COVINGTON - The Covington City Council trimmed the 2008/2009 budget Monday night in response to a decline in projected revenues and expenses.
Revenues were reduced by about $11.5 million, from $133.3 million to $121.8 million. Expenses were reduced by about $14.5 million, from $133.2 million to $118.7 million.
Revenues were cut by 8.7 percent; the reduction is mostly economy driven, City Manager Steve Horton said.
Water and sewer tap fees are each down about 85 percent, he said.
Projections were based on revenue collected in previous years, which was about $900,000 for water taps and $1 million for sewer taps. Though those numbers were each reduced by about $100,000, the economy's nosedive has affected new development even more than anticipated.
Horton said city officials will have to be more conservative on estimates of tap fees in the future, considering that not all planned developments will come to fruition.
Water sales are down about 9.5 percent as well, in part due to government regulations requiring local utilities to reduce water production.
The city will also see a decline in property and sales taxes this year, he said.
With the budget set to be amended due to these changes, department heads were asked to reevaluate their budgets to see which projects would not be completed this year and where other revenue projections would fall short, Horton said.
"In other areas where we were overzealous and expected some things to be higher, we adjusted that," he said.
In some situations, it's just about being more accurate as far as actual expenses rather than falling short of revenues.
"It's kind of like driving down the road, trying to stay between the lines," he added.
Horton said the city is still in good financial shape, with a $2.9 million surplus in the general fund, as well as cash accounts totaling more than $40 million. The city has roughly $22.7 million in local cash reserves and more than $20 million in a trust for the Municipal Electric Association of Georgia.
"Short of the cable TV service we sold, we're running a full service operation. That gives us some opportunity to better our financial position because of those utilities. That was planning done a long time ago by officials who saw utilities as a good thing to offset city costs," Horton said.
Next year's budget, which takes effect July 1, could be reduced by as much as 15 percent, Horton said, but added that's only a projection at this time. The council will begin work sessions for the new budget at the beginning of May.
"It's proof you can have money in the bank and still need to cut your budget by 15 percent," he said.
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