The Jefferson City Budget Committee will have to find a way to offset more than $110,000 in the fiscal year 2019 proposed budget before sending it to the Jefferson City Council for approval after it set aside money to the sinking fund.
The committee on Thursday unanimously approved putting $100,000 toward the city's sinking fund, which is an emergency fund that can also finance some capital improvements.
There is a large list of capital improvements, Ward 2 Councilman Rick Mihalevich said, and he wanted funds set aside to help put a dent in that list, as well as have funds in case of emergencies.
Originally, the budget committee voted down the item 5-3 when Mihalevich suggested cutting the gap financing fund in half to from $259,000 to $129,500. He proposed transferring $100,000 to the sinking fund, as well as having $29,500 to help offset items added to the mayor-approved budget.
The city would use the money from the gap financing to help fund the first phase of possible financial gaps as the Jefferson City Housing Authority works toward condemning properties in the East Capitol Avenue urban renewal zone.
Council members Ken Hussey, Mark Schreiber, Laura Ward, Erin Wiseman and Jon Hensley voted against the motion. Mihalevich and council members Rick Prather and Carlos Graham voted in favor of the original proposal. Council members David Kemna and Ron Fitzwater were not present.
The $259,000 is "well over the amount" the city needs for gap financing, Mihalevich said. The gap financing was set at $259,000 in case the Housing Authority received very little or no money from condemned homes, city staff told the City Council earlier this year.
While they understood his concerns, council members said, they were worried it was premature to take money from that fund when the condemnation process is still progressing.
"This is an earmarked amount of money specifically to purchase and pay for litigation," Wiseman said. "We have spent a lot of money in attorney fees, and I don't want to shortchange this fund and then have to come up with this money from somewhere. I'd rather keep this earmarked for these (East) Capitol Avenue projects because I want to make sure we follow through and get this done."
Jefferson City Mayor Carrie Tergin also suggested the committee speak with the Housing Authority before it approves slashing the gap financing fund because it could put the Housing Authority in an unwanted financial situation and "send the wrong message."
Mihalevich said he spoke with members of the Jefferson City Housing Authority Board of Commissioners, adding they did not seem alarmed if the city lowered the gap financing.
"We fully intend to pay for any liability, but the question is, 'What is our liability?'" Mihalevich said. "If you estimate our liability at $259,000, that's a figure that is with zero amount of return from the buildings. That's like assuming we're going to give away the buildings. I don't believe we have this exposure, and I think we will cover our costs.
"We're sending a different message if we're not going to fund our capital improvements and replacements of the needs of the city."
Mihalevich said he plans to come back to the Budget Committee next Thursday with possible ways to offset the $100,000 added to the FY2019 budget.
In past years, the city has set aside funds for the sinking fund.
The committee also approved funding a city-wide internship program, which was a pink sheet item requested for $18,300 from the Jefferson City Human Resources Department. Those funds would pay for five interns, who would receive $8.50 per hour for eight to 10 weeks, according to the pink sheet.
The internship has been funded previously, and the city has hired past interns. However, it was not funded in the 2019 mayor-approved budget.
"I think it's a great program, as are police cars, as are all the people and everything on that piece of paper," City Administrator Steve Crowell said. "It's just a matter of trying to prioritize it with the amount of dollars that are available."
To help offset the cost of the internship, the committee approved moving $5,000 from the nondepartmental miscellaneous items fund and $5,000 from the Missouri State Penitentiary fund. The nondepartmental miscellaneous fund had $10,000 and the MSP fund had $20,000 in the mayor-approved budget prior to the transfer.
"I think it's a valuable program," Hussey said. "Maybe through a little digging, we can only fund half that and have two or three interns. It's valuable for us as a community and city to have something like this, and it's valuable for our workforce because they get that internship experience."
The Budget Committee also removed two greenway line items from the Jefferson City Parks, Recreation and Forestry department budget as these items were typos. It also approved adding a program specialist to the budget for more than $50,000.
Once the committee approves a city budget, that budget will be presented to the City Council for a vote.
The overall proposed mayor-approved budget for FY2019 is $65,681,530, with more than $32.8 million in the projected general fund revenue budget. The total budget expenses are projected at $32.8 million.