By Emily Le Coz/NEMS Daily Journal
The city of Tupelo last week adopted its Fiscal Year 2013 budget with $32 million anticipated for general operating needs and $18 million for capital projects. The Daily Journal sat down with Tupelo Chief Financial Officer Lynn Norris to talk about some of the issues surrounding those spending plans.
Q. This is the second year Tupelo has separated its general operating budget from its capital expense budget. Why do this? What do you gain?
A. They are entirely two separate funding requirements. The operating budget handles the daily operations of the city and must be funded annually. The capital budget provides for the necessary equipment and long-term infrastructure needs of the city. Separating the funding and funding sources of each provides for better planning of long-range capital improvements. Also, the funding will be in place when the departments need to purchase equipment and not when they can get it funded through the annual budget process. This should lead to getting longer life out of the equipment and therefore saving taxpayer money.
Q. City Council leaders recently lamented a lack of funds for street repair while noting that a majority of Tupelo’s $18 million capital budget will go toward park improvements. Do you think we’re spending too much on luxury items and not enough on infrastructure needs?
A. Twelve million dollars of the capital cost for park improvements is going to replace a 50-plus-year-old aquatic facility. This is a long-term investment in the quality-of-life programs for our citizens, as is the remainder of park improvements. As to the issue of street funding, we appropriate $1 million a year for street improvements from the Public Works budget, and we are looking for other ways to fund more for street overlay and repairs.
Q. Much has been said about borrowing – either from the rainy day fund or by issuing bonds. What is a safe amount for a city to borrow and how much should it keep on hand for real emergencies?
A. You really do not borrow from the rainy day fund. This is actually a transfer from our savings account for city purposes. About three months of cash on hand for the operating budget is a good rule of thumb. That would be about $8 million. Bonds are issued for long-term improvements.