By allowing ads to appear on this site, you support the local businesses who, in turn, support local journalism.
City headed toward hard financial times
Placeholder Image

The city of McMinnville could see financial hard times again if projected numbers remain unchanged.
A three-year budget puts revenue at $800,000 below what will be needed to begin fiscal year 2016-17.
“Now that the board has adopted the budget for fiscal year 2013-2014, I have made projections for the next two fiscal year cycles for your review and information,” said city administrator David Rutherford in a letter to board members.
According to Rutherford’s calculations:
• The city will begin fiscal year 2013-14 with $5.5 million and end with $3.7 million.
• The city will begin fiscal year 2014-15 with $3.7 million and end with $2.3 million.
• The city will begin fiscal year 2015-16 with $2.3 million and end with $1.2 million.
Rutherford says the amount is $800,000 below what is needed to begin fiscal year 2016-17.
“Remember, the city needs to have at least $2 million in fund balance to begin a new fiscal year,” he said.
Rutherford’s calculations do not include debt service for the $2 million renovation of Park Theatre, or funds for debt service for demolition or renovation of the Blue Building. No board decision has been made on either of those projects.
Rutherford also points to a deficit in the Water and Wastewater Department, with its fund balance gradually falling from $810,732 at the beginning of fiscal year 2013-14 to negative $239,419 at the end of fiscal year 2014-15 and negative $466,010 at the end of fiscal year 2015-16.
Being an enterprise system, funds to pay operational expenses come from user fees. Rutherford says user fees will have to increase.
“With regard to the water and wastewater funds, new fee schedules are being prepared to address the projected deficit for both years, as well as establishing enough funds to pay debt service on the sewer plant renovation,” he said. “The proposed fee schedule will be presented to the Water/Sewer Committee in early September 2013.”
Rutherford’s numbers also include the local option sales tax money obtained by the city from Warren County which was earmarked for capital improvements. Capital improvements proposed were renovation of Park Theatre, Gilley Pool resurfacing, and the purchase of two new firetrucks.
According to projected numbers generated by Finance Committee chairman Ken Smith, the bonds and interest for Park Theatre renovation will cost the city $159,450 in 2014, $158,949 in 2015, and $158,199 in 2016 in debt service — bringing the ending balance of 2015-16 down to $723,402.
According to Smith’s projected numbers, the combined debt service over three years, from 2014 to 2016, could cost the city between $712,103 if a Tennessee Municipal League variable rate loan is used or $726,566 if five-year capital outlay notes are used.
The numbers were calculated prior to Monday’s decision to not renew Rutherford’s contract. The letter from Rutherford to board members is dated July 24.
No meeting has been scheduled to discuss the pending deficit.