City Leaders Agree To Restrict Spending

By David McGee
Staff Writer / Bristol Herald Courier
Published: October 6, 2008

BRISTOL, Va. – City leaders said Monday they plan to restrict spending for the next two months to avoid any possible cash flow problems.

During a joint meeting of the City Council and School Board, Mayor Jim Rector outlined the city’s position and asked school leaders to join them in some short-term conservation.

“We do not have a cash flow problem,” Rector said. “But we’re trying not to have to borrow any money between now and the first of December.”

Until two years ago, the city regularly borrowed millions to address cash flow issues before tax revenues began arriving in December. The city has avoided borrowing
from the short-term tax anticipation notes by collecting real estate taxes twice each year and reducing its capital expenditures.

“The problem is the money that comes from the state is getting delayed. They’re holding onto it longer and longer,” Rector said.

City department heads have been directed to curtail spending for any work that can be delayed until Dec. 1, Rector said.

School Board Chairman Ronald Cameron said the board would do whatever it could to work with the city.

“I don’t think it’s going to be a problem,” Cameron said after the meeting. “We understand the financial situation right now and we’ll do our part to be sure we get through it.”

City Manager Bill Dennison said the school division significantly impacts the city’s bottom line.

“Typically the school system has some of the biggest withdrawals we have,” Dennison said. “If there is any capital project or unusual item that is not pressing, if they can delay that, it will have a great effect on increasing cash flow.”

The first few months of the new fiscal year historically is a challenging time, Dennison said.

“The front end of the [fiscal] year, from July to December, is always the toughest,” Dennison said after the meeting. “The revenue stream is starting to come in and we budgeted our revenue pretty flat.”

Both sides also discussed previous and possible future cuts in state funding and school officials described their efforts to reduce consumption of fuel and electricity, in light of higher costs.

That includes reducing the time school buses sit idling, combining two bus routes into one, consolidating bus usage for athletic trips, examining field trips, changing thermostat settings and turning off lights inside empty school buildings, Superintendent Ina Danko said.

“We’re really trying to do everything to try to meet these increases head on,” Danko said.

Rector, a retired educator, joked that he remembers having similar meetings when the price of gasoline rose to 72 cents a gallon.

The district’s transportation costs have increased from about $616,000 in 2005-2006 to almost $718,000 last year, Danko told the board during its regular meeting.
The board agreed to review those costs and look for further reductions, during an upcoming work session.

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