City adjusts budget to erase deficit

The Bogalusa City Council Tuesday unanimously approved a revised 2009 operating budget that projects a positive General Fund balance, and therefore, abides by state law.

In September, auditor Richard Seal told the council that the 2009 budget was based on a 2008 budget that ended up with a $1.3 million deficit, which was $888,770 more in the negative column than projected. He also pointed out that it is against state law to have a deficit at all.

Seal recommended that the 2009 budget be amended to reflect the additional six figure deficit.

“The trick is, you’ve got to amend it and not have a deficit fund balance,” he said.

City Administrator Jerry Bailey and staff have been working on that, and the amended version was up for adoption Tuesday.

In a letter to council members included with the document, Bogalusa Mayor Mack McGehee outlines how the city found “excess revenue and other financing sources over expenditures of $1,465,770, resulting in a positive General Fund balance of $105,910.”

In general, “total revenues for the 2009 Revised Budget are anticipated to increase 2.5 percent or $203,320, largely due to the obligation of FEMA reimbursements for hurricanes Katrina and Gustav, and more grant funding during 2009,” he wrote.

But the $100,000 awarded in the Louisiana Construction Code Grant has been eliminated because the city is no longer performing the functions associated with that grant, said McGehee.

Under the revised budget, total expenditures decreased by 1.2 percent or $117,320, he said.

McGehee later stressed that the amended budget reflects projected finances.

The points the mayor refers to in the letter include stabilizing and cost-cutting as well as revenue enhancement measures.

He said that although health insurance costs rose to more than $250,000 in 2008, there was no increase in that expense in 2009, and that fuel prices and utility costs were significantly lower in 2009 than in 2008.

The city has “made headway” in reducing fuel costs by about $3,500 a month by parking “take-home” cars, said McGehee. And the cell phone bill has been cut in half, he said. Travel expenses were cut, for a savings of $30,000, and the summer worker program was cut for an additional savings of $30,000, said McGehee. And the cancellation of the normal November distribution will save the city close to a half a million dollars, he said.

Vacant positions in the Public Works and Finance departments are not being filled in an effort to curb the salary expense through attrition, and the city’s delinquent collections procedures have been strengthened, resulting in increased collections and better cash flow, said McGehee.

On the revenue enhancement side, the mayor wrote that a $5 increase in court fines should generate about $10,000 a year to help cover police witness fees, which have doubled in the past two years due to state legislative action, and that a planned amnesty program is expected to bring in about $50,000.

A recent sewer rate increase is projected to bring in more than $600,000 annually; a franchise fee increase should generate an additional $75,000 a year and an additional $100,000 in property tax revenues is expected since the city millages were “rolled forward,” said McGehee.

Additionally, based on a Washington Parish Sheriff’s Office audit, the sales and use taxes are projected to increase by 1 percent over the original budgeted amount, he said.

Those and other measures, changes and adjustments will hopefully enable the city to stay out of the red, said McGehee.