Covington kicked off its budget talks Saturday, with Mayor Ron Washington and City Manager Ken Smith urging a “status quo” approach as economic uncertainty looms.
“With the current uncertainty of our federal government, there’s a lot of rumors or whatever that’s in the community,” Washington told the other meeting attendees at the beginning of the meeting, “and what you’re going to be listening to is a budget, a status quo budget.”
“We think we want to be cautious,” Smith said.
Members of the City Commission and the city’s department heads also attended the meeting. Smith emphasized that the budget, in spite of the aforementioned caution, was a living document, and the city would have a better idea of what the future would hold after the first quarter. As such, department heads could still request things added to their departmental budgets.
The city’s budget has several key sections, the most prominent of which is the general fund, largely paid for with tax revenue.
A shortfall within the general fund emerged during the pandemic, and although the city’s most recent financial audit indicated the deficit was closing, the city is still largely reliant on reallocated COVID-19 emergency funding to fill the gap.
The city has about a year and a half’s worth of such funding remaining, and is banking on the city’s economic development to solve the problem long-term.
Even if the city passed a 4% property tax increase, budget projections from the city’s finance department predicted a decline in property tax. Other predicted declines included city franchise fees (often collected from utility and telecom companies) and various other forms of non-tax revenue.
On the other hand, net profits taxes and payroll taxes, the latter of which is the largest chunk of the general fund’s revenue, were predicted to increase.
Increases in predicted general fund expenditures were largely the result of typical year-over-year increases in expenditures for maintaining city services, rather than large scale changes, according to the city’s Budget Director, Brandy Ott.
There were some requests from department heads that could increase city expenditures.
One was a request from Economic Development Director Tom West for a dedicated development director for the IRS development. The director would oversee attracting new buyers and developers to the development’s remaining land plots and ensure legal compliance. West pointed out that the department had been gradually reducing its budget for several years and emphasized the development’s importance for the city’s overall health.
“It’s a lot to take on,” West said. “We’ve got a lot more down there still that needs to be done. We want to make sure that we maintain that momentum, and having this person do that would be a big help.”
West asked for $82,326 to cover that position, a figure the mayor thought was too low, given the economic importance of the site. A higher salary would probably be needed to attract qualified candidates, Washington argued.
Other higher-ticket asks included roughly $530,000 from the police department for a Flock traffic camera system, a police social worker, a police drone program, and a reshuffling of the labor structure for Devou Park’s park rangers.
The HR department asked for just over $51,000 for a specialist to manage its computerized (and purportedly underutilized) back end. HR Director Cindy Lewis said this would also bolster the back end for other key departments, including the finance department.
The IT Department indicated the contract for the city’s free Wi-Fi program, Covington Connect, with Altafiber was set to expire April 1, 2026, and initially asked for just over $100,000 to keep the program going. After some discussion, however, the attendees indicated an interest in possibly reorganizing the program to pull on help from community business partners, which may cut costs.
The Public Works department asked for about $64,000 for various expenditures, the largest of which was a $24,000 increase in the salary for one of the department’s veterans, whom Public Works Director Keith Bales and the city manager characterized as a kind of de-facto city engineer, a position the city hasn’t had in years.
Finally, the largest ask came from the fire department: about $1 million. The largest portions of the department’s ask were to create a training chief position and to add a single safety officer to Fire Rescue Truck 1, which is currently only staffed with two firefighters.
No final decisions were made at the meeting. The city will continue planning the budget at a similar meeting on May 17, and the City Commission will need to vote to enshrine the new budget before July 1. The commission can make amendments to the budget throughout the year as circumstances dictate.