Martinsville Bulletin: City council, local officials outline impact of budget decisions

April 26, 2017

MARTINSVILLE – The city can’t afford to continue dipping into its reserves to satisfy the funding requests of city departments and outside agencies, officials maintain.

But that is what Martinsville City Council did Tuesday night in voting to level fund the city’s schools and police and fire departments, which were proposed for cuts, as well as give Henry-Martinsville Social Services and Piedmont Arts all of the money they sought for the new fiscal year that will start July 1.

About $360,000 from city utilities’ reserves will be used to cover those actions, city Finance Director Linda Conover said Wednesday. Money that customers pay for services such as electricity, water, sewer and trash collection is used not only to support those utilities, but also other city operations as needed.

 Echoing a comment he made during a previous meeting, City Manager Leon Towarnicki told council members Tuesday night that he firmly believes city finances are sound.

“If everything falls apart,” Towarnicki said, such as a large emergency expense occurring, “we have enough money (to keep the city operating) … until things stabilize.”

Yet the more money that is taken from the reserves, “the closer the cart gets to the cliff,” he said.

Dipping further into the reserves this year “will impact what we do next year” in preparing the fiscal 2019 budget, Towarnicki said.

The city has dipped into its reserves to balance its annual budgets in recent years. It has seen little to no growth in revenues as operating expenses have increased. Officials expect the trend to continue.

This year, “we went right up to the cliff and looked over (it),” said Mayor Gene Teague. “I think we’re going to see the cliff again next year or the next.”

Referring to using reserve funds, Councilwoman Jennifer Bowles said “we can’t do this every year. This is not a long-term fix.”

People choose to live in the city instead of Henry County because they want higher levels of services than the county provides to its residents, said Councilwoman Kathy Lawson.

“But we have to be able to afford those services,” Lawson said.

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