City Manager Steve Horton said lower than expected water and sewer tap fees and lower than expected sales and property taxes were some of the main culprits for the revenue shortfall. He said the city lowered expectations in these areas last summer, but no one was able to predict how much the economy would suffer.
"We had anticipated that the economy would decline, but we had no idea that it would do so to the extent that it has since October, 2008," Horton said in an e-mail.
To balance the budget several city departments cut expenses or removed or delayed projects, Horton said. The largest percentage deduction came from the Street Department which cut more than half of its $4 million budget. The city also cut more than $4 million from the Water and Sewer Fund and more than $2.4 million from Electric Operations.
The city's revenues dropped by 8.7 percent to $121.7 million, and, to be proactive, the city cut its expenditures by about 10.8 percent, bringing them to $118.8 million. The extra $2.9 million was placed into the city's general fund reserves, bringing the reserve fund to $22.7 million.
Mayor Kim Carter commended the city staff for finding ways to cut the budget and keep costs down.
"Steve Horton and his staff have been very proactive to amend the budget so we have a firm picture of where we may end the present fiscal year," Carter said in an e-mail. "The council has also been very involved and shown good judgment for maximizing large expenditures.
These actions will serve to guide us to the 2009-2010 fiscal year budget."
The city's departments are preparing the fiscal year 2010 budget now and should be finished by the end of April, Horton said. The process will be more difficult than in years past.
"We've had the luxury of a good economy for so long," Horton said. "We've included everything in the budget in the past, but we may have to split hairs this year."
In May, the mayor and council will have at least three work sessions to study and change the budget if they choose. In June, the city will advertise the budget, hold a public hearing and approve the final budget.
In other council news:
? The city may be changing where its $428,070 of Neighborhood Stabilization Program money is going. The city originally planned to use the money to buy and rehabilitate homes in Jefferson Village, but Vinson said the city is now considering buying properties, mainly vacant lots, in Harristown. Vinson said by building homes on some of the nine vacant lots in the area, the city may be able to trigger future development in the area, as opposed to fixing homes in isolated Jefferson Village. In order to go forward with the project, the city will have to get approval from the Department of Community Affairs.
? Randy Vinson, architecture and planning professional, was hired as Covington's interim planning and zoning director. Vinson will hold the position until June 30 and takes over for Shelley Stiebling who resigned on March 13. Horton said Vinson was hired because of his "vast public and private sector backgrounds as well as his educational accomplishments." City Senior Planner Michelle Larsen said Vinson's previous work with the county on projects such as Clark's Grove and Turner Lake Park showcase his abilities.
"I think it was a major coup for the city to get a planning director of Randy's caliber," Larsen said. "His background as a planner, educator and developer brings a diversity of experience that will be extremely valuable to the city. As a planner he understands the importance of sustainable development, but as a developer he knows how to make it happen."
The city will soon decide whether to have a permanent zoning director for fiscal year 2010.
? Lake Alexander, which is off U.S. Highway 278, east of Ga. Highway 142, behind the old 84 Lumber Company site, continues to flood because of storm water runoff from roads and developments upstream. Jane Alexander, the owner of the property next to the lake, said her driveway often floods and becomes impassable for many vehicles, leading to a potentially dangerous situation should a emergency occur, Horton said.
Cline Service Corporation is currently constructing a siphon system to reduce the water levels for $48,875, Horton said. However, an engineered spillway also needs to be constructed. The city was going to bid the process out separately, but because of the immediate need, the council voted to hire Cline also to construct the
spillway as soon as possible. The spillway is estimated to cost around $117,000. Horton said the city hopes construction will start within two weeks.
