Council approves budget adjustment

Wednesday, August 3, 2011

The Cassville City Council approved a mid-year budget adjustment at its regularly scheduled meeting on Aug. 1.

Darelyn Cooper, finance officer, presented the aldermen with a budget adjustment explanation report. Based on decreases in sales tax, Cooper has estimated a 2.3 percent or $36,441 decrease in revenues for the remainder of the year.

Cooper pointed out that the city is required to maintain $500,000 in designated reserves for the governmental funds, which include general, parks, streets and economic development funds. Based on the city's annual audit, $562,288 was in the reserve account.

The approved budget adjustment will reduce the city's governmental funds by $24,389, leaving the city's year-end reserve at $537,899.

The city must also maintain $360,000 in designated reserves for the enterprise funds, which include the water and sewer funds. Based on the annual audit, the city's cash reserve for those funds was $395,003.

The approved budget adjustment will reduce the enterprise funds by $141,275. The city has received approval for the use of $107,910 in COPS (certificates of participation) funding for several projects and repairs. The enterprise funds' year-end balance, with the addition of the COPS funding, will be $361,630.

"Although the budget adjustment will keep us within fund balance requirements, we have had to make several changes in the capital budget that was approved by council," said Cooper.

The aldermen originally approved $139,275 for capital projects. The budget adjustment reduces that amount by $53,093 to offset additional costs for operations.

"Fortunately, some of the capital that was to be funded from city funds qualified under the COPS program," said Cooper.

Those projects included the wastewater treatment plant catwalk, an $8,550.35 expense, a V-gate, which is estimated to cost $1,200, and a diversion box, which is estimated to cost $2,000. The V-gate and diversion box have not been purchased yet.

Other capital projects were funded by COPS funds due to emergency situations. Those projects included the well #2 renovation, a $53,676.50 expense, and the digester aerator pump at the wastewater treatment plant, which has been received but not yet paid for. The pump will cost $26,055.

"Without the COPS funding, we would not have had the funds to respond to these emergencies," said Cooper.

Cooper expects the city to re-evaluate the budget again during the third quarter of the year. At that time, the funds may need to be reduced once more. Currently, the city can only utilize $37,899 from the governmental funds reserve and $1,630 from the enterprise funds cash reserve.

"The budget is tight," said Cooper. "That is why we are looking at the (water and sewer) rate changes right now."

The aldermen also received an updated water and wastewater rate analysis report.

The first report released by the Missouri Rural Water Association stated that the city's current basic water rate is set at $10.27 and includes the first 1,000 gallons of water. The rate including the first 1,000 gallons of water is actually $12.07.

The report also stated that the current basic wastewater rate is set at $8.09, including the first 1,000 gallons. The rate including the first 1,000 gallons of water is actually $11.01.

In other business, the Cassville City Council:

* Approved the first reading of an ordinance that will change the deposit requirements for establishing utility services.

* Heard the administrator's update report.

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