Grizzaffi: Health care, insurance fuels budget increase

The city’s proposed 2015 budget shows a more than 5 percent annual increase in expenditures, but that jump was mostly caused by rising insurance and health care costs, according to Mayor Frank “Boo” Grizzaffi.
Grizzaffi said the city’s proposed 2015 budget is a much more refined budget than the 2014 budget because he has had a year to learn how to develop the budget.
Grizzaffi wanted to present a budget with expenditures lower than the previous year, he said. However, due to increases in insurance costs, health care costs, retirement costs and pay raises, doing that would have been “almost mathematically impossible,” Grizzaffi said.
City officials estimated a 5 percent increase for the cost of health care coverage, which Grizzaffi said could end up being higher in actuality, he said. Additionally, all city employees who have been employed by the city for a year will get 2 percent longevity raises, the mayor said.
Still, the city has increased revenue with hikes in city sewer and sanitation rates, Grizzaffi said. The city’s proposed 2015 budget increased about 5.6 percent to $38,757,039 from $36,708,661 for the 2014 estimated amended budget. The 2015 budget shows 248 employees compared to 247 employees in 2014.
Total city revenues have increased roughly 1 percent from $37,884,768 in 2014 to $38,273,901 in 2015. The budget includes funding to meet new water regulations the state is enforcing, he said.
The city’s total projected ending 2015 fund balance of $25,956,831 is not cash the city has on hand, Grizzaffi said. The 2014 ending fund balance came in at $26,339,968.
Most of the city’s fund balances do not consist of cash, Grizzaffi said. Before Grizzaffi took office, the city would borrow from fund to fund. The practice is legal, but those funds from which the city borrowed were never paid back, he said.
Grizzaffi spent a year and a half trying to pay back the funds. “When I look at the books, and I look at the fund balance. I want that to be a cash balance,” Grizzaffi said.
The city’s sewer lift stations need to be addressed during the coming year because they have significantly deteriorated, Grizzaffi said. “These are expensive measures. These are $350,000 (to) $500,000 fixes,” Grizzaffi said. “So that’s all placed in this budget.”
The City Jail is the one department that has undergone a remarkable change, Grizzaffi said. “The jail has been a financial burden on the city for many years,” Grizzaffi said. The change was partly due to housing all St. Mary Parish female prisoners, which increased revenue by $145,000 but only raised expenses $40,000, he said.
The jail has come a long way from losing money to showing growth, and that growth has allowed the city to make repairs that had been neglected, Grizzaffi said.
In past years the city has routinely budgeted for a 2 percent increase in parish sales tax revenue. But because of recent flat sales tax numbers, the city is not budgeting for any increase in sales tax revenue, Grizzaffi said.
The city has budgeted $22,985,274 in utility revenues for 2015, about a 6.25 percent decrease from the $24,518,482 in 2014 utility revenues. Grizzaffi said the city receives those numbers from the Louisiana Energy and Power Authority, and the city does not play a role in determining those numbers.
The proposed budget shows $2.19 million in capital outlay projects, which breaks down to about $1.3 million for the city’s wharf improvement project on the riverfront and about $900,000 for three new cabins at Lake End Parkway, Grizzaffi said. All of that funding is being paid for through grants, he said.
Grizzaffi hopes to be finished with the design phase of the city’s wharf project in October. Construction should be able to start in January, and finish by July, the mayor said. The contractor should break ground on the cabins within the next 90 days, he said.
The city has cut its mosquito control expenses in half by taking over mosquito control from a private company and has budgeted $140,000 for those expenses, the mayor said.
While preparing the 2015 budget, the city got two surprises in the fire department’s budget, he said. The department needs 42 air packs, Grizzaffi said. “That’s $6,100 apiece,” he said. Therefore, Grizzaffi budgeted to buy 10 in 2014, 10 in 2015 and 10 in 2016, he said.
In the recreation department, the city has budgeted money to put more lighting at Lake End Park and will put playground equipment at the parkway, he said.
City officials plan to upgrade the gas lines in Cypress Gardens subdivision in 2015, Grizzaffi said. The mayor has budgeted $500,000 for roadwork in 2015, he said. The 2015 budget includes about $960,000 in its road and royalty fund from the parish three-tenths sales tax while the city has about $405,000 in debt service in that fund. “That’s one of the few accounts that’s got real money in it,” Grizzaffi said.
The budget includes $100,000 to trim tree limbs to get them away from power lines in order to try to prevent power outages, he said.
The mayor presented his annual budget message at the Sept. 23 City Council meeting. A budget workshop will be held Nov. 6, and the budget will be up for adoption at the Nov. 25 City Council meeting.