means Committee recommended the reserved fund balance be set at 25% (three months) of operating expenditures. This year’s budget continues to reflect a number of Council goals and priorities from previous years. These are set out in the policy portion of this document. The provision of giving priority to those items necessary to maintain current service levels for the City (even in light of the economic problems), has been met for the most part, in this budget. This illustrates the Council’s commitment of providing comparable service levels previously enjoyed by the citizens of Carthage in light of projected revenue levels. The Council has continued to regard economic development as an important priority for the City’s long-term development. This has led to the City continuing to contract for economic development services through the Chamber of Commerce at the same level as Fiscal 2010. Also, the need to maintain and improve city streets has been established and addressed as another important objective this year. Although growth was taken into account, a conservative approach was used to estimate the anticipated 2011 revenues. Projecting revenues in a conservative manner represents another policy decision of the Council to carefully manage the City’s financial assets. Sales Tax revenues were projected to change based on historical trends plus anticipated economic conditions.

Property Tax revenues were projected to change by historical growth factors."

The question has ta be asked. How much is the City Golf Course worth to the community?

As we saw in yesterday’s Mornin’ Mail article concernin’ the golf course finances, it will need a little over $75,000 from the City General fund to break even for operatin’ expenses. A little over $180,000 will be needed from the special golf course fund to make a payment on the renovations that were completed in 2002. The special fund has enough to make the payment another year or two, but there are seven years left on the obligation.

While other departments in the city were asked to shave their budgets to the bone, the golf course reduced its projected budget by less than one percent. How much support can the City commit?

This is some fact, but mostly,

Just Jake Talkin’.

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Weekly Columns

To Your Good Health

By Paul G. Donohue, M.D.

Most Don’t Have

Second Heart Attack

DEAR DR. DONOHUE: About six years ago, I had a heart attack. The doctor said there was hardly any damage. Is it likely that I will have another heart attack? I am overweight and have a hard time losing weight and keeping it off. -- C.P.

ANSWER: The chance of a recurrent heart attack for men is 21 percent; for women, 33 percent. Looked at in the opposite way, the chances for not having a second heart attack are very good. Figures like these are deceptive when applied to an individual. A person’s efforts to decrease the risks of having another attack are the keys to not having one.

Those risks include dealing with obesity. Even though weight loss is difficult for you, you must make an effort to reduce your weight. A dietitian can help you with the diet part. You have to increase your physical activity. Inactivity is an invitation to artery clogging and heart attacks. Ask your doctor what kind of exercise is safe for you. Walking is permitted for most, and walking is a way to strengthen your heart, clear your arteries and lose weight.

You also have to watch your cholesterol in all its forms. HDL cholesterol keeps heart arteries free of plaque buildup, and LDL cholesterol encourages it. You have to keep an eye on your blood pressure, another ingredient for heart attacks.

The fact that your doctor said little damage was done to your heart puts you into a class of heart-attack patients who are at low risk for having another.