This letter was sent to Mayor Lloyd Winnecke by Stephanie Brinkerhoff-Riley via e-mail
Lloyd,
I am writing on two issues-the requested transfer and the proposed 2016 City budget.
I will vote for the transfer of $8 million in rainy day and Riverboat funds to pay bills in the general fund. I believe the purpose of the ordinance was to increase transparency in the use of funds to cover shortages in property taxes and general revenue. It was not to impede government operations. I think it’s important to understand in real time what is happening to the City’s budget due to stagnant revenue and for there to be a conversation about how the City adjusts in the long-term.
Whether the City is able to reimburse those accounts and still pay all of its bills for 2015 is a question I believe will be answered negatively. However, that is to a certain extent beyond my control and an election issue at this point. We are all well aware of the City’s ability to sit on bills that come in for the months of November and December and to get advances on 2016 revenue. I suspect the City will be able to manipulate its way into a positive number in ending the year. However, it begs the question of how healthy this system really is for the future and how stable it would be with an unforeseen economic crisis.
I do hope the conversation about revenue shortfalls that the ordinance was meant to trigger actually occurs. I know from meeting with Russ Lloyd, Jr. expenditures exceeded revenue by $5 million as of June 30th of this year. Revenue was $43 million and expenditures were $48 million. Russ told me that he expected revenue for the year in the civil budget to be $79 million. I believe the estimated revenue is high, and most of the need to transfer funds stems from chronic overspending.
The City had over $9 million in County Option Income Taxes (COIT) on January 1. 2012. Those funds have been all but eliminated in the overspending of 2012, 2013 and 2014. I do agree with Conor O’Daniel that transfers in prior administrations to cover budget shortfalls were largely covered by excess COIT funds.
Civil budget revenue over 2012 to 2014 has not kept up with expenditures. Expenditures, according to the annual reports, for 2012 were $76 million, for 2013 were $79.2 million and for 2104 were $79.5 million. Revenue has been largely flat over the three years ranging from $75 million to $76.5 million. I believe this failure to adjust to property tax caps has exhausted extra funds previously used to cover the months when property tax receipts are not available (March/April and September/October). The City typically starts getting advances on the property tax receipts at the end of April and end of October.
The problem with using Riverboat funds to float the budget at any point is these funds are all earmarked for capital projects. The 2015 budget for Riverboat funds is $13,123,156 in revenue and $13,033,410 in spending. Capital projects are affected when these funds are tied up. The same is true for current COIT funds, as the budget for 2015 is $15,560,894 in revenue and $16,879,431 in spending. The proposed budget for 2016 as to these funds is similar in that there is not much, if anything, to use for other purposes. Keeping the COIT funds that had been built up should have been a priority in managing the City’s cash flow.
I will not vote for the amended budget as present to the Finance Chairman last week, because it allows spending at a level that will not be covered with available revenue. Russ told us at a City Council meeting that revenue for the civil budget for 2016 is likely to be under $80 million. Getting to $79-80 million largely comes from an increased fee to cable companies and a higher payment request to Evansville Water and Sewer. It does not come from an increase in property tax receipts in any real amount. Although I applaud the Administrations’s efforts to find new revenue sources, we have a problem with largely stagnant revenue and the inability to keep up with the growth in fixed costs.
I cannot in good conscious vote for a budget that allows $85 million in spending. I understand the argument that the Administration will not actually spend $85 million, and mostly because the money won’t be there to spend, but the high cap is likely to mean the Administration will continue to spend more than it takes in.
In looking at labor costs as 87% of the civil budget, I can’t help but focus in on the 39-44 new employees that you have hired. Not all are full-time, but most are full-time, and all are perpetual. I confirmed this number with George Fithian this morning. You weren’t just handed an expensive government, your decisions are contributing to the problem.
My other problem with the City’s amended 2016 budget is the cut to funds for the demolition of 161 uninhabitable houses that will likely now be auctioned later this year. A group of people spent 8 months trying to break the cycle of blight perpetuated by the annual auction. The demolition cost for these homes is approximately $1 million. Even if government officials cannot agree on whether or how to land bank, we do the citizens of Evansville a disservice when we allow these homes to be auctioned.
If nothing else, I believe there are five votes on the City Council to transfer $1 million in existing Riverboat funds to demolish these houses, so that the County is auctioning lots instead of structures. The County would hopefully delay the auction to accomplish the demolitions. Like structures, 70% of vacant lots that are auctioned return to be auctioned again. However, in the meantime at least unsophisticated and unsuspecting families won’t end up renting one of these structures before it makes its way back to County ownership.
We have been reminded in the transfer debate that the City has stockpiled Riverboat funds. I think most of these funds are earmarked for capital projects, but if not, it’s a fine use of these funds to demolish this year’s crop of uninhabitable houses, as well as next year’s crop. Hopefully, down the road there will be tax credit legislation for new construction on vacant lots and the tax abatement program for investment in blighted structures allowed by Senate Bill 415 will be developed for local use.
I appreciate your time. Please let me know if you would like to discuss these issues further.
Sincerely,
Stephanie Brinkerhoff-Riley
City Council member From The 3rd Ward
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A very accurate assessment of the current financial situation of the City of Evansville. What SBR is saying is that as a responsible member of the Common Council of the City of Evansville she can no longer subsidize the Administration behavior of continued overspending that is built into the city’s proposed budgets.
This is a long overdue departure from prior years under Circuit Breaker statute. There is no quick fix or easy way around making the hard decisions on where to make the cuts to the budget. That is what being Mayor is all about, making the hard decisions. Any idiot can spend the city into bankruptcy.
How’s this look for a future, Press. The current mayor is (spending the city into bankruptcy), and if she’s elected Riecken will continue to (spend the city into bankruptcy). In fact, I don’t think either have any clue about fiscal restraint.
Just blame it on property tax caps.
What leads you to your conclusion about Gail’s plans for spending? Is it based on any fact or just your blind allegiance to the GOP?
LOL
So True. But did you not see the renderings of Hotel dining room? You’re supposed to be impressed.
$20M firkin dollars for Winnecke’s sandbox SMH
$20M to get in the buggy whip convention business while the sewers still stink.
PLEASE Evansville show this guy the door.
“I can’t help but focus in on the 39-44 new employees that you have hired. Not all are full-time, but most are full-time, and all are perpetual.”
Can anybody point me towards what positions these new employees fill? Or perhaps what departments they were added to? I presume they do not include folks hired to fill existing vacancies in existing agencies, but were newly created positions. My presumption may be wrong, however.
Assuming a rather tame $30K per year average salary, 40 new employees would indeed be significant addition to the city budget.
It is a shame that a group of people charged with coming up with the mayors Blight initiative spent 8 months being sold a bad bill of goods by the DMD to Gift the funding for demolition to the Brownfields for land banking. Yes there are problem houses related to the tax sale but there are many more, the majority, of problem houses are out there for other reasons. You can go on line and buy bum houses from a number of sources.
We need to get rid of the houses but stopping the tax sale is not the issue. Land banking and the tax sale was debated by top experts in the state legislature for more than two years and the land banking solutions failed to pass and were deemed unnecessary with the reforms in the tax sale process which are being ignored in Vanderburgh County in a conspiracy to promote funding the Brownfields.
We need demolition. With proper demolition and code enforcement there would be no need to stop the private Enterprise opportunity offered by the tax sale.
I am sorry so many people were sold a Boat that won’t Float and they are still trying to get people on board. Abandon that ship, let the private Brownfields work through the Building Commission with the Demolition funding targeting Demolition appropriated for “demolition” and used for “demolition”. Protest a gift to the private Brownfields land bank.
As always, SBR is going beyond just “due diligence” in fulfilling her responsibilities to the taxpayers. This is a clear explanation of her stance and of what the future likely holds in store for Evansville if we let the failed Mayor take another shot at killing what is left of the city. I hope everyone here sees fit to bring this letter to the attention of all of your friends and family, especially those who will be voting in the City election.
What is Ms. Mosby’s position on all this? As an unopposed candidate she will surely deal with this, whoever the mayor is. Of course, we all know she is dumb as they come and gets her opinions spoon fed to her by Ms. Mayor, but I would like for her to go on record with something other than she likes dogs.
definitely time to cross the river
Is there a way to see that this letter gets published in the local rag (CP)? There have to still be some who read it and would perhaps learn something. Thank you Stephanie for your clear and intelligent explanation of yet another problem Evansville is suffering from. Please people, wake up and smell the CSO !!!
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