Dear Mr. Evans:

According to the information given to us by Finance Director Mitchell Monday night on the &8220;Budget to Actual Report,&8221; the following line items are already overspent for the fiscal year which does not end until Sept. 30, 2007.

GENERAL GOVERNMENT

Liability Insurance and Claims 117 percent of budgeted $329,883 spent

Dues to National League of Cities 115 percent of budgeted $1,500 spent

Legal Expenses 111 percent of budgeted $25,000 spent

Traffic Light Maintenance 119 percent of budgeted $7,000 spent

Workers Compensation 101 percent of budgeted $210,000 spent

Uniform Rental 109 percent of budgeted $35,000 spent

Capital Outlay 283 percent of budgeted $35,053 spent

With three months remaining in this fiscal year, we could face a serious financial problem in shifting money from other General Government items to cover these excess expenditures.

It is likely that we will have significant additional expenses in Liability Insurance and Claims, Legal Expenses, Workers Compensation, and Uniform Rental in the remaining three months of the year.

Other areas of city government also have some expenditures which are approaching being over the budget or are already over the budget.

For example,

CITY CLERK

Travel

97 percent of budgeted $8,000 spent

Dues to Associations 141 percent of budgeted $300 spent

PERSONNEL DEPARTMENT

Miscellaneous 100 percent of budgeted $845.82 spent

POLICE DEPARTMENT

Bldg/Structure Repairs

102 percent of budgeted $20,000 spent

Budget Supplies 110 percent of budgeted $5500 spent

Photographic supplies 120 percent of $500 budgeted spent

I believe the policy is that these departments can move money from another line item in their budget to cover these excessive expenditures.

I trust that the movement of monies to cover the expenditures over 100 percent will appear in our next report.

With 75 percent (nine months) of the fiscal year gone, there are at least 75 line items where departments have spent more than 75 percent of the amount budgeted for the year.

This is a matter of concern if departments continue to spend at the same rate as they have the first nine months of this fiscal year.

I suggest that the Council, as the Finance Committee, look at these items, particularly the General Government items, and determine what can be done to avert a financial shortfall.

Cecil Williamson

Councilman Ward 1