Alva revenues down $5 million from two years ago

After two or three years of enjoying an oil and gas boom and the associated growing pains, Alva is experiencing a sharp decline in the city budget. City Business Manager Joe Don Dunham presented the Alva City Council with a monthly financial report as well as an analysis of the fiscal year ending June 30.

Dunham said the theme for the budget year “has been consistent declining revenues” and control of expenditures. FY2016-2017 revenues were down 17 percent from the preceding year (FY 2015-2016) and 35 percent compared to FY2014-2015. In other words, city revenue has decreased by about $5 million in two years.

Sales tax pays for a majority of the Alva budget, like that of all other Oklahoma communities, and the local revenue decline is a reflection of Oklahoma economy as a whole. When sales are down in Alva, the city budget suffers.

The second major revenue source for Alva is from utility collections which have decreased by 6 percent over the last year and 10 percent from two years ago. The city is still evaluating a utility rate increase.

Expenditures

Along with the revenue decline, Alva tightened the reins on expenditures. Those are down six percent from FY2015-2016 and down 19 percent from two years ago. City budget expenditures have fallen $3 million in two years.

Personnel expenses for the last fiscal year were about the same as the preceding year and 21 percent less than two years ago. Spending on capital outlay items fell 65 percent from last year and 14 percent from two years ago.

However, operating expenditures have increased by 15 percent from FY2015-2016 while falling by 16 percent from FY2014-2015 levels.

Looking Ahead

As the new fiscal year began on July 1, the cash balance for all City of Alva accounts was $808,162.91 with investments totaling $2,460,237.62. The investments are in certificates of deposit to draw some interest income.

Dunham said city staff and finance committee members continue to look at ways to generate revenue while controlling costs. He said, “The city has eliminated any and all non-essential purchases. This practice is anticipated to continue into the FY2017-2018 budget year.”