Spending outpaces city’s revenue
DENHAM SPRINGS — For the fourth year in a row, the city spent more last year from its governmental funds than it took in, records show.
By the end of the last fiscal year, the balance of the general fund, which is the main fund for governmental operations, dropped to its lowest level since 2005, according to the city’s records.
For several years, the city has faced lower sales tax receipts but has continued to spend to make needed infrastructure improvements, Clarence Speed, the city treasurer, said when asked about expenditures and the drop in the general fund balance.
Expenses included engineering work for roadways that will be improved with state and federal dollars, which far exceed the city’s cost of hiring an engineer, Speed said.
In the fiscal year that ended June 30, the city spent $11.2 million from its governmental funds, which had less than $10.8 million in revenue, according to city records.
Revenue for the last fiscal year increased $451,432 from the previous year, but expenditures increased $717,553.
The amount of expenditures above revenue was $438,959 for the last fiscal year. The previous year the city spent $172,838 more than it received in revenue for its governmental funds.
In the two years before that, the city’s spending from governmental funds exceeded revenue by $549,343 and $2.1 million respectively, city records show. The general fund balance, which peaked at $4.8 million in 2007, dropped to $2.7 million in 2011.
Denham Springs has faced not only an economic downturn that affected sales taxes, but also has been hit with ever increasing contribution requirements by state retirement funds for police officers and firefighters, Mayor Jimmy Durbin said when asked about the numbers.
Indeed, city financial records show the general fund contribution to employee retirement rose $353,409 to a total of $941,456 during the last fiscal year. All but $3,320 of that amount went to the state retirement funds for police officers and firefighters.
Though the city hasn’t been able to provide its traditional cost-of-living raises in recent years, it has avoided layoffs, the mayor said.
“We’ve done a good job of milking every dollar we have,” he said.
The focus of the administration has been “the long-term well-being of the city,” Durbin said.
Continued positive steps have included raising the rating of the Fire Department from a Class 3 to a Class 2, the mayor said.
The city has continued to pay for engineering work on major road projects because that work will reap large benefits in state and federal dollars for connector roads, he said.
Durbin said he sees help on the horizon in terms of increased sales tax revenues. Sales tax revenues made up 62 percent of the city’s general fund revenues during the last fiscal year.
A Sam’s Club store, which is currently under construction, will add about $30,000 a month in sales taxes to the city’s coffers when that business opens this year, he said.
Development planned south of the Bass Pro shopping center should also bring in additional taxes, Durbin said.
Even before the arrival of those businesses, the city’s sales tax collections have increased over the last four months, according to parish records.
Though the current fiscal year started with two negative months of sales tax receipts, collections have increased by 4 percent when compared to the same time last year.
“We just have to hang in there,” Durbin said of the financial situation.