Budget approved by city council

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Discussions about the city’s budget for the current fiscal year were business as usual Tuesday night with the exception of one topic.

After the public hearing at Tuesday night’s city council meeting in which Finance Director Marilyn Rapp gave a presentation on the final budget for the 2016 fiscal year, city councilors approved the budget with a five-to-one vote of approval with City Councilor Oscar Robinson disapproving of a $20,000 donation to the local MainStreet Program.

The 2016 fiscal year began July 1.

Robinson said he did not agree with the city giving $20,000 from its general fund for the program.

City Manager Sammy Standefer admitted that funds given to the chamber of commerce and MainStreet in the past were done so through grants and not through the city’s general fund.

Standefer also said the agreement with the program is that this will be a one-time loan and nothing more, because MainStreet Director Jan Elliott plans to make the program self-sustaining by the end of the year.

Rapp said the $20,000 will be paid to MainStreet on a quarterly basis.

“Looking at how we ended the year, we’re not going to guarantee year-after-year (funding), but we are going to do some one-time funding, and we’d have to look at it next year to see if it would be available,” Rapp said.

The chamber of commerce and the Roosevelt County Community Development Corporation will be given $5,000 each by the city.

Rapp said the non-profits approached the city for the funding after the interim budget was finalized.

Standefer told councilors in a meeting at the end of May that the city would need to “tighten their belts” in the first quarter of the new fiscal year due to expenditures being expected to be higher than revenues, an issue that still exists.

Robinson pointed out that when the city previously paid a larger amount for the MainStreet manager’s salary, it was done so through lodger’s tax and not the general fund, and the manager also worked for the chamber.

Standefer and Councilor Keith Thomas said the program is worth the investment, because it benefits the quality of life in Portales.

“By investing in these groups, we are getting an investment back,” Thomas said.

City Attorney Steve Doerr also pointed out that the contractual agreement the city has to pay the money states that MainStreet has an obligation to live up to their purpose of improving quality of life.

Standefer said part of the money will help MainStreet become state certified as a MainStreet organization and the other part will go toward event venues geared towards bringing downtown Portales to life.

“We have to project the worst case scenario,” Standefer told councilors of the upcoming fiscal year budget. “But we do anticipate we’ll be OK.”

The following were other budget items highlighted during the presentation:

• Rapp said fund revenues increased slightly, transfers remain the same, fund expenditures went up slightly and beginning cash investment went up slightly, so there was an expenditures increase of $67,062 for the 2016 year.

• Rapp said the beginning cash balance went up slightly due to gross receipt taxes from construction, so the city will be starting off the fiscal year better than they thought they would. With gross receipt tax estimates being increased by 1 percent, that’s an additional revenue of $53,167. Workers compensation was also reduced by $15,000.

• She said the city has to have $736,206 in reserves, which is one-twelfth of expenditures. She said there is an unbudgeted balance of $929,857, which could be included in the budget if needed.

• Rapp said estimated revenues for the general fund for the current fiscal year are $7.3 million while estimated expenditures are $8.8 million, but the city budgets for the worse case scenario with expenses, so expenditures will likely be lower than what is budgeted due to savings on things like salaries and maintenance costs.

She said Standefer will also still be looking for ways the city can cut back or considering the possibility of not filling positions that may come open.

“It’s going to be an ongoing process throughout the year, watching expenditures and amounts and making sure we are staying within or under budget as much as possible,” Rapp said. “It’s not a bad way to end up. We just want to make sure we are not starting the next year with a really low cash balance.”

The following were things highlighted by Rapp as “general fund considerations:”

•Beginning cash and investments were $374,703 greater in the final budget than in the interim budget, which is due to a GRT construction windfall of $700,000 and a transfer from the water fund being reduced by $500,000

•The final budget still budgets to spend $908,640 of beginning cash, which is not sustainable if revenues and expenditures occur as budgeted.