Poplar Bluff city audit shows shrinking cash, need for cuts

A 2019 audit of Poplar Bluff finances paints an uncomfortable picture of the city’s general fund.

This is the primary account that covers most governmental operations, including fire, police, street and city hall expenses. It also serves as the ‘lender’ for other funds, including the Black River Coliseum, municipal airport and health insurance fund.

__Shrinking cash on hand__

The city ended 2019 with $237,016 in cash on hand in the general fund, according to audit documents reviewed Monday by city council members. In December 2016, now retired city manager Mark Massingham described a cash balance at the time of $1.4 million as a “critical level.”

Massingham has urged the council each year since to consider budget cuts, including through personnel reductions.

In 2016, the council cut four of the six positions recommended.

In 2020, the city has instituted a hiring freeze that will leave six positions open, and reduces hours for other staff at the BRC and Margaret Harwell Art Museum.

The city ended 2018 with a general fund cash balance of just under $300,000, previous audit documents show. It had just under $1.4 million in cash left at the end of 2017.

__Dipping into the red__

Poplar Bluff’s expenses in 2019 exceeded revenues by $1,051,469.

It is expected to be in the black in 2020, with Monday night’s budget cuts, new city manager Matt Winters said. The majority of the cuts are paid for by a hiring freeze. City expenses were nearly $13.2 million in total in 2019, city documents show.

City expenses were in the red in 2018 by about $995,000, according to previous audit documents, and by approximately $989,000 in 2017. Massingham previously has told city council members these deficits come from core reoccurring expenses, such as personnel costs.

__Hard decisions, difficult cuts__

General fund spending in 2019 was broken down among major categories (figures approximate): police and fire services, 59% — $7.7 million ; general governmental expenses (including city hall operations, and transfers to other funds), 19% — $2.5 million; and street, cemetery and motor pool, 15% — $2 million. The remaining 7% included capital outlay and expenses related to culture and recreation.

Massingham has said close to 80% of all general fund spending pays for salary and benefits of employees.

Within the general fund, general government costs (city hall salaries, support for other funds) have saw a small shift upward since 2017, by a little over $200,000.

Police/fire expenses, as well as the street/cemetery/motor pool costs have each gone down by at least $60,000 since 2017.

In 2016, for example, city council members cut one of two police department positions on the table at that time. In 2020, the street department has one full-time and three part-time positions that will not be filled. The fire department has operated for many years without an assistant fire chief.

__Revenues__

City revenues in the general fund in 2019 included sales tax collections of almost $5.4 million. Other significant revenues include (approximate): property tax collections, $1.4 million; licenses and permits, $3 million; and special revenues, $825,200.

Sales tax was down slightly from 2018, when collections were closer to $5.5 million.

Poplar Bluff received more than $890,000 in grant income in 2019. Grant-funded projects included replacement of a South 11th Street bridge near new manufacturer Empire Comfort Systems.

Grant income was up from 2018, when the city received just over $600,000 from state and federal programs.