Here’s the text of the memo sent by City Manager Randy Robertson to the City Commission on May 12, 2008 along with the budget sheets:
May 12, 2008
Mayor Elam, Vice Mayor Hagerty and Commissioners Bradshaw, Justice & Sellers:
Attached, please find submission of the City of Mt. Juliet FY 2009 budget.
From a fiscal perspective FY09 appears to be a year of transition. As you know, Mt. Juliet has experienced unparalleled growth for the last few years. Our population now exceeds 25k, the Providence Marketplace is near full capacity, and several major projects, including Paddock’s Place are scheduled to open in the not too distant future. New businesses are coming to Mt. Juliet every month while existing establishments have indicated they plan to expand in the near future. Simply based on those variables the prospects for future growth appear bright.
However, as each of you know there has been a measurable slow down in the national economy, with incremental declines affecting both Middle Tennessee and Mt. Juliet. Housing starts in the city over the last quarter have declined by nearly a third from the same time last year. The price of fuel is at an all-time high, which ripples through virtually every operational element of city government; the same can be said for utilities, with TVA and MTEMC raising their collective rates by nearly 12%. Health care expenses continue to rise at a double-digit rate, while costs for capital projects, particularly those related to roads and infrastructure have seen comparable price increases. Finally, every economic barometer in this region reflects that sales, property and income (e.g., the Hall tax) tax revenues are on the decline.
With the above in mind, the Department Heads and I are presenting a budget that has already been sharply reduced from its initial version. From an operational perspective, the budget before you is essentially a reiteration of the FY08 budget. With the exception of our new Animal Control mission, this budget is remarkably similar to last year’s. There are no mission growth areas in Public Works, the Police Department, Planning, Zoning, Sewer, Parks and Rec, Administration, Finance, Economic Development or Human Resources. As indicated, the only new missions embedded within the FY09 budget is related to operational expenses for our new Animal Control Facility. We believe the Animal Control budget is as austere as possible, however, without a benchmark of prior years’ activities, we have developed that budget around the experience of comparable facilities in this region.
As noted, we see FY09 as a transition year for Mt. Juliet finances. With the projected opening of Wal-Mart, Lowes, Publix Grocery and Two Rivers Ford during the first six months of the FY, we anticipate significant economic changes starting in the January ’09 timeframe. Simply stated, if those businesses open as planned, and if sales tax is comparable to other similar stores, we project as much as $500k will be generated as sales tax revenue between February and July of next year. Those factors were considered in developing this budget, highlighted by a list of
unfinanced requirements (UFR’s) included within your book.
Overall we see general fund revenue at approximately $ 10.4m, with an estimated ending FY08 general fund balance of roughly $1.4m. As previously indicated, departmental budgets are essentially flat, with exception of the Animal Control Facility mission, and an initial 2% cost of living adjustment in July, followed by an additional 1% in January predicated upon the opening of Paddock’s Place. While this COLA is well below the Department of Labor’s consumer price index (CPI) of 4.9% increase for south urban areas (CITATION: U.S. Dept of Labor, Bureau of Labor Statistics: http://www.bls.gov/cpi’), we are proposing that to posture a reasonably healthy fund balance.
Based upon the attached, the FY09 year end general fund balance would be approximately $850k. Approval of the budget provides Mt. Juliet with the capabilities to sustain its current operational pace, care for the citizens, the mission and its employees, while making significant inroads in servicing debt associated with ROW acquisitions for 1-40 and the extension of Mt.
Juliet Road. Unlike last year’s, it is not based on projection that may or may not occur.
Recommend approval of the proposed FY09 Mt. Juliet city budget.
Randy Robertson Kimberly A. Vollet
City Manager Finance Director
There apparently is no budget ordinance yet. The budget ordinance is the summary document actually passed by the City Commission and contains the estimated fund balances for June 30, 2008 and the projected fund balances for June, 2009.
Until an ordinance is drafted, it’s hard to actually determine the full effect of this budget.
It IS puzzling that Robertson estimates the FY08 ending general fund balance at $1.4 million, and projects that falling to $850k at the end of FY09. The City borrowed $10.0 million in February of 2008. The bond proceeds should have been placed in the general fund. If there is only $1.4 million in the general fund, then WHERE DID THE $10.0 MILLION GO?
The detailed, depart-level budget worksheets are in the .pdf file linked here.
It’s a 3.75mb .pdf file, so be patient.
Here is a link to an updated version of the FY08-09 budget – this includes the text of the ordinance and is what the City Commission considered at its June 09, 2008 meeting.