Groves budget proposal includes fund balance question, tax & raise news

Published 12:17 am Thursday, August 22, 2019

GROVES — One Groves resident asked several questions about the proposed 2019-2020 city budget during the first of two required public hearings this week.

The hearings are being held due to a 0.16-cent increase in property taxes that city manager D. E. Sosa is requesting in the proposed budget. The next hearing takes place at 5:30 p.m. Sept. 5 at City Hall.

Suzanne Williamson, who ran for mayor of Groves in 2018 but dropped out during the runoff, asked the Groves City Council about results from previous audits and whether the city has taken steps to address some of the findings.

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“So I was looking over the last few years audits, and this last year in 2018 we had a negative fund balance of $423,000,” Williamson said. “What I was reading in the auditors comments was that their recommendation, based on government accounting standards, is that our city should have a 15 percent unassigned general fund balance to be a healthy city. My question is, for this year, when I was reading the summary that wasn’t addressed.”

Finance director Lamar Ozley said he wasn’t aware of a 15 percent set-aside in the budget, but the city’s financial prospects so far look good.

“This is a balanced budget and there’s been no approval from the council for a reserve account,” Ozley said. “And the goal has been, and I’ve discussed this previously with the Council, that we want to build up to it and recoup our losses from Harvey, but there isn’t a dedicated set-aside in this budget for just profit, for fund balance.”

Williamson also asked about a listing of “special items” in the financial summary for the Economic Development Corporation. Ozley broke down the items as:

— $1,000 for miscellaneous supplies

— $90,000 for grant disbursement

— $11,000 for contract services

— $175,000 in administration fees paid to the city by EDC to cover the city’s administration overhead

— $14,000 for fees and charges

— $50,000 for transfers from the EDC to fund other things.

Sosa has proposed in his budget using some of the EDC funding no longer needed to pay off debts could be used to fund the construction of a new fire station across the street from the police station.

Other highlights from the proposed budget include a 3 percent cost-of-living-adjustment for city employees, the elimination of the lowest tier entry level for new employees, which should give them a higher starting salary, an increase in water and sewage fees of about $1 per month on the average customer’s bill and the 0.16-cent property tax increase that should cost taxpayers $1.60 per $100,000 of property value a year.