City revenues still below budgeted level
• But Alva not considering any employee layoffs
October 23, 2016
“We are very closely watching sales and use tax, which has had a very large downturn from what we budgeted,” said Alva Councilmember Wes Miller. He said the finance committee, which met just before the city council’s Oct. 17 meeting, spent a lot of time talking about the revenue shortfall for this year’s budget.
Miller said Alva’s sales and use tax revenue the first three months of this budget year is down 25 percent from last year and 20 percent less than what was budgeted. It’s currently at the levels of about five years ago prior to the oil boom, comparable to 2009 to 2011 tax collections.
However, expenses are above the levels of five years ago. Health insurance, in particular, continues to rise in cost. He said the city is still doing its best to keep employees covered.
“There are cities around doing furloughs. We are not considering that at this time,” Miller said. “We’ve got other places that we can save money without having to cut personnel.”
After Miller’s report, Alva Business Manager Joe Don Dunham didn’t verbally address finances but council members received a written report. In the report, he said the city will continue to maximize all revenue streams and look closely at other sources of revenue. The city is required to provide services such as police, fire and street maintenance, which are mostly non-revenue generating. There are also quality of life items such as park and recreational services.
He said sales and use taxes account for 67 percent of the general fund revenue (which includes most of the city services) and 43 percent of Alva’s revenue overall. Like other Oklahoma cities, Alva cannot levy taxes on real estate so depends heavily on sales and use tax collected by retail businesses.
The other major revenue stream for Alva is utilities. These collections make up 97 percent of the utility authority budget and 31 percent of the overall revenue.
Since fiscal year 2014-2015, operational expenditures (personnel services, materials and supplies, and other services and charges) have increased by three percent, capital outlay purchases have increased nine percent, and debt service has increased by 36 percent.
“While this may seem bleak,” Dunham summarized, “it is important to highlight we still have companies looking to locate businesses in Alva.” He said currently Alva is working with someone wanting to locate a truck stop east of U.S. Highway 281 on U.S. Highway 64, and the city is constantly promoting Alva to other retail establishments. “There are buildings being constructed and homes being remodeled. All of these items are signs of positive growth in the Alva economy,” he concluded.
Alva Recreation Complex
Dunham updated the council on various city projects. The city is working with vendors on installation of sprinkler systems for the baseball, softball and soccer fields at the recreation complex. There could be issues with water pressure. Typically sprinkler systems require 60 pounds of pressure, and the city typically supplies only 55 pounds of pressure. Staff members are working with the water department to fix this issue.
The city is waiting on quotes from potential vendors for the construction of shade structures around the softball seating area. The expected cost is $48,000 to $75,000 plus installation.
Alva Regional Airport
The Alva airport is also working on two projects. Blue Sage Construction has started installation of the South Share Hangar drainage system. The east side is complete, and the west side was expected to be completed by the end of the week.
The quote from Shirley Dozer LLC was approved by the airport commission Oct. 11 to construct the concrete pad and ramp for the new eight-pack T-hangar. Shirley had the lowest quote at $14,223.
Business Ordinance Committee
In December 2015 the council appointed a business ordinance committee to review current business ordinances of the city. That committee met and turned in their recommendations to City Attorney Rick Cunningham so he can draft an ordinance with the changes. Once a draft is prepared, the committee will meet to make one final review before presenting the result to the city council for consideration.
OMRF Retirement Upgrades
Oklahoma Municipal Retirement Fund (OMRF) representatives met with city employees Oct. 11 and 12 about potential upgrades to the retirement plan for all employees except police and fire employees who are under a separate retirement plan.
Currently Alva has two retirement plans for these employees. Under defined contribution the employees contribute two percent and the city 2.15 percent. The defined benefit plan is a 4.59 percent city contribution.
The city has proposed moving all these retirement contributions to the defined benefit and moving to a plan one grade higher. The minimum contribution level for this plan increase is a total of nine percent but would increase employee retirement benefits by 33 percent. The percentage contribution under the new plan would be 3 percent by employees and 6.74 percent by the city. The defined contribution plan is still available for employees to use should they want to contribute more than the minimum required.
Dunham said all but three employees were in favor of the new plan. Those three, newly hired, said they preferred not to change because it wouldn’t benefit them as much. However, they all said they would go along with the new plan if that’s what the other employees chose.
Dunham said he expects this item to be on the council agenda in November to be effective on Dec. 1.
The city is working with about six property owners whose houses are in some form of dilapidated or unsecure condition. Meetings are being held to determine the owner’s plan of repair and to determine if this meets with the city code. If these meetings are unsuccessful, these properties will need to be addressed by the city and the council. Dunham said the city has $25,000 in the budget to handle the clean-up of these properties. Each property clean-up is expected to cost about $5,000. Those the city has to clean up will have the bill added to the tax bill of the property.
Alva Public Library
Dunham reported that the library has been working with someone to repair the masonry on the front of the building. The city will have to pay for materials and rent a lift for the project. The repair is expected to cost about $5,000.
The library has contacted a chimney sweep to check ductwork because it’s possible a pigeon has managed to get inside. The spot where birds have gained access has been located. After ductwork is cleared, the entry point will be covered with chicken wire.
The library was pleased to have about 50 attendees for the storybook walk which was hosted in cooperation with Northwestern Oklahoma State University. They hope to have more walks in the future.
The library book sale, featuring donated books, is still continuing.