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Morgan City Acts to Correct $300K Shortfall

Article Date: 
14 January, 2011 (All day)


Morgan City took action this week to close the gap on the budget shortfall the city is facing.  The city is working to address a situation where incoming revenues were $300,000 below expenditures.  

Since at least 2008 the city has been spending at levels higher than revenue.  The city has been drawing from the PTIF fund.  This fund is created in years when revenues exceed expenditures and acts as a rainy day fund for governments.  For the last few years the city has drawn from this account until it has reached the minimum state required amount.  

The account must have at least a five percent reserve based on the state requirement.  Morgan City reached that minimum level and so was faced with significant cuts to bring expenses in line with revenues.

The city made a number of  budget adjustments, including making changes to where salaries were being charged.  They began charging an administrative cost to the city RDA.  The city’s legal council indicated that they could go back five years and charge administrative expenses to this agency that is a part of city government, but has a different, designated budget fund not available for general city spending.  This provided $50,000 in relief to the budget.  

The city also transferred portions of the its salaries to the enterprise funds.  The salaries being charged to these funds are related to providing the services.  The enterprise funds are those that are associated with water, sewer, sanitation, and electricity.  If the expenses are above revenues in these accounts it will mean rate rises to customers of these services. 

The city has also taken action to reduce expenses for some of its part time employees.  When the city had completed all of these cost cutting measures they still found themselves with just under $80,000 in additional expenses that needed to be cut.  

The city determined that, based on their financial situation, they could not renew their portion of a three-way contract to pay for a portion of the school resource officer.  The city, county, and school district have all been funding a portion of the cost of this officer.  The school resource officer is one of the deputies from the Sheriff’s department assigned to the high school.  

The officer deals with any law enforcement issues in the school and also acts as a part of the schools emergency preparedness program.  Mayor Egbert indicated that the city’s research had determined that in many counties the school district bears the cost of this resource officer and with the budget shortfall the city could not support paying for a portion of this position.

The city then also approached the county about reducing the dedicated law enforcement recently negotiated with the county.  After many months of negotiations the city had come to agreement on two full-time dedicated positions to add more law enforcement presence in the city.  Based on budget challenges the city has asked the Sheriff’s office to reduce this to one officer.  

Council member Betz indicated that the with the vacant positions in the Sheriff’s office that the city had been receiving less than two full time positions over the last few months and that the city could provide the most needed services with just one officer.  “The service has been great, and the citizens have responded positively,” commented Betz, she added, “This is strictly a budget issue.  We will be able to continue to provide service in designated hours and in school zones and cross walks.”  Betz expressed that this is one of the key areas to provide a safe environment for the school children.

The city hopes that these changes will be sufficient to bring expenditures in line, but will be reviewing the situation further as they begin discussions about the budget in March.  Revenues show some sign of improvement, but with the reserves being at the minimum required level the city is being cautious about getting expenditures under control.