The following is a letter written by City of Blytheville Finance Director John Callens to Mayor James Sanders and the Blytheville City Council.
Dear Mayor and City Council,
I want to address the misinformation that has been being written in the paper, and on social media, regarding the budget and its process by Councilman Abbott. Several accusations have been made which insult the integrity of the Finance Office, and myself, as Finance Director. Since the Mayor and I have begun the budget process this year there has been one Councilmember who has tried everything possible to discredit what we are trying to accomplish. If this was not such a serious issue it would be almost comical. We have been continuously accused of political grand standing, trying to spin the information... etc. Whenever I evaluate an issue, I try to see who has the most to gain from providing misinformation. For one, I am in no way politically motivated. The Mayor was just re-elected a year ago and has a long time before he has to worry about re-election. On the other hand, let's take a look at Councilman Tommy Abbott.
He has lost two consecutive elections to the Mayor, is coming up for re-election in 2016, and was removed as chair of the Finance Committee. It appears he thinks that his removal was a political move. I know for a fact the true reason is because of how bad he screwed up the 2014 budget and his total lack of understanding regarding the budgeting process. It is clear to me who would be more strongly motivated to provide misinformation.
I want to begin at the start of the budgeting process. When the Mayor and I started the budget this year, we decided to get the City Council involved earlier than required. This was done because so many changes were going to be necessary. We wanted to get everyone's input. Councilman Abbott has stated several times how the Council should be notified of all major decisions as early as possible. When we gave the working budget to the City Council early, Councilman Abbott stated on social media that this was political grandstanding and we did not need to do this when he was the finance chair.
After meeting with the Council several times, and with two civic groups, the Mayor and I turned in a balanced proposed budget. Since that time Councilman Abbott has again stated how we are trying to deceive the public and spin the information. All during this process Councilman Abbott has been at each of the finance meetings, but has never given any substantial information or ideas on how we could improve the budget.
The only thing he has done is write his disgruntled comments to the Editor and post them on Facebook. If he is truly for the betterment of Blytheville, shouldn't he state what his ideas are in a meeting before he tries to smear this office with misinformation? Councilman Abbott continues to grandstand instead of address the issues at hand. After speaking with two civic groups, and all the Councilmembers, the consensus is that major financial changes are necessary in order for the city to become financially sound. The only individual out of this whole group that states we don't need to make immediate drastic changes is Councilman Abbott. Granted, we have not all agreed on exactly what those changes should be, but at least everyone sees the need for immediate change and has participated in the process...except for Councilman Abbott.
Here are several questions I would like to have Councilman Abbott address:
1. Why did you pass a budget in 2014 with a $1,900,000 deficit in the General Fund and not say anything about it? Did you do it intentionally and try to cover it up or did you just not know what you were doing? This set the city up for financial failure in the year of 2014, and if this office had not made some major adjustments to account for the huge shortfall, it would have been a disaster. If anyone would like a detailed explanation of this, I will gladly provide it and provide all supporting documents.
2. How can you say there has been no major change in the budget since 2014? We have had to start paying approximately $440,000 a year to the State of Arkansas for back sales taxes. We are now paying $180, 000 a year in current sales taxes that were not being paid when you created the 2014 budget. Our tax revenue is going to be down approximately $200,000 from 2014 and we are putting back an additional $180,000 per year for past jail fees. It also appears that the golf course revenue will be down approximately $30,000 since 2014. This alone accounts for more than $1,000,000 in changes since 2014.
3. Do you not understand why the budget increased from 2014 to 2015? The increase in the budget from 2014 to 2015 was mainly due to several capital expenditures. For example, $400,000 fire truck, increase in wastewater improvements totaling $550,000 and an increase in water improvements totaling $350,000. Also we began paying the back sales taxes, and we budgeted $480,000 to cover that. As you can see, the increase was not due to more personnel or spending money frivolously.
4. Why do you think cutting non-filled positions is a means of deception? The budget is supposed to be, to the best of our ability, what we foresee to be needed and what we can afford for the coming year. Also, there are 38 active police officers not 35. Which means it is very important for the Police Chief to know exactly how many budgeted positions he has, filled or unfilled.
5. Why will it cost $200,000 a year for 2 years to close the golf course? I am at a total loss on this one, unless Councilman Abbott is alluding to the lease agreements on the golf carts and mowing equipment. The yearly cost on those leases is slightly less than $100,000 a year. I have no clue where the rest of the $200,000 is coming from. As far as the lease agreements go, we have spoken with the Arkansas Municipal League and our City Attorney and they both stated they felt we could get out of the contracts due to the non-appropriation clause in the lease agreements.
6. Do you truly understand the water and sewer process? Arkansas law states that no money can be transferred from water or sewer to finance the city, until all needs are met for each of those departments. You CAN'T cut necessary expenditures or raise rates in these departments to finance the city. Nobody from this office in any way form or fashion has suggested that these departments should not run as efficiently as possible. If you notice in the proposed budget we have decreased their combined budgets by approximately $700,000 from last year.
7. How can you not understand the need to pass the budget by December 31st? It has nothing to with whether or not we are "adults". The reason the budget needs to be passed by December 31st is because the 2015 budget expires on the 31st of December. Whatever is being spent in January are unappropriated funds. I know you can legally wait until January 31st. This year, if we have to eliminate several employee positions and we wait until February to pass the budget, we will be over by approximately $60,000 in employee payroll, due to those eliminated positions not being budgeted. There would potentially be a need to make adjustments for that at a later date. Again, if you would like further information on why this is a good idea you can call the Arkansas Municipal League for a more in depth explanation.
There are a couple of employees in this office who have worked for the City of Blytheville since Joe Gude was Mayor. I have heard them state, on more than one occasion, that this office is running more efficiently than it ever has since they have been here. Before I came they were behind on most all payments and struggled each pay period with how they would make payroll. This all goes back to the $1.9 million deficit in the general fund that Councilman Abbott budgeted in 2014. Everything starts with the budgeting process. If you do not have an accurate budget that truly reflects what you expect to incur in the coming year, it will truly make the year a "fiasco". We have tried to make the budget much more detailed than in the past so the Council and the public can see the needs and shortfalls within each separate fund. This is something that has not been done in the past.
Councilman Abbott has not been in my office in over a year to ask any questions about any aspects of our current or future financial position. All five of the other Councilman come in my office regularly to get updates and ask specific questions. It amazes me how he knows more than anyone else when he has not asked a single question in over a year. If Councilman Abbott really has some ideas to improve the budget I would love to hear them. This process is supposed to be both the Mayor's Office and the Council working together. It shouldn't be one person running out to social media and the newspaper making wild accusations before they even bring any of their concerns before the Council or the Mayor's Office. As I stated before, I will meet with Councilman Abbott at anytime, anywhere, and anyplace to discuss his ideas and concerns over the budget. When we do discuss this budget we will need to deal only with real figures and no more political double talk. We can call Courier News and make sure they are there, so everything will be documented like Councilman Abbott likes to do.
-- John Callens
City of Blytheville Finance Director