Kenner budget to get first public scrutiny

Kenner residents will get their first peek at Mayor Michael Yenni’s budget Monday, but at least one council member has already questioned how Yenni plans to balance the city’s books.

Budget hearings will begin at 1 p.m. Monday at the Kenner City Hall when the city’s departments begin presenting plans for fiscal year 2013-14 to the Kenner City Council. The Police Department will make its presentation first, and the proceedings could continue until Wednesday with all departments scheduled to make presentations. Kenner’s total budget is expected to be about $58 million.

However, Council Chairwoman Jeannie Black expressed some concern that Yenni is planning to cut the city’s capital projects funding in order to make up a budget shortfall. Finance Director Duke McConnell is projecting a $2 million to $2.5 million difference between operating costs and revenues, and he said the city is looking to plug that whole with capital projects money. Black has called that development troubling.

“I don’t think that’s fiscally conservative,” Black said.

Kenner’s capital projects budget is funded through a combination of gaming revenues from the Treasure Chest casino, video poker revenues, loans and grants. McConnell said that typically the city dedicates about $1.5 million to citywide capital projects, about $750,000 to each council district’s capital fund and the remainder to debt reduction.

This year, Yenni is proposing the city take the fund for citywide projects and use that to plug the operating deficit.

Yenni said he’s cut more than 130 jobs and $8 million from the city’s budget since he took office, but there is not much else to cut. Kenner’s tax revenues have been relatively flat while its expenses have steadily increased, he said. He noted new retirement costs for the Kenner Police Department as one example.

“It’s getting harder and harder to find savings in cutting departments,” Yenni said. “You have a standstill budget, but all of your expenses rise every year.”

McConnell said it’s not unusual for the city to use capital funding to assist the operating budget. However, last year, the city dipped into its reserves to the tune of $1.8 million and only used $300,000 from the capital projects budget to deal with the deficit.

Yenni said he is leery of doing that too often because reducing the fund balance below 10 percent of the operating budget could impact Kenner’s bond rating.

“It’s pretty serious, and it’s nothing new,” he said.

However, Chief Administrative Officer Mike Quigley stressed that even with the reduction in the capital projects budget, the city’s residents still will see work completed. Kenner’s council recently authorized Yenni to refinance sales tax bonds that would fund about $29 million worth of beautification projects.

In addition the city is completing $26 million in street improvements through the Paths to Progress program and is finishing up $80 million in sewer infrastructure repairs financed through a state loan.

“Even though it would be nice to keep the $1.5 million for capital, nobody can complain that this city is not embarking on some capital projects,” Quigley said.