By JAMES MITCHELL
Sunday Times Newspapers
LINCOLN PARK — Heading into tomorrow’s special meeting at City Hall, Mayor Thomas Karnes wondered if this will be the year the city can move forward with confidence.
“Between last year and this there have been great strides made,” Karnes said of the city’s finances. The question will be if enough progress has been demonstrated to ease concerns that the city may face state guidance — if not management — over their finances.
A special meeting will begin at 6:30 p.m. and feature an audit of city finances from July 1, 2012 to June 30, 2013.
A year ago expectations were of a budget deficit of at least $3 million, and continued efforts to cut spending or find new revenue sources hoped to reduce that number. In August 2013 city officials requested a state review of finances, which continued through the end of the year.
Had the city failed to demonstrate progress toward reducing the deficit, state officials could place the city in consent decree, which could lead to the appointment of an emergency manager.
“We’ve been working the last two months,” Karnes said. Elected in November, Karnes and his administration continued with plans and strategies to resolve spending issues and generate revenue however possible.
Union contracts have been or are being settled, Karnes said, including a firefighter’s contract that cut pay but added insurance savings. Last month city council settled a lawsuit with SunTrust Bank; the city had reportedly defaulted on payments to Honeywell Corp., and Karnes said the legal case had become a drain on city finances.
“That wasn’t too bad for us,” Karnes said. “We end up paying it quicker and will free up about $83,000 a quarter with just that one thing.”
State officials were reportedly encouraged late last year with the city’s progress, and additional reviews in the weeks ahead could confirm that the worst of the economic storm is in the past.
Karnes said few decisions or conversations at city hall are held without invoking the threat of state takeover. Investors are uncertain, new businesses cautious and even a tentative State of the City address awaits scheduling. The event is normally held in February, but Karnes said that later may be better in this case.
“We wanted to see if we had the review team in here at that point,” Karnes said. “Doing one right now wouldn’t be proper.”
(James Mitchell can be reached at [email protected])