Lee’s Summit is tightening its belt.
City Manager Steve Arbo is beginning work on next year’s budget for 2013-14 and is planning spending cuts of $600,000 for 2013-14 and another $600,000 the following year.
Arbo said the goal is to reduce spending so that it is in line with recurring revenue.
The cuts are necessary because of a drop in sales tax revenue and so-called “one-time” money that will not be in future budgets.
“It ain’t business as usual for next year,” said Councilmember Bob Johnson at the March 18 meeting of the City Council’s Budget Committee.
The Lee’s Summit Parks and Recreation Department in 2014 will make a final $1 million payment back to the general fund, completing its obligation for a loan to build the Gamber Center.
The city had been using those payments to balance its general fund budget. The city’s general fund is used for many of the city operations such as police, fire and administration.
The city also expects to get $180,000 in a payment from Cass County for utility taxes which were mistakenly remitted to Cass County instead of Lee’s Summit. The city this year originally budgeted about $300,000 of $900,000 owed, but the payback period changed from three years to five years.
City staff is projecting about $58 million in revenue for general fund during the next fiscal year which starts in July. The main source of general fund money is property taxes, sales taxes and utility taxes.
Under the city charter, Arbo prepares a budget and it can be accepted or adjusted by the Lee’s Summit City Council.
Johnson suggested moving expenditures for community branding out of the general fund budget to the Business and Industry Fund budget. Johnson also said because the city is reducing the general fund budget the council also needs to consider whether it can continue a $62,000 transfer from the general fund to the Business and Industry Fund. The pool of money in the Business and Industry Fund primarily comes from a tax on receipts from Lee’s Summit hotels.
It was passed to raise money for promoting economic development and is the source for allocations to the Downtown Lee’s Summit Main Street Inc. and Lee’s Summit Economic Development Council and a city tourism program run by the Lee’s Summit Chamber of Commerce.
The potential fallout could impact how much money is available for those organizations. Johnson said he didn’t have a specific proposal for levels of funding, but wanted committee members to be forewarned that there cuts will be necessary. Those discussions would start once Arbo submits his proposed spending plan later this year.
Councilmember Allan Gray, at the budget meeting, said he didn’t want to cut allocations for the Chamber, LSEDC or Downtown Main Street.
“I’m not prepared to reduce across the board,” he said.