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City manager forecasts $598,500 revenue shortfall

By Bill ShortFlag City Logo

City Manager Thomas Christie forecast last week that Millington’s expenditures will exceed its revenues by $598,500 when the current fiscal year ends on June 30.

He acknowledged that Section 9.08 of the City Charter requires him and Finance Director John Trusty to report any anticipated deficits to the Board of Mayor and Aldermen.

Noting that the administration has begun the budgeting process for the upcoming fiscal year, Christie said the “first step” was to forecast current year-end balances for revenues and expenditures. He called the result of the forecast “not positive.”

The city manager made the comments during his monthly report to the board at its March 5 meeting.

After amendments for Veterans Parkway construction have been made, he said, the budgeted use of the fund balance for current-year Capital Improvements Projects will increase from $574,826 to $1,588,840.

Citing a “positive note,” Christie said expenditures for all city departments are generally “within or under” budget. He commended the department directors and their supervisors for managing their departments “very efficiently” thus far this year.

“The net effect of expenditure reductions is about $248,000,” he noted. “This leaves us with projected expenditures exceeding projected revenues by $350,045. This is the projected deficit in the General Fund.”

For the board members’ review, Christie distributed “detailed sheets” that had been prepared by Trusty. In addition to the General Fund, he said others that are also projected to end the current fiscal year with deficits are: Water, Sanitation, DEA, State Drug and Storm Water.

Christie said he and Trusty expect that the board will want to schedule a work session to discuss methods to address the anticipated deficit for the current fiscal year, as well as issues relevant to next year’s budget.

He also said that will give Trusty enough time to make the work sheets as accurate as possible that the board will ultimately review.

“In the meantime, with the board’s permission,” he added, “I would like to instruct the staff that there should be a freeze on any new hires or equipment purchases in the General Fund and Street Department. And I would also like to suggest cessation of work on any current or new CIP projects, with the only exception being Veterans Parkway, which we sorely need to complete.”

Alderman Mike Caruthers asked whether Christie was suggesting that the work to widen Church Street also be ceased at this time.

“I think they all should be put on hold temporarily,” the city manager replied.

In response to a question by Alderman Thomas McGhee, Christie said that would also include money that has already been “set aside” for work.

When McGhee asked if that was because of “potential cost overruns,” Christie said it was because it “could very well” make the current deficit picture even worse before the end of the current fiscal year.

Also noting that he had received a quote from The University of Tennessee’s Municipal Technical Advisory Service regarding a Comprehensive Management Review, he said the estimated cost is $20,000 to $25,000.

“Due to the cost, and because I feel comfortable with performing this function myself at this time,” he concluded, “I cannot recommend this expenditure and this process, especially in view of current budget conditions.”

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March 2013
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