The city has shored up its financial position this fiscal year by at least $805,000, according to a report Mayor Robert Smith presented to city councilmen Tuesday evening at the Municipal Complex.
Smith said cuts and freezes implemented earlier this year have saved the city about $329,000, while $476,000 in unbudgeted revenue — $450,000 of that in a reimbursement from the Mississippi Department of Archives and History for renovations at City Hall — has helped stem the tide of a financial crisis that seemed poised to send the city’s operating fund into debt by the end of September.
“People were saying we were broke, (but) we’re not broke,” Smith told The Dispatch after the meeting. “Our finances were lower than the previous years, but we have tightened our belt with the employees, department heads and council members as far as building our finances back.”
Columbus ran consecutive operating fund deficits exceeding $800,000 in Fiscal Years 2017 and 2018, plummeting its fund balance to roughly $2.3 million. Financial consultant Mike Crowder in March, using the city’s approved budget versus its projected spending, predicted the city would overspend that fund balance by $338,000 by the end of the fiscal year if something didn’t change.
In response, Smith, with the council’s blessing, enacted freezes on hiring and wages and upped the deductible on the employee health insurance plan (from $100 to $500). The city also opened the Municipal Court clerk’s office on Friday (normally an off-day for most city employees) and collected $26,206 in additional fines and fees.
In all, Smith reported the city has more than $7 million in its coffers, including $2.27 million in its operating fund. He said it’s still too early to tell whether the operating fund will finish the fiscal year at a deficit, but he is certain it will not be as bad as expected, or even as bad as the last two fiscal years.
“We have followed our costs savings plan and I appreciate the council for supporting me,” Smith said. “… We are in good shape. Well, we are not in good shape but financially our finances have improved a great deal.”
Councilmen were generally positive on the improved outlook.
“I am much more encouraged than I was,” Ward 6 Councilman Bill Gavin said. “We just have to continue to be diligent, but I think it’s a good start.”
Ward 5 Councilman Stephen Jones agreed but said the city still has a long way to go.
“It’s a step in the right direction,” Jones said. “Do we have more work to do? Yes, but at least we are not where we were, which is a plus. We will continue to look at ways to get more revenue and ways to cut.”
Ward 3 Councilman Charlie Box added the city needs to continue to curb its spending throughout the end of this fiscal year, Sept. 30.
“I’m excited about what we have saved,” Box said. “We’ve got to continue to watch our spending. That’s what got us into this mess. We’ve got to be careful for the rest of the year.”
City pulls out of health clinic
As a move to jumpstart savings for next year, councilmen also approved ending a contract with Baptist Medical Group for a health clinic at 2503 Fifth St. S. that has provided city employees and their dependents with free care for two years.
The move will save the city about $269,000 annually.
Columbus, along with Lowndes County and Columbus Light and Water, entered separate agreements with BMG in February 2017 to offer the clinic for employees and their dependents. The clinic is staffed with nurses, a nurse practitioner and the equipment necessary to provide services such as preventative care, physicals and educational programs along with primary care and filled prescriptions, all at no cost to the insured employees. The clinic’s aim was to help lower insurance costs for each entity, while also providing low-cost health care to the entity’s employees.
In August 2018, city council voted to cancel its contract with the clinic but ultimately agreed to another year.
With Tuesday’s vote, the city gave 60 days notice of the contract’s termination.
Box said the council wanted one more year to see if city employees took advantage of the opportunity, but since then, those numbers have stayed low.
“They’re just not supporting it,” Box said. “It’s a good benefit but it’s just not something they’re using.”
Smith said that there are 472 participants eligible to use the clinic under the city’s plan. Of those, only 88.5 per month, on average, used the service since October 2018.
“It’s a good perk, but at the same time, we are paying about $25,000 a month,” Smith said. “… Since they are not taking advantage of it, by Oct. 1 we will just cancel it.”
The city’s annual budget hearing has been scheduled for 4 p.m. Thursday in the upstairs court room at City Hall.
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