Admin and Finance committee discuss upcoming budget, City Manager says coming days will be “very telling”

The Sapulpa City Council Administration and Finance Committee met in a special session on Wednesday, May 27, 2020, at City Hall and via videoconference to discuss the proposed budget for the fiscal year 2020-2021. City council members present were Vickie Beyer, Craig Henderson, Hugo Naifeh, and Mayor Lou Martin, who acts as the chairman of the committee. Also in attendance were City Attorney David Widdoes, City Manager Joan Riley, and City Finance Director Pamela Vann. 

One of the main topics of discussion was the General Fund ending balance. The General Fund is a government’s basic operating fund and accounts for everything not accounted for in another fund. The ending fund balance is considered the general fund’s unappropriated cash reserves. Riley says that Sapulpa has “always struggled with the balance not being where it needs to be.”  State guidelines say a city should maintain an unreserved (not earmarked for a specific purpose) ending fund balance of a minimum of 10% of recurring revenues. “We have improved it every year,” since she has been here, she said. “We are budgeting 4.9 percent or $369,000 this year, but we’ve been running at 2 or 3 percent for years,” so this is good news. She went on to explain that the fund balance is needed for unexpected occurrences such as the current pandemic, last year’s tornadoes, ice storms, and floods, among other things.

It is important to note that the approved budgeted ending fund balances have always been vastly lower than the actual ending fund balance. The fiscal year’s ending fund balance for 2017-2018 was $1.4 million, 2018-2019’s was estimated to be around $1.6 million, and 2019-2020’s was just over $2 million. 

Regarding funding, according to Vann, the only significantly reduced stream of revenue in this year’s proposed budget is sales tax, despite the fact that the estimated current-year sales tax numbers are coming in around $13 million, which is higher than last year’s. Riley and Vann say the next two sales tax checks from the State will be very telling, as far as how badly the pandemic has affected the city’s sales tax revenue. They say that because most of our businesses are “essential,” the shortage should not be as great as in other cities. Additionally, online sales and the multitude of medical marijuana dispensaries in town have made a significant impact in our sales tax revenue staying steady. 

Another large part of the discussion involved Beyers urging Riley to hire a dedicated Economic Development Director soon. Naifeh, Henderson, Widdoes, and Riley agreed about the necessity and benefit of having someone new fill this role (Public Works Director Steve Hardt is performing both jobs right now). Some disagreed on how soon it needed to be done, but Beyers stated, “I’d like to get started now. We have some monies [in this budget] that we can use.” Widdoes agreed that it “may be better to have someone here as a part of the process” of enacting the new bond proposals. 

Vann and Riley will tweak the budget with the committee’s suggestions and present the new version of the proposed budget at the City Council’s study session before their regular meeting (beginning at 5:30 p.m.) on Monday, June 1. The committee’s next regular meeting will be Monday, June 8, 2020, at City Hall. The final version of the budget will be up for a vote at the regular City Council meeting on June 15th. A budget must be passed by June 23, or 7 days before the end of the fiscal year on June 30.