The city of Poplar Bluff could see a general fund cash reserve of less than $1 million by the end of 2018, based on figures discussed Tuesday by city council members.
This projection comes a year after city manager Mark Massingham described a possible $1.4 million cash reserve as "critical."
Council members reviewed a proposed fiscal year 2018 budget of more than $20.2 million. They are expected to vote on the document Dec. 27.
The document includes $8 million in revenues and expenses related to the construction of the second phase of Shelby Road. Spending on city operations would be around $12.2 million (see sidebar with overall and department budgets.)
While specific cash reserve figures were not discussed by the council, Massingham said during the meeting the city has additional deficits related to its health insurance fund and the Black River Coliseum. The city also owes itself for money paid to the city airport account.
"We do have a problem with our balances," Massingham acknowledged during the meeting. "Some time, at some point, we have to overcome that."
The general fund is above $5 million and looks healthy, Massingham said.
But this does not account for approximately $4 million the city owes itself from money paid to support the health insurance fund, the coliseum and the airport.
Massingham said today the city has an additional $1.1 million in an investment account set aside for the proceeds of the sale of the city's cable department.
The city sometimes takes money from the investment account and returns it the next month, but this does not happen often, Massingham said.
The city expects to see a deficit at the end of this year of approximately $238,000. This is up from a projected deficit of less than $174,000.
The city also expects to go in the red in 2018, for approximately $212,000.
It is unclear if these deficit projections include any losses in 2017 and 2018 by the health insurance fund, the coliseum or the airport.
The budget does not include a raise for employees, for the second year in a row.
The city would have about $2 million more cash on hand without the expenditures related to the nine-month term of fired city manager Heath Kaplan, Massingham estimated.
The city's one-cent sales tax is expected to see a drop in collections in 2017, about 1 percent lower than 2016 and far less than what was budgeted for the year.
Despite the drop, Massingham said, he has budgeted a 2.5 percent increase in sales tax for 2018. Figures for December are stronger than December of last year, he said.
The one-cent sales tax accounts for about $5 million of the city's estimated $12 million in revenues.
A separate, designated sales tax pays for Shelby Road construction.