Forecast for uncertain times: Morgan City Council gets look at budget

Morgan City Mayor Frank “Boo” Grizzaffi presented the proposed operating and capital budget to the city council for the 2021 fiscal year during Tuesday’s council meeting. The budget proposal includes nearly $39 million in proposed revenues and roughly the same in expenditures.
Both revenues and expenditures are projected to be lower for the coming year, while Grizzaffi said in his annual budget message that there will be no major capital expenditures included to allow the new administration to make decisions “based on real-time economics.”
The election for Morgan City Mayor will be Nov. 3. The city council will meet Nov. 4 at 4 p.m. for its annual budget workshop.
The new fiscal year begins Jan. 1.
“Preparing a budget for a full-service city has its share of challenges,” Grizzaffi said. “Doing so in the midst of an economic shutdown multiplies that uncertainty. It is impossible to anticipate the depth and long-term effects this crisis will have on revenue; however, a conservative approach to budgeting will allow for cautious optimism.”
Grizzaffi said COVID-19 has greatly impacted the city’s revenue source at Lake End Parkway, where revenues have fallen $200,000.
“This reduction is solely from the shutdown of the cabins and camping directly due to COVID-19 restrictions,” he said.
Another revenue source, the city jail, also has been affected by COVID-19 as the prison count has dropped to “unprecedented numbers,” Grizzaffi said.
“There has been a slow rise in inmate population; however, the current capacity is nowhere near a population for the jail to be self-sufficient,” the mayor said.
Grizzaffi said both funds will have to be balanced with a transfer from the general fund.
As for revenues, the city is proposing about $38.98 million, down $1.71 million from this year’s budget. The budget is expected to have a general fund ending balance of $981,668, with sales and occupational taxes remaining neutral at $7.49 million, while much of the city’s revenues will come from utility operations, where $24.73 million are expected to be generated.
As for expenditures, the city is projecting about $39 million, or $868,986 less than the current budget.
Health insurance costs continue to be a challenge for the city as they have risen more than $1.8 million, Grizzaffi said.
Another notable expenditure in the upcoming budget is the city’s 2% longevity raise for every employee that fulfills their one-year anniversary. That will cost the city $145,360.
The budget introduction Tuesday was the first reading of the 2021 budget ordinance.
In other financial matters Tuesday, the council approved its monthly financial statements for the period ending Aug. 31. The General and Ancillary Funds had a favorable variance of $680,000 compared to the current budget, while the Utility Fund had an unfavorable variance of $317,800. The Sanitation and Sewer Fund had a favorable variance of $178,800.
In other news, the council:
—Approved resolutions for Red Ribbon Week, the Louisiana Municipal Water Pollution Prevention Report and declaring the results of the special election on Aug. 15 for the renewal of the 2-mill property tax for operations and maintenance for the Morgan City Municipal Auditorium.
—Observed a moment of silence in a resolution of respect for James O’Neal “Coach Jimmy” Johnson Sr.
—Heard from Bo Duhé, candidate for re-election for 16th Judicial District attorney, and Kevin Voisin, candidate for Morgan City mayor.