By DON O'BRIEN
Herald-Whig Staff Writer
HANNIBAL, Mo. -- A sluggish economy has forced Hannibal city leaders to look at ways to save money.
City Manager Jeff LaGarce said the city is looking to ways to trim about $800,000 from its budget during the fiscal year, which began July 1. The city already has eliminated one position and hopes to save more money by offering early retirement incentives to some employees.
"It's getting pretty serious," LaGarce said after Tuesday's Hannibal City Council meeting. "We've tried to suppress expenses and operate on lower staff levels in every department."
A city engineer position was eliminated earlier this month. LaGarce said several departments are operating below regular staffing levels. LaGarce said the Hannibal Police Department is down three people, the fire and streets departments are down two employees each, and the Engineering Department and inspectors office are down one employee each.
"I don't want to stir up employees or frighten anybody," LaGarce said. "We're just looking at doing things different. That's why we are looking at early retirements."
The council last month adopted a budget that called for $10.9 million in revenue and $10.4 million in expenses. The spending plan anticipates sales tax revenue will grow by about 2.8 percent, and property tax revenues will rise 1.5 percent.
However, LaGarce said lower than expected sales tax returns over the last six years have put a crimp in city finances. He said the downward trend started in 2008 and began to accelerate in 2010. In fiscal year 2010, which ended on June 30, 2010, the city's sales tax returns fell around $200,000 short of expectations, LaGarce said. The following year, returns again came up $200,000 short. The problem reached a low at the end of fiscal year 2013 when returns fell $550,000 short of budget.
"Out of the last six years, we've had five bad sales tax economies," LaGarce said. "Several of those bad years have been deplorably bad. What we've done is that we have staffed down to minimums. We have cut all additional expenses. We have made some good business decisions hoping that a relatively normal economy will somewhat grow us out of this."
LaGarce said the city is putting together an early retirement package tht he hopes to have ready "by the end of the summer" and is studying ways to restructure some offices.
"We're going to have to do things different," LaGarce said. "Instead of trying to thin any more than we already are, and there's nothing left to thin out, we're going to rebuild the skeleton. In areas where people are affected, we're going to be looking at early retirements. We're not looking to move anyone out."
LaGarce said it would be a "game changer" if the city can save $800,000.
"It would allow us do a couple of things," LaGarce said. "It would give us some more financial safety than we already have. When floodwaters crest at 27 feet, I would feel much more comfortable with that type of Mother Nature situation if we were in a stronger financial situation. It would also help build our reserves up, too."
The Hannibal City Council needed just 12 minutes to get through a light agenda Tuesday night. Council members approved an appropriation of $18,357 for a service agreement with the Hannibal Nutrition Center, which provides senior services like nutrition and meals, exercises, activities, crafts, health tips and guest speakers. A 10-year lease agreement with the Y Men's Club for use of a pavilion at 409 Front also was approved.