As the City of Magnolia continues to battle lingering debt, City Administrator Paul Mendes says the city is working hard to keep expenses down and income up for fiscal year 2011. But council man John Bramlett is concerned the city is spending money too soon.

Mendes said the city is doing “fine” at five months into the fiscal year with low operational costs and increasing sales tax.

 “We are ahead of what we had projected,” he said.

The city’s Financial Statement as of Feb. 28 shows that the city has collected 45 percent of the projected budget for the general fund placing the fund at $958,965.80.

The Hotel/Motel Occupancy fund has collected 61 percent of its anticipated budget to date.

Water and Sewer are also ahead of schedule having collected more than 50 percent of each budget.

Mendes said that the city has received nearly all of the Ad Valorem Tax Revenue, which are property taxes received at the beginning of the year.

However, Bramlett stated that the Sales Tax Revenue should have amounted to 41 percent of the budget to date. The financial statement shows that the city has collected 37 percent.

“Sales tax is each month. We’re still not making the budget. We’re about 4 percent shy,” Bramlett said.

A portion of city sales tax is used to fund the 4A Economic Development and 4B Community Development Corporations. One half of one percent sales tax is dedicated to 4A and one fourth of one percent sales tax is dedicated to 4B.

The 4A Economic Development Corporation has collected 36 percent of the budget to date and 4B Community Development Corporation has collected 17 percent of the budget to date.

Bramlett also added that the Warrant Fee Revenue was predicted to be at 41 percent but has amassed only 18 percent of the budget.

While some funds are ahead and some are behind according to the financial statement, Mendes said the city continues to keep an eye on expenses.

“Were not expecting a windfall of money, but we are watching operational costs,” he said.

Mendes reported that the city had planned to deposit $140,000 into the reserve fund at the end of the fiscal year, but due to the city cutting expenditures, it is nearly ready to move the money to the reserve fund now.

Bramlett explained his concerns regarding projected city spending and the overall deficit of $467,430 that has carried over from last fiscal year.

Specifically, Bramlett questioned whether the city should spend $10,000 on a Fourth of July fireworks display.

“It’s like your checkbook. You don’t write checks if you don’t have the money,” he said.

After Mendes assured council the city had the money to spend on the fireworks show, the expense was unanimously approved at the council’s regular meeting held March 8.

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