Mayor: Proposed budget cuts back on capital projects not services

Morgan City officials don’t plan to spend any money on new projects in 2017 because of cutbacks due to the economic downturn, but residents can still expect the city to provide them the same services as usual, Mayor Frank “Boo” Grizzaffi said.
Grizzaffi presented the proposed budget to the council Tuesday in his annual budget message.
The council went through a first reading of the budget for the fiscal year beginning Jan. 1.
The proposed $35.3 million budget reflects a predicted downturn in revenues for the second straight year, and the proposed budget is almost $400,000 below the 2016 budget of roughly $35.7 million, Grizzaffi said. The city’s general fund budget will remain at about $1.65 million.
As a result of the down economy, all capital project expenses in the city budget are classified as non-funded. The finance committee will recommend any capital expenditures, as needed, to the council.
But cutbacks shouldn’t have any effect on the services that residents and business owners expect from the city. The only effects the public may see from spending cuts are fewer non-essential projects that leaders were “doing to improve our city,” Grizzaffi said.
“The unpredictable economic recovery” influenced city leaders to change how the city will operate and money is spent, the mayor said. Officials will recommend all expenditures outside of normal operations to the finance committee “on a case by case basis,” he said.
Still, the city’s finances have significantly improved over the past few years, which has allowed city leaders “to keep the budget balanced during distressed economic times,” Grizzaffi said.
Morgan City officials project to have an ending fund balance of $26.1 million for the 2017 fiscal year. The 2016 amended budget shows an ending fund balance of $27.7 million.
City officials have budgeted for a 2 percent decrease in sales tax collections in 2017 compared to 2016. Property tax collections are budgeted to stay neutral, while occupational license fees are expected to decrease.
Included in the proposed budget is a 2 percent longevity raise for all full-time city employees who have been employed by the city for over a year. Those raises will cost a total of $145,832.
The city predicts to get $33.7 million in total revenues in 2017. Utility operations are projected to cost $17.3 million and bring in $21.7 million in revenues, up from the $20.3 million in revenues in the 2016 amended budget.
Each department in the city has the following proposed budget: police, $3.7 million; fire, $2.5 million; public works, $1.8 million; recreation and culture, $2.5 million; and sanitation and sewer, $3.3 million.
The council will hold a budget workshop at 4 p.m. Oct. 24. The workshop will allow department heads to discuss what they want and need in their individual budgets.
During the council meeting, Finance Director Deborah Garber said the city’s year-to-date revenues in the general and ancillary are over budget by $454,700; sales tax revenues are under budget by $171,300; and operating expenses are $135,200 over budget as of Aug. 31.
In the utility fund, energy and gas costs are $500,000 under budget; operational expenses are $483,000 under budget; and revenues are $64,000 under budget.
Sanitation and sewer fund operating expenses are $215,400 under budget, while operating revenues are $29,500 over budget.
Also during Tuesday’s council meeting, Grizzaffi said the city is preparing to unveil three health insurance plan options for city employees at an Oct. 17 insurance committee meeting. The committee will also consider setting a cap on how much the city will pay in premiums for each employee, Grizzaffi said. The plans will go into effect Jan. 1.
In other business, the council
—Approved the city’s Municipal Water Pollution Prevention Audit Report.
—Set the November and December council meeting dates for Nov. 22 and Dec. 20.
—Approved St. Mary Outreach and United Way to use the Morgan City Petting Zoo from Oct. 24 to Oct. 29 for the annual pumpkin patch and Boo-to-Zoo activities.