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City has $9 million left from '07 Cable sale
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Covington sold its cable TV system to Charter Communications for $27. 2 million in August 2007, and after four years of land purchases, paying down debt and airport improvements $8.9 million remain.

The Covington City Council voted in 2007 to sell the city-owned cable system because it believed the cost of keeping up with the evolving technology of digital communications outweighed the revenues it received from its approximately 10,900 customers.

The largest categories of expenditures have been $7.29 million on improvements to and land purchases around the airport, $6.8 million on paying off short-term and long-term loans and $3 million to boost the city's pension plan.

The city also gave $1.08 million to the Covington Housing Authority, which purchased three buildings off Turner Lake Circle that have since housed the Garden of Gethsemane Homeless Shelter, nonprofit FaithWorks and the Community Food Pantry.

City Manager Steve Horton said the majority of the money has been spent to benefit the city and its customers in the long term.

More than 160 acres of land around the Covington Municipal Airport have been purchased, either to clear out the approach to the runway or to be used for future economic development projects. The city and Covington-Newton County Chamber of Commerce view the airport as an economic driver for the county.

"Substantial land holdings around the airport have been purchased for future aviation safety and economic development efforts. If you wait until the last minute to make such purchases, the price may be prohibitive.
Early decision making and forward thinking such as has been the case will provide many positive financial opportunities for the City and County concerning the local airport and future development there," Horton said in a Tuesday email.

The city spent at least $6.8 million to pay off debt, including debt tied to the cable TV system. The city also paid off $1.64 million in existing debt on two fire trucks and $3.16 million in debt for prior gas pipeline and water and waste water projects.

"Paying off debt, especially debt with higher interest rates, is never a bad thing and it improves financial solvency and daily cash flow," Horton said.

The city also spent $3 million to solidify its pension fund balance.

"Using proceeds to improve the retirement pension fund balance will provide a higher investment principal for the fund and with sound investment strategies bring about greater investment earnings than would be realized with a smaller fund balance," Horton said. "Higher earnings and a higher fund balance with the pension fund is vital given that the City of Covington has an aging workforce where every vested employee's current or future pension represents a liability that must be paid by the city."

The homeless shelter allocation was a contentious topic in late 2007, but then-Mayor Sam Ramsey cast a tie-breaking vote in favor of giving the money to the housing authority to purchase buildings for the shelter, which
moved from Porterdale to Covington.

The shelter was being sued by the city of Porterdale at the time because the city said the shelter wasn't in compliance with city's zoning codes as it was in a residential area. Moving to Covington allowed the shelter to become eligible to receive state grants in addition to community donations, according to a previous article in The Covington News.

Even the buildings for the shelter were a long-term investment, Horton said.

"There will, however, short of some miracle, always be persons who are homeless and in need. The last time I checked, being homeless was not a crime and though some folks are there because of poor choices, not everyone had a choice in being without a job and without a place to stay, and the problem appears to be growing," Horton said.

"Therefore, I think the funding that went to the Housing Authority for the purchase of homeless shelter property was another sound long term decision on the part of Covington's elected officials because it, to some degree, helps the community manage the problem. It, however, is not a fix-all to the growing homeless problem likely before us. It is a burden that many caring and kind-hearted persons will have to shoulder and contribute to if so many undeserving individuals and families are to rise above their destitute positions and become self-supporting."

The city only has $1.9 million in actual cash reserves, but has nearly $7 million in certificates of deposit and a reserve bank account. The terms of the CDs were not immediately available, though the city had earned $683,833overall in interest since late 2007.

Expenditures have been less frequent since February 2008, with most being used to purchase airport land.