So far, we’ve taken a look at one major source of revenue to the city – sales tax, and how a downturn in economic activity can spell trouble if reserves are not adequate and/or the downturn lasts longer than reserves can cover. But by looking at the numbers related to sales tax, it’s fairly obvious that this area alone was NOT the sole cause of our current issues. So what else is there?
Over the past few years, Neosho has seen some aggressive spending for a number of capital projects. Those projects include renovations to the Civic and the Sr. Center along with a transportation package consisting of the South St. Overpass project, Howard Bush Drive extension, La-Z-Boy Drive (down by Morse Park) and Hwy 59 resurfacing.
Both the renovations and the street projects were given the go-ahead by voters and both use a sales tax to repay, over time, the principal and interest payments associated with the borrowing that provided capital for the projects. But a closer look will show that those projects wound up costing the city more than was planned, and thus became another contributing factor to the cash flow crunch the city is now experiencing.
Transportation
While the accounting gets a little complicated due to past work performed by city employees prior to the actual approval of the transportation plan, that project as a whole is still over budget. Depending on how far back you go and how you treat the city’s internal work and allocations to the project, cash outlays in excess of bond revenues already exceed $1 million. Depending on how you allocated rebates from MoDOT and the railroads once La-Z-Boy Drive is complete, that number may drop by a few hundred thousand. But that doesn’t include the projected $1 million Hwy 59 resurfacing project originally discussed as part of the transportation proposal. Nothing has been spent on that project as of the end of 2009 (and probably won’t be anytime soon based on the circumstances we face.)
Civic/Sr. Center
An easier project to analyze is the Civic/Sr. Center remodel and the costs associated with it. On paper, my math shows those two renovations, together, exceeded revenues by over $1.3 million. That’s $1.3 million that had to come from somewhere…and that somewhere is straight out of the city coffers. What Neosho wound up with is a great place to hold events (in the Civic) and a great place for our Seniors to meeting, have fun, and socialize. I’m not criticizing either project. But when budgets don’t hold and extra monies are spent above original estimates, even the best intended projects can cause trouble.
Summary
So we’re now getting closer to having a better understanding of how we got to where we are. Remember, I’ve not laid blame or criticized any specific people for their actions, but rather made an attempt to help explain to the public the how’s and why’s of our current predicament. As all of the areas start to add up, it’s not difficult to see how a cash crunch was almost inevitable.
It’s important that we all be well informed. You should know that more difficult decisions are coming in the new few weeks and months if we are to to pull out of this spiral. And while having an understanding won’t make the pain any less, I think it does offer some reassurance that the problem is manageable and a solution can be worked out.
I am confident that Neosho will recover. And I’m here to do my part, 24/7, to help ensure that happens. Hang in there, folks. We will get through this and Neosho will be better and stronger because of it.
Why not also discuss the city hall "mold remediation" project as a source of cost overruns. Seems to me that this project is a perfect example of the out of control spending that is the true reason we are in the position that we are today.
ReplyDeleteI would also point out all of the frivelous city hall positions that have been created in the past few years as a reason for the financial collapse of the city. Salaries are one area of a city budget that can quickly balloon out of control.
so what else is new?
ReplyDeleteThese are things most of us have known for months and even years and you have only scratched the surface of the problems....how about something we don't know....like who's going to be held responsible for mismanagement and why aren't there some consequences for actions?
who's spigot is going to be shut off? when are we going to get management we can trust?
What positions do you feel are 'frivolous'? And yes, the mold remediation did consume cash to the tune of $240K+.
ReplyDeleteThe first position that comes to mind is hiring someone to fill candy machines and pop machines in the city. Can you tell us what that position paid out? I would then point out that the city the size of Neosho probably did not need a person that was a media liaison, again what did that position pay out? It was pointed out in the paper by Jan Blase this morning that overstaffing was not an issue because there were 120 full-time positions with the city of Neosho in 2005 and now there are 117 after the layoffs. The key part of the sentence is after the layoff's, therefore there were numerous positions created after Jan Blase started in 2005.
ReplyDeleteDid the benefit gained by these positions outweigh all costs associated with full-time staffing?
Forgive me for being argumentative, however, more jobs are on the line and everyone is going to suffer either directly through the loss of their job or indirectly through the loss of services. I really feel strongly someone has to be held accountable.
I don't view you to be argumentative. I just wanted to verify your concern before I responded.
ReplyDeleteI appreciate your point on the vending machine. Does that position justify the cost? I don't know. I've looked into it for my business. I can go to Sam's Club, buy candies and sodas, and show on paper how I could save money. Have I done it? Nope. And the reason is that the savings it offers is so small, it won't amount to a hill of beans one way or another. I'm not going to criticize the decision to have that position because I don't know the details behind it - we could very well consume enough snacks and soda to pay for the position. . Is it a core competency of the city? Nope. It it an essential service in times of crisis. Nope. But I can't say it does or doesn't 'cost' the city.
Media liaison - full time? Can't argue that point. As a service performed by someone as part of their larger duty? I'm ok with it.
I didn't follow the city closely in 2005-2008. I will only say that a city should always monitor it's headcount and be responsible. I won't comment on if they were needed or not because I wasn't in a position to know at that time.
how about having a financial officer and an assistant financial officers when we once had one position - treasurer?
ReplyDeleteHow about paying a "ticket master" service for an auditorium that stands empty
How about (and I can't tell you their exact titles) event manager and city planner. Of the 117 out of 120 - what's the lineup per department...are we overloaded in city hall and undermanned in streets,water and sewer, maintenance, etc?
Numbers mean very little- more importantly is where those numbers are assigned...you can juggle numbers all day long - where are the bodies?
Sorry, I don't Neosho is going to be "better and stronger" by closing down my street in the middle where the RR crossing is. It's inane and ridiculous, in fact, and a whole lot of people signed a petition opposing the fact. Unfortunately, it did not do us a lot of good, did it?
ReplyDelete