The City of Lake Charles, Louisiana

City Ends Fiscal Year 2012 Without Deficit

The City of Lake Charles recently completed its annual financial review of operations for the fiscal year ended September 30, 2012. The unaudited report for the General Fund indicates that the City ended fiscal year 2012 with an operating surplus of $42,101. Earlier this year the City had projected an operating deficit of $1.3 million. However actual revenues received in the General Fund were sufficient to cover operating cost and other transfers. Actual revenues of $56 million were equal to projections; however, operating expenditures and transfers of funds for operation subsidies were $1.4 million less than estimated.

Said Karen Harrell:

"This is great news for the City. It demonstrates the commitment of our Department Heads and employees to work through fiscal challenges and help us manage operations to reduce costs wherever possible.

"As in previous years, the reduction in operating expenses was achieved by managing operations with fewer personnel as a result of unfilled vacancies. This resulted in savings on salaries and fringe benefits. We also experienced a reduction in other expenses such as solid waste disposal fees, demolition contracts and lower utility costs."

Every budget cycle projects that all full time positions are filled 100 percent of the time and provides funding for those salaries and fringe benefits. Vacant positions throughout the year result in savings. The City departments have continued to operate with 30 fewer positions due to reductions in budgeted positions made in 2011.

The budget adopted for fiscal year 2013 includes a $2.5 million projected deficit. It was based on projected increases in sales tax and other revenue items which were offset in part by continued increases in retirement contributions. The City intends to continue to manage operations during the current fiscal year in an effort to reduce this projected deficit.

The City's cash reserves of $25 million are still more than adequate according to our internal General Fund reserve policy. However, increased costs primarily in the form of retirement contributions will continue to put a strain on City finances. It should be noted that the City operates with a quarter cent sales tax less than all other governmental entities in Calcasieu Parish and does not charge a fee for trash and garbage collection.

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