With a banner year in terms of sales tax revenue drawing to a close, Hannibal City Manager Jeff LaGarce is proposing a budget for fiscal year 2017 that will give the City Council the opportunity to "do things" or "make improvements" that it previously could not afford.
Among the big ticket "things" the budget includes funds for:
• Street overlays, $500,000.
• Warren Barrett bridge repairs, $400,000.
• For design and reconstruction of the Grand Avenue binwall, $327,000.
• Riverfront engineering, $300,000.
• Construction of a new Huckleberry Park shelter, $100,000.
• The amount of revenue designated for building demolitions is being boosted to $85,000 from $60,000.
The proposed budget also includes $373,500 in non-annual expenses, including $75,000 for a citywide cleanup.
Under the budget, city employees will see a 4 percent pay increase.
"Neither the economy nor the consumer price index have increased by 4 percent, but the 4 percent increases will prevent employees from experiencing economic loss," said LaGarce, noting that in 2017 there will be one less pay period than in 2016, which would have meant a pay reduction of 3.88 percent. "Four percent might be considered generous in this economy, which still isn’t the best, but it’s the right thing to do."
According to the city manager, Hannibal is experiencing its second best year ever in terms of sales tax revenue. Despite this year’s success, when putting together the budget, LaGarce did not anticipate that history would repeat itself.
"In fiscal year 2017, the state of Missouri estimates a 4.3 percent increase in sales tax, yet the city’s fiscal year 2017 budget assumes zero increase in sales tax," wrote LaGarce in his budget summary. "The probability of repeating a tremendous sales tax year of this magnitude is not known, therefore we’d rather not chance it."
The city’s second largest revenue source – property taxes – was also budgeted with no increase.
"Property tax values actually plummeted in 2015," said LaGarce. "By budgeting zero increase, we are safe. If property tax revenue exceeds the budgeted figure, the city simply strengthens its financial position."
Overall, 2017’s projected budget anticipates being in the black by just under $874,000, an amount LaGarce described as "disappointing." He offered an explanation regarding why the amount isn’t larger.
"The combination of a citywide cleanup and abnormally large capital needs explain this," he said. "If only half these items were necessary, the General Fund’s operating margin would exceed $1.06 million."
Overall, LaGarce is upbeat about the proposed budget, which will receive a public hearing at 6:45 p.m. prior to the City Council’s Tuesday, June 7, meeting.
"We are becoming financially stronger each day, week, month, quarter and year. This is no accident," he said. "Our measures have been deliberate and the results are increasingly manifest. Our financial position can handle one-time costs, but adding fixed/recurring costs to the city budget is the killer."
Reach reporter Danny Henley at email@example.com