Minutes 11/28/1978 - Laserfiche WebLink

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~ "'.' 0 -I...l .1 TUESDAY NOVEMBER 28~ 1978 pay for operating expenses. City Council reworked Mr. Noland's proposal, and balanced this year's budget by only using $344,999 of the projected $719,839 General Fund surplus to pay for operating expenses~ leaving $374,840 in surplus. It now appears that the year end, June 30, 1979 General Fund surplus will be $931,816. There are two reasons for this: 1. The audited June 30, 1978 General Fund surplus was $1,012,007 -- $292,168 more than Mr. Yeaman's estimate of $719,839. 2. Mr. Yeaman's current year-end projections, based on the first quarter actual results~ show that revenues will be $169~326 more~ and expenses $95~482 less than budgeted. If these estimates hold, $264,808 will be added to the year-end General Fund surplus. To summarize: General Fund surplus, June 30~ 1978 as per Audit Less: Surplus used to balance this year's budget Plus: Estimated addition to surplus this year . $1~012~007 . . .. 344,999 . + 264,808 Equals: Estimated General Fund surplus at June 30, 1979 . $ 931,816 I feel that council should rebate $190,096 of this surplus to the taxpayers for the following reasons: (1) Council has asked for tax increases in the past when we felt they were needed. Now~ I think we are in a position to give some of the money back. If Mr. Yeaman's estimates of this year's revenues and expenses hold, and we rebate $190,096~ we should still end the year with a General Fund surplus in excess of $700,OOO~ and I feel this is an adequate amount to guard against contingencies and take care of anticipated capital expenditures. (2) I think that a rebate of surplus makes good fiscal sense; conversely, I think it would be a mistake to use the surplus to pay for operating expenses and lower the tax rate. I feel that the proper way to balance a budget is for operating revenues to be equal with operating expenses each year; that is, to fund each year on a pay-as- you-go basis, which the City is now doing. I do not think it would be fiscally responsible for us to use the General Fund surplus to pay for operating expenses and lower the tax rate because a surplus may not continue year-after-year. And when the year comes that the surplus is gone~ the citizens may face a staggering increase in taxes or cuts in services. This happened to our City in 1975 when real estate and machinery-and-tool taxes soared and services were cut. I do want to make clear that the rebate is from General Fund surplus accumulated from the past four year's performance of the City. The fact that we can afford to give a rebate now should not be interperted to mean that we are necessarily in a position to balance next year's budget without a tax increase or cuts in expenses. It is still too early to make any predictions about next year.