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<br />The manager began immediately to review the financial condition of the City with the help of the finance director,
<br />Everything came under scrutiny. Every revenue source, expenditure, expense, transfer, receivable, payable, and
<br />reserve were reviewed along with contracts and other documents. Among the things found by the manager were the
<br />following:
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<br />1. The tax rate had grown form 47 cents per $100 valuation in 1983-84 to 69.5 cents per $100 valuation in
<br />2003-2004.
<br />2. The City had $45,855,000 in outstanding debt of which $31,512,400 was supported by enterprise revenues
<br />and $14,342,600 was supported by property taxes amounting to 11.248 cents of the 69.225 cent tax rate for
<br />2004-2005.
<br />3. The number of full-time city employees during this same period had risen from 242 to 366.
<br />4. In the last 10 years, sanitation collection had gone from making a $563,097 profit to having a $54,760 loss.
<br />5. Between the years 2001 and 2004, the City expenses exceeded City revenues by $4,478,546.
<br />6. At the end of fiscal year 2003-2004, the water and sewer operating fund was overdrawn by $2,397,610 and
<br />the insurance trust fund was overdrawn by $688,379 in the City's pooled cash account.
<br />7. The City had annexed areas in the late 1990's that were straining its resources to provide services.
<br />8. Inadequate expenditures/expenses have been made on infrastructure items such as streets, water lines, and
<br />sewer lines.
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<br />In mid-February 2005, the city manager gave a presentation to the City Council and the public on the fmancial
<br />condition of the City of Paris using the audited fmancial statements found in the 2003-04 Comprehensive Annual
<br />Financial Report. In the February 15, 2005, issue of the Paris News, the city manager wrote a guest column
<br />summarizing his previous night's presentation to the Council. His column reads as follows:
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<br />"Last night, February 14, the City Council received a presentation from McClanahan and Holmes LLP (certified
<br />public accountants) concerning the audit report for the fiscal year that ended September 30, 2004. At the conclusion
<br />of that report, I presented to the Council the status of the City of Paris' fmancial condition using the independent
<br />audit report as the source of my information. Today I would like to repeat for you a portion of that presentation in
<br />this column.
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<br />For the year ending September 30, 2004, the total revenue for all city government funds was $22,928,420. During
<br />that same period, total government expenses were $26,480,185. By use of other financial sources the 2004 year's net
<br />fund balance loss was reduced to $2,229,197. Additionally at the end of the fiscal year (September 30, 2004) the
<br />water and sewer operating fund is overdrawn by $2,307,610 in the city's pooled cash account. The insurance trust
<br />fund is also overdrawn by $688,379 in the city's pooled cash account.
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<br />The statistical section of the report gives a 1O-year history of the city's government-wide revenues and expenditures.
<br />Three of the past four years this city has had more expenses than revenue. Since the year ending September 30,
<br />2000, this city has spent $4,478,546 more than it has taken in revenue and other interfund transactions.
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<br />Thankfully, the City Council recognized this problem last summer and began the process of reducing expenses for
<br />the City through the adoption of the current year's city budget, but we must do more.
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<br />No individual, business or local government can survive by consistently spending more than they earn. To correct
<br />the problem, we either raise our income or reduce our expenses.
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<br />I am putting together a plan for the Paris City Council, which will reduce city expenditures. I believe it is my duty to
<br />propose a solution that will correct the problem as opposed to delay the inevitable.
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<br />Regrettably, I believe this city needs to be spending significant money on items we have been deferring. Weare, in
<br />my opinion, not doing an adequate job of maintaining our public streets, water mains, sewer mains or our fleet of
<br />vehicles. We need to remove more dilapidated structures to improve the appearance of this community, and we need
<br />to secure the remaining water in Pat Mayse Lake to protect our future. I also ftrmly believe our city tax rate is
<br />already too high to keep Paris competitive for new business development.
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<br />On February 28, I will present to the City Council the framework of my plan to reduce City expenses.
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