The Manchester Board of Mayor and Aldermen discussed on Jan. 5 a resolution regarding the spending freeze for the city. When the budget for Fiscal Year 2020-2021 was approved several months ago, BOMA implemented a spending freeze. The board decided on Jan. 5 to continue with the freeze and pay half of the amount to nonprofits. The city contributes usually about $64,000 per year for local nonprofits. This vote means the city will now pay half of that amount and revisit the issue again.
Digging deeper into reserves
At the beginning of the fiscal year, the city planned to use about $1.9 million from its reserves.
“We will be moving from approximately $1.9 million to $2.4 or $2.5 million possibly coming out of reserves,” said Manchester City Finance Director Bridget Anderson. “We started the year with over $6 million in reserves.”
Anderson brought to the attention of members of BOMA several issues they need to consider when making budget decisions.
“We were already, as of the budget amendment, going to be using those $1.9 million out of reserves to supplement this budget year,” Anderson said. “We are going to be adding more money to that due to the conference center.”
$250K for conference center
BOMA voted Nov. 3 to enter into a new agreement with Coffee County regarding the Manchester-Coffee County Conference Center. Under the new contract, the city would absorb all operating costs associated with the center, an amount that would likely add $250,000 to the initially approved $145,ooo.
Previously, the city and county equally shared the deficit of the conference center.
The new agreement means that the city will cover the full amount for the losses for January-June, the last six months of Fiscal Year 2020-2021.
“(The city will pay the full amount) for the last six months because the city will be taking all of the (expenses),” Anderson said. “That’s possibly $250,000 more that would need to come out of reserves.”
Debt payments will add to the expenses of the city, as well.
“This year, we are paying a little bit more on the debt payment,” Anderson said. “Next year, it will decrease. And we have the College Street project. Those two combined (would add) $40,000. That amount would also have to come out of reserves.”
The renovation of College Street Elementary is a $4.1 million joint venture funded by the school system and the city.
The city will likely have to allocate additional funds for the Manchester Recreation Department.
“I’m concerned with the recreation center,” Anderson said. “With them being shut down and not being able to have full capacity, I am concerned we may have to supplement the rec. renter more from the general fund, or they will have to go in the negative.”
The debt payments, conference center and the recreation center “are my concerns,” said Anderson.
“If there’s a possibility of taking $500,000 or $600,000 more out of reserves, we will be moving from approximately $1.9 to $2.4 or $2.5 possibly coming out of reserves,” Anderson said.
Additionally, the city coffers will see a loss because Unity Medical Center will no longer pay property taxes.
One of the outcomes of Unity Medical Center converting to a nonprofit in 2019 is that the hospital will no longer pay property taxes to Manchester City and Coffee County, an amount of more than $100,000 per year.