Mayor's weekly update February 14, 2009

[cp craig]

Happy Valentine’s Day to all of the lovely ladies of Lebanon and one to my Special Valentine, my wife.

On the serious side of things now. Yes, the sales tax revenues for the City are indeed down and the City staff is working to identify cuts in their budget to address the less than forecasted revenues. These are not “fat” cuts. Those cuts were made when the 2009 budget was being put together. These are services cuts and unfortunately based upon the priorities that this City has, the first of the service cuts lie within the Cowan Civic Center. This will involve changes in operating hours and services. It will involve increases in costs to rent the facility and most likely include fees. The staff is busy putting this information together and when completed will be presented to City Council for approval. Why the Civic Center is obvious to anyone to include the casual observer. It was a loosing enterprise from the start and those costs must be reduced not only for now but for the future as well. As the staff is fully aware of the situation, I can state publically that this will also include personnel cuts. Whom that will involve has not been identified at this time nor would I publicly address that issue. I did not wish to state this fact at this time but the unplanned public release of this information forced an early disclosure prior to a fully developed plan being implemented and a full discussion with the affected staff. That is indeed a shame.

Every Department of the City has been directed to reduce budgeted expenditures for FY09 by an additional 10% for the remainder of the FY. As the staff begins putting together their FY10 budget these FY09 cuts will carrying over to the FY10 budget and based upon the actual 3rd and 4th quarter FY09 revenues may be cut even further. Those are the serious facts that are facing us. Because of these issues I have directed that the hiring of a Civic Center director be placed on hold. The reasoning is simple; this is a relatively expensive position to fill for a non-essential function. Essential positions will be filled with all other openings considered on a case-by-case basis.

Utility rate increases are going to occur. At the direction of Council, staff is currently putting together a tiered three rate increase proposal for electricity that phases in the necessary rate increases over a one year period. The City and Council are very much aware of the economic stress that our community is currently under. This approach is intended to help mitigate those rising costs. What is happening is that the electric reserve that the City has is being used to offset the increase in wholesale electricity costs to you the consumer. In effect, you are getting a rebate on your electric usage. The City can only spend down the reserve to a point though. Reserve money is required to support recapitalization of the City’s electric system as well as for emergency use. We are spending down to a point that has been established and codified by Council. This will happen over a two year time frame.

Other utilities, water and waste water (sewer) will also experience rate increases but for different reasons. While the water system is operating within its normal cost structure, the added cost of legal expenses to defend the City against the PWSD3 law suit has added expenses that have depleted the system’s cash reserves. The reserves must be rebuilt to enable the water system to remain solvent and to allow recapitalization, growth, and emergency reserves to continue. The waste water, or sewer, system is also facing pressures. Among these is compliance with the EPA and DNR settlement and other unfunded legal mandates placed upon waste water facilities by both federal and state laws and regulations. As with the water system, recapitalization, growth, and emergency reserves to continue.

These are tough economic times. As President Franklin Roosevelt said during the darkest days of the Great Depression: “The only thing we have to fear is fear itself.” Working together, this City and its citizens can make it through these tough times.

Respectfully,
CP Craig
Mayor
Lebanon, MO