COVINGTON -- The city of Covington will see a projected surplus of more than $716,000 in fiscal year 2012.
A budget recently passed by the council has revenues of $122,688,522 and expenditures of $121,654,389. Subtracting the employee retirement and cemetery trust reserves leaves a net reserve of $716,831. The millage rate remains at 8.2.
Though property taxes are projected at $4.8 million, only $3.8 million was budgeted, in part because final numbers were not available until after the budget was approved and in part because city officials chose to take a conservative approach, said City Manager Steve Horton.
Horton said he attributes the city's financial solvency to the decision a long time ago to be a utility provider and to city staffers "daily looking at the numbers and not spending what we don't have."
The sale of the cable television system to Charter Communications in 2007 netted the city about $27 million, but those funds have been used for specific purposes such as to pay down long-term debt and to purchase land at the airport, not for day-to-day operations, Horton said. That the city is weathering the financial storm is more due to the fact that staff members look at the general fund balance daily, spending is kept at bay and every effort is made to save money, he said.
For example, a new phone system was recently installed at a cost of more than $300,000, but will save the city about $15,000 a month. The city is also laying its own fiber where possible to eliminate monthly fees in favor of a one-time installation fee.
The budget includes the addition of 10 staff positions. Eleven were proposed, but the council opted not to fund a public communications officer at a cost of $77,000 for salary and benefits.
Some of the money applied toward the hires is already being spent, so the cost increase for all 10 positions totals only about $162,000. For example, the 911 Center will get four positions that are now being covered by current employees working overtime. The new positions will eliminate that overtime. Similarly, a new information technology specialist that will serve the Police Department will eliminate contract fees paid to an outside provider.
The budget also includes raises for the mayor and council, increasing expenses from $48,000 to $90,000. However, approval of the budget does not equal approval of the raises, Horton said. A compensation increase for elected officials would require a change to the city's charter, and that would entail two votes by the council and public advertisement.
The budget includes revenue increases due to several federal and state grants, such as $1 million for the Neighborhood Stabilization Program, a $482,000 Community Development Block Grant for Geiger Street infrastructure improvements and a $500,000 DOT grant. It also includes a projected $1 million increase in revenue from electricity, but that doesn't mean the city is turning a $1 million profit, as costs are projected to go up, Horton said.
More than $10 million is being transferred from the electric and gas funds to subsidize the general fund. The millage rate would have to be more than doubled without those utility funds, Horton said.
Though the city is faring well compared to other local governments, Horton pointed out that the budget was about $133 million three years ago, meaning it has decreased by more than $10 million.
"We're looking under every rock" to find ways to save money and generate revenue, Horton said. The Covington Municipal Airport is expected to be a revenue-maker, with fuel sales projected to be $100,000 more than purchase costs this year. While Horton predicts the airport will be an "If you build it, they will come" type venture, he said growth will be slow given the economy. Work on a new terminal building is expected to begin in spring 2012, funded by SPLOST, an expected state grant and local funds.