Audit Gives High Marks to Olivette, Highlights City's Economic Stress
The city audit points out the difficulty the city has had in "loss of local businesses, lack of consumer confidence" as well as "limitations in growing the City's overall revenue base to meeting increasing service requirements."
The Olivette City Council received a good marks in its annual audit of city finances from its auditor, Fick, Eggemeyer & Williamson, during a city council meeting in mid-November.
The auditor found no issues worthy of mention in its rundown on Olivette accounting procedures presented in documents to the council at its Nov. 13 meeting.
Worth noting, however, are some of the comments the auditor made in recognizing the city's difficulties in coping with the dragging economy over the past four years.
The following is excerpted directly from the audit report, with edits for brevity and clarity:
Despite significant efforts by City officials to exercise fiscal and expenditure discipline and restraint, several primary revenue sources for the City of Olivette will continue to be impacted by the continuing economic downturn for the foreseeable future.
Recent claims by economists and government officials that the recession is over and that economic recovery has begun are not reflected in revenue patterns for state and local governments, including the City of Olivette.
The effects are reflected in a continuing decline in property values and resulting loss in property tax growth, reduced retail sales with resulting impact on retail sales taxes (and) retrenchment of gross receipts of Olivette businesses.
Another significant impact is that the City's ambitious long-range redevelopment goals and other development opportunities have been delayed due to lack of interest or capacity from the development community, lack of realistic financing sources for new development, and the persistent caution of developers and lenders in pursuing new development or expansion in the uncertain economic climate.
Some of the specific impacts resulting from these (economic) conditions are as follows:
- Continuing contraction in overall property tax revenues due to shrinking levels of assessed valuation for residential and commercial real property.
- Increasing cost pressures for personnel services and employee compensation, fuel, utilities, employee benefits, and commodities. The City experienced layoffs of employees in FY 2010-11 for the first time in many years and maintaining the City's service capacity in the next few years will remain as a major challenge.
- Declining sales tax receipts in all categories due to loss of local businesses, lack of consumer confidence, and the general economic slowdown creating strong fiscal pressure on City operating funds primarily dependent on sales tax.
- A persistent unfavorable vacancy rate for retail and commercial businesses.
- Limitations in growing the City's overall revenue base to meeting increasing service requirements and renewal and upgrade of critical City facilities needed to support governance and service delivery.
- Increasing pressures to expand and renovate the City of Olivette facilities to meet public expectations for modern, up to date facilities, meet service delivery requirements and expectations, and provide adequate public amenities and assembly space for the future.