Budget bright spot: Loudon City income exceeds outgo - again
Loudon City Council Monday adopted on first reading an ordinance establishing a budget for fiscal year 2011-12 of about 6.35 million.
According to Lynn Mills, city manager, health insurance costs are on the rise again, and salaries will cost more as well, but with conservative budgeting, cautious spending and unanticipated revenues, the City of Loudon is looking at a surplus Ending Fund Balance to carry into the coming fiscal year, and it appears no tax increase will be necessary to fund the recommended budget.
The tax rate to fund the budget was 1.0287 for 2010-11, and Mills said it is expected to remain the same for the coming fiscal year.
The proposed 2011-12 General Fund budget of $6.353 million in revenues reflects an ending fund balance (2010-11) of about $200,000 more than had been projected.
Mills said a few surprises in revenue numbers accounted for the surplus in the Fund Balance.
"Our property tax projections were $50,000 less than actual collections, which surprised us, with the economy the way it is," Mills said. "The prior year, we had a $69,000 increase and it was $27,000 the previous year. What happened was a lot of people were going back and paying taxes from prior years."
Another surprise revenue increase was $15,000 more than was expected was collected in sales tax reimbursements, Mills said. "Liquor inspection fees were up $30,000, and that helped lead to part of the surplus," he added.
Also adding some padding to the coffers this year was the $245,000 sale of Highland Park Business Property on Highway 72 to Tennessee Packaging Inc.
"We had $129,000 left, and the new fire truck took roughly $85,000 in local funds from our fund balance," Mills said. "That left us $44,000, plus the $250,000, so we're putting just under $300,000 into a separate equipment fund, and capital expenditures will be able to come out of that fund."
The 2011-12 budget proposes an across-the-board salary increase of 2 percent for city employees; last year, city employees received 3.5 percent increases.
Mills told council members Monday that the Loudon County E-911 Board had requested funding. The request was not included in the proposed budget, Mills said. "In past years when this came up, it was not funded," Mills explained. Council felt it was a countywide operation that comes from county taxes, which our citizens already pay, and by excise tax, which they also pay. If you desire to include it in the budget, we can do that. Any changes from what is adopted tonight can be made between the first and second reading."
Councilman Lynn Millsaps recommended the request not be funded. "They changed the way they operated a few years ago. They didn't want anything to do with the county, so the county cut the money out. I make a motion we don't fund them."
The motion carried unanimously, but council members still want to take a closer look at the proposed budget before final adoption. A special budget workshop meeting will take place May 26 at 1 p.m. A public hearing for the proposed budget ordinance takes place at 7:15 p.m. June 20, prior to the regular meeting.
In other action, the board approved two loan application submissions requested by Loudon Utility Board for expansion of the water treatment plant and construction of a new raw water intake. The loans of up to $500,00 from the state revolving loan fund will provide initial funding for the projects, but bond issues may be required later.