Wednesday, March 05, 2008

City Academy, Night Two

Last night was the second class session for the 8th City Academy. The Academy is designed to give citizens a more detailed overview of the city and city workings and hopefully, encourage the students to become more involved in the city. (Expect a more detailed discussion on what is "the city" in a later post.)

The evening ended with a showing of the 2003 feature DVD on the 50th anniversary of the change to a city charter form of government. Several key players were interviewed for the program. Del Caywood, Billy Cantrell, and others shaped the direction of our fair city. While they may no longer be here, their legacy continues in Council Chambers. Louise Whall and Jerry Jacobs presented an interesting and trivia fact filled little program. If I can find an on line link to that presentation, I will post it. The link is here.

City Manager Bob Cumley briefly spoke, I thought, frankly and without prejudice on the city budget process and the difficulties contained within. He spoke of the sales tax survey and how 30% of the people surveyed were not aware the city was facing budget cuts. He said that without the requirement of the Missouri legislature that the city fully fund the police/fire pension plan in one year out of five, the city would be able to have a no growth balanced budget next year. He said the decline in sales tax revenue would be offset by a growth in fees and assessments. If a 7% budget cut was implemented, it would fund the pension for one year. It wouldn't fix it, it would just forestall the problem until next year.

(A friend of mine explained it this way: By cutting 7% of next year's budget the city can meet the actuarial recommendation required for next year, the 5.2 mil. BUT, budget cuts will not remedy the overall pension short fall issue. Every single year the actuarial recommendation will continue to increase, meaning, if they tried to meet the actuarial recommendations by cutting the budget, they'd eventually cut the government right out of existence. That is why they say budget cuts alone will not fund the pension. That is why they want an increase in sales tax revenue to fund the pension, because eventually, if they try to do it by budget cuts alone they will have to cut a higher and higher percentage of the budget (general funds) every year until there is simply no budget left to cut. Make sense now? When they talk about not being about to meet the pension fund needs by budget cuts, they aren't talking about THIS year, per se, they are talking about long term.)

The City Manager was asked how, given that Missouri has a Republican governor; a Republican controlled senate; a Republican controlled House of Representatives; most of Springfield's legislators are Republican; Springfield is a traditionally Republican area; how did such a bill get passed, much less get out of committee? Where was the city lobbyist?

Cumley's answer, in part, was that the city was told not to worry about the bill, if the city couldn't meet the one year out of five requirements, it could just go back to the legislature in five years and the legislature would give the city an extension. Cumley, to his credit, said he wasn't that trusting and was going to meet the requirements of the new law, hence the budget cuts and the sales tax feasibility study.

In response to a question from the other side of the room as to why the city is relying on sales taxes when sales taxes are going down, Cumley said that he expected this downturn in sales tax to be a momentary glitch, that sales tax revenues would increase. At a point in time in the past, Springfieldians gave up one cent of proposition C in exchange for a sales tax. That has been a good trade, he said, as long as sales tax revenues increase.

The City Manager spoke of the importance of economic development to the city. Almost all of the general revenue comes from sales tax revenue. A strong local economy equals a healthy government.

1 comment:

Jacke M. said...

"Cumley's answer, in part, was that the city was told not to worry about the bill, if the city couldn't meet the one year out of five requirements, it could just go back to the legislature in five years and the legislature would give the city an extension. Cumley, to his credit, said he wasn't that trusting...."

Anyone else notice the irony of Cumley not trusting the government??? ;)