City and CRA Budget

The Workshop was held in the City Hall Conference room last week and it was broadcast. A 53 page handout was prepared by the Finance Department and passed out to the Public at the meeting. Finance will be hiring two new employees in the coming budget—a cash investment manager and a secretary. The Audit will be finalized by the end August due to the delay of the outside auditors starting late on the process.

The City Manager said that we were $8 million behind where we wanted to be. There will be NO salary increases this year and there will be a re-alignment of staff. She will be recommending that several positions be deleted. She wants to develop a Budget and Management Office and allow Finance to concentrate on Finance.

I am not sure if the CRA Budget was discussed (I left early) but its Director, Joan Oliva was present for this meeting. Her contract already factors in a 5% raise so she will not be subject to the City government’s moratorium on raises as the CRA does not fall under the City. With the huge decrease in ad valorem this year, we have to question whether the CRA is actually costing the city money.

Susan Stanton says that what they discussed at the budget workshop will NOT be the final budget.

After looking over the proposed budget of the CRA for 2009/10 based on its latest projections of TIF, etc, they are still being as ambitious as possible even going so far as to dip into an unreserved Fund Balance for $1,558,051 and listed an expectant $500,000 from the City in order to meet their budget.

In view of personnel, office and all programs estimated to cost $3,831,900 for this coming year’s budget, it seems that the CRA will not have the money for this very aggressive budget based on Mark Bates’ suggested millage rate of 5.9999. The City Manager has already said that the city’s budget will be adjusted (which means it will probably go lower) so the CRA should be looking to cut a lot of programs, if not all.

Proposed Budget for CRA:

Cultural Redevelopment..........$700,000

Maintenance Fund Transfer......$ 25,000

Office Expenses......................$209,008

Personnel...............................$250,212

Principal & Interest..................$958,346

Program-Capital......................$507,124

Program-Grants.......................$725,000

Program-Operating..................$457,300

The above totals ..................$3,831,990.

Based on Finance's projections and the millage that was approved last week of 5.9999, the CRA will be getting $1,121,886 from the County and $1,459,563 from the City for a total revenue of $2,581,449.

The CRA says it will get the following additional revenue:
Interest $13,000
Supplement from the City of Lake Worth: $500,000
And it lists a Fund balance (what fund?) of $1,058,551

You can see by looking at the above figures that office and salaries are costing $$459,200 and principal and interest on the Gateway debt is nearly $1 million a year. So the sources of funding for the CRA are TIF funds, a small amount of interest earnings, reliance on the City giving back $500,000 to them and on top of all that, they plan on using a portion of the unreserved Fund balance to operate this budget.

Although the Cultural Redevelopment Program was rated as the TOP priority of both the CRA and the City Commission out of 20 categories, receiving 92 points out of 110 total (Commissioner Lowe was absent for that meeting), they still want to go forward with this program which will cost $700,000 this coming year, of which $210,000 is obligated under a Contract. No where on the rating list was slum and blight, the main objective of this Board. Without eradicating blight, any amount of money spent on redevelopment of a cultural destination is foolish. To me, the priorities are backwards. Clean up the neighborhoods, clean up the blight, clean up the slum, get homeowner occupancy, allow property values to rise and get the city healthy BEFORE you worry about an artist’s center in the City.

Prior to the Cultural Redevelopment Program, the top priority of the CRA was 6^th Avenue South and 10^th Avenue North beautification programs which have cost us nearly $15 million with a projected cost on 10^th Avenue North when completed of $8.8 million.

There are a handful of residents here, some of whom are rumored to be running for office this election cycle, that still believe that spending this kind of money was a good decision even though it has not met the objective and probably will not, if ever, until this economy turns completely around years from now. Obama is throwing everything at the economy to make that happen and banks are starting to free up a little of the Stimulus. To have attractive Gateways is a nice idea but come on--$15 million dollars nice?--but it still will not be any deciding factor for people to move into this city and actually live here or establish a business here. We must clean up this city first. That should have been the priority.

This has been the problem with the CRA all along as you can see. The Board has not changed its direction even during a time when its budget is down nearly in half. It still wants to go forward on development with money it does not have, rather than cleaning up what is already here.

Tonight the CRA will discuss its 2009/10 Budget.

Gee, City Commission--won't you see the light?