Jun 8, 2011 10:02 AM by Lauren Wilson & AP
PINEVILLE, La. (AP) - The city of Pineville is combatting
increased pension requirements by using more than $1 million in surplus funds to balance the city's operating budget.
The city's Finance Committee, which consists of the five Pineville City Council members and two citizens, met with Pineville Mayor Clarence Fields and other city employees Tuesday to discuss the budget for the 2011-12 fiscal year, which begins on July 1.
The committee unanimously recommended the nearly $14 million operating budget -- which features nearly $12.8 million in revenue and using more than $1.1 million in surplus funds -- to be voted on by the City Council at next week's meeting.
It's the second consecutive year that Pineville will dip into its surplus to cover its increased pension payments.
"We know it's going to be a challenge," Fields said. "We're very conscious and cautious of that, but we feel good about where we are."
"There are always challenges in any given budget year to address," Finance Director Mark Roberts wrote in his budget narrative. "The state-mandated increases in the pension programs have once again increased from last year."
After using more than $1 million in surplus funds for two consecutive years, the city projects to have about $1.5 million left over heading into the 2012-13 year, a level that Fields admits doesn't allow for surplus use to be sustainable moving forward.
"Our people will adjust accordingly to do business with the least possible and continue to do business," Fields said. "Hopefully, we'll be able to make up some of those funds."
Unlike other municipalities, Pineville has shown a slight increase of about 1 percent in sales tax collections, and projections for the next fiscal year are even better.
"The city projects sales taxes will slightly increase over last year," Roberts wrote. "However, they are by nature highly volatile in relation to the economy."
Roberts projected revenue to increase nearly $350,000 in the next fiscal year to nearly $12.8 million; however, projected expenses are up roughly $324,000. Nearly $220,000 of that total will go to police, fire and municipal pension payments.
Because of those increases, city employees will not receive a cost-of-living raise for the first time since 2002, Fields said. Only fire employees will receive a 2 percent raise, as mandated by state law.
"Make no bones about it, this is a business decision," Fields said. "Hopefully, as things progress, we can bring that back in."