City’s first quarter better than expected
By Joey Berlin
Originally published 01:22 p.m., April 24, 2008
Updated 01:22 p.m., April 24, 2008
It’s still early in the year, but now that the first quarter of 2008 is over, the city has a clearer picture of the impact of the Tyson plant layoffs and restructuring. So far, the numbers say the blow has been relatively soft, leading the city to re-estimate how much revenue it may lose.
City Manager Matt Zimmerman and the city commission reviewed updated Tyson impact projections at Wednesday morning’s study session. Zimmerman used the first-quarter data to make the new projections. He compared them to an earlier analysis based on an economic model set up by Emporia State economics professor Rob Catlett, who estimated there would be about a 10 percent impact on economic activity in Lyon County as a result of the January layoffs. The new financial impact numbers are still seen as a worst-case scenario.
“As you can see overall, the numbers are less impactful than the first analysis mainly because our first quarter was very good,” Zimmerman told the commission. “Our sales tax, for example, was 6.6 percent higher than they were last year. So if the impact is only nine months of that, the overall impact is going to be (significantly lower). Even if there’s a 10 percent reduction in actual ’07 to actual ’08, the numbers are still less impactful than we originally thought ... just because we had a very good first quarter.”
In documents Zimmerman provided to the commission to update itemized changes to the city budget, the total impact on the city’s general fund was measured at $605,491, lower than the original estimate.
The city’s water collection revenues were one of the primary concerns following the Tyson announcement, because the Tyson plant was responsible for about 20 percent of the city’s water collection. The city originally estimated an impact of about $767,000 on the city’s annual water collection. But the water collection numbers thus far for 2008 put the city on a pace for a significantly lesser loss at around $630,000. However, since water collection fell by 25 percent in the month of March, city staff elected to leave the $767,000 number in place as a worst-case scenario preparation.
One unexpected revenue source for the city thus far came in ambulance charges. Zimmerman said ambulance runs are up significantly, leading to more billing and a projected surplus in ambulance charges for the current fiscal year.
However, with only three months worth of 2008 data in the books, Zimmerman said the city’s revenue situation needs to continue being monitored.
“Particularly in the second quarter of the fiscal year, because we know the (Tyson) employees were (paid) through (March 25),” he said. “So ... a heavy impact’s going to start happening in April and May, when there’s less money available for purchases of certain things — gasoline, groceries, all those kinds of things.”
Zimmerman plans to update the impact of the Tyson situation every three months, which would slate the next report for July.
“I think the first of June, we’ll see the shift of what happens, with kids getting out of school and people wanting to move or whatever,” Commissioner Kevin Nelson said. “That’ll tell a lot for our July report.”
Commissioner Jim Kessler said he was optimistic that the impact wasn’t projected to be as great as originally thought.
“Just the feedback that I get from people — of course, it’s still early — but just the feedback from business and people, nobody’s feeling (it) just yet,” he said. “And maybe it is still too early ... I think we still need to keep these kind of figures.”
Police Chief Gary Smith and Fire Chief Jack Taylor were in attendance at the work session. One of the worst-case scenario possibilities that Zimmerman had warned about previously was that the city might see a crime spike as a result of the Tyson announcement. Kessler asked Smith how the crime rate shaped up for the first quarter. Smith, who started his job in January, said he’d been told the crime rate was “pretty consistent with what it’s been the last couple of years.” With the weather warming up, Smith said, there was more activity going on, so the department would have a better idea of the crime situation within a month or so.
In other activity Wednesday, the commission:
F Reviewed the second draft of the proposed capital improvement plan for 2009-2013. The newest draft had several projects removed, bringing the five-year total down more than $2 million to $45,261,283.
F Discussed a proposal from the Emporia Recreation Commission for a governance agreement with the city, which the rec commission has never had. The rec commission’s preferred proposal features the recreation director being contracted with both the ERC and the city and reporting to the city manager. The commission leaned toward talking to the rec commission about a model that would put all parks and recreation operations under either the ERC or the city.
F Reviewed changes to a proposed ordinance that would create an accessibility advisory committee. The city’s Americans with Disabilities Act coordinator would serve as the liaison between the committee and the city commission.
F Reviewed the city’s updated park plan. The park plan was last reviewed in 2001. Commissioner Kevin Nelson initiated a discussion about the city look at whether Emporia has too many parks. Agler said Nelson had a point, and the city needed to find out what the utilization was of each park. Assistant City Manager Mark McAnarney said he would try to come up with some data on the parks.