City's challenges

Challenges facing the city outlined by the city manager

• Sluggish growth (1.1 percent) in the property tax base has been realized.
• Slow growth in utility fund revenues that results from difficult economic times and an inability for various reasons to significantly grow the more profitable utility systems.
• Rising employee group health insurance costs in double digit percentages despite a reduction in benefits last year and an overall good to average loss experience.
• Retention of qualified, well trained and experienced employees in key positions is also a concern that I hope will be addressed with a new performance pay system this year.
• A significant rise in energy cost that affects the natural gas system profits.
• Elevated fuel costs continue to directly affect the delivery of services to the citizens of Shelby. All of our departments are reliant on fuel to perform the work necessary to serve citizens each day.
• A continuing reliance by the general fund on utility revenue subsidies especially at a time when natural gas prices continue to be higher thus causing overall consumption to be down.
• Aging utility systems and other city infrastructure will need significant investments of capital to continue reliable service and to meet safety and regulatory standards.
• Reserves in the general fund are below levels that allow the city to appropriately manage risk, react and fund emergency situations and provide security for new debt issuance for infrastructure that is necessary for growth.
  

Source: City Manager’s 2007-08 Budget Message