Salina City Commissioners learned the City’s actual revenues for the 2018 general fund were $2,126,653 less than what was budgeted. Actual expenditures were less than budgeted by $773,624. This left an overall 2018 budget shortfall of $1,353,029.
The City’s 2018 budget authorized expenditures of $100,115,914 in all funds. Within the general fund, the 2018 budget authorized $42,233,141 in expenditures. 2018’s actual expenditures were $41,459,518.
The City’s 2018’s general fund had budgeted revenues of $42,707,172 while the City actually received revenues of $40,580,519. Commissioner Mike Hoppock questioned if the 2019 budget revenues of $43,192,950 are estimated high.
Debbie Pack, director of finance, presented 51 pages of figures and trends; this will be posted on the city’s website. Revenues from the electric franchise fee have decreased by $172,000 in December and January. The City inadvertently did not make a $411,000 payment to the State in one “flow-through” account that inflated reserves for possibly more than one year. There are declines in revenue from the gas tax and municipal court. In 2018, there was a $20,000 spike in “written off” costs for Emergency Medical Services (that are noncollectable, due to the patient being deceased and having no estate/spouse/assets).
City Manager Mike Schrage and Pack also identified the impact of a protracted software conversion from 2015 to 2017. Yearly audits were done, but results from two years of audits were delayed. There have been personnel changes in the director of finance office.
City Manager Mike Schrage said he met with department heads; many attended Monday’s presentation. At the commission’s discretion, he offered to do “deep dives” on 2019 revenue estimates. Schrage said the commission would receive quarterly budget updates. Pack promised some changes to accounting reports to detect line-by-line anomalies.
Former City Commissioner, Jon Blanchard asked if any of the information presented at Monday’s study session would have prompted seated commissioners to dial back on spending for the Streetscape and on the Lee Building. Blanchard said he wasn’t sure if the 2019 budget is a strong on anticipated sales tax revenues as projected and suggested that “maybe” the commission “should pump the breaks” on future projects.
Additional Details on Revenue and Expenditure Changes
According to the City’s 2018 Year-End Financial Recap, the federal Tax Cut and Jobs Act will produce a one-time $50 million reduction in revenue across all Westar communities. Additionally, merger credits amounting to a one-time, $23 million reduction in revenue across all Westar communities. These reductions were applied to customer accounts in 2018. Customers will continue to see additional merger credits amounting to $8.6 million in annual revenue across all Westar communities for the next four years. To date, the City saw a 51% decrease in its electrical franchise fees as compared to 2017 and a 9% decrease in January fees compared to 2018, for a total of $172,000.
From a 2006 State Legislature decision that no longer taxed machinery as property, the City estimated it lost $754,222 in annual taxes. The cumulative valuation lost from 2008 through 2019 is $30,182,985.
The Lambertz Real Estate Tax TIF declined. There were two years of early redemptions in 2016 and 2018.
As general fund expenditures, in 2018:
- A 2017/2018 rent lease of the Field House in the amount of $123,000 was not budgeted.
- Legal Services had $122,901 in unbudgeted expenditures regarding “annexation/animal services/open records/STAR bonds”.
- The municipal court spent an additional $131,287 because personnel was under-budgeted, as well as for medical services and inmate housing.
- Within the Fire Department, fire administration had an additional $42,707 in personnel services expenditures and EMS had an additional $306,951 in personnel services expenditures.
- There are multiple over expenditures in the Parks budget, totaling $68,277; but Parks would have been $54,000 under budget without the Field House lease payment.