Ludlow grapples over budget, adds amendment for Monday night reading

After several contentious discussions regarding Ludlow’s budget for the fiscal year starting July 1, the Ludlow City Council will cast a final vote on its new budget Monday night.

Over the course of multiple meetings, the city council and mayor have discussed at length how to best spend the city’s money.

“I encourage residents to attend, make their voices heard and respectfully contact city council members before the final vote,” Mayor Sarah Thompson said.

In Kentucky, cities must adopt an annual budget by passing an ordinance on or before the start of the fiscal year. Fiscal years run from July 1 to June 30 and are named after the calendar year they end in. Cities are required by law to pass a balanced budget, and setting the budget falls under the authority of city councils.

At the June 11 meeting, an issue emerged that has contextualized all of the conversations about the city’s budget since; the city is spending more money than it is taking in, at least from the city’s general fund, from which it draws most of its operating budget.

The budget presented on June 11 put the total estimated revenues for at about $6.05 million, and the total estimated expenditures were about $6.4 million. About $2.9 million was set to carry over from the previous year.

What’s more, historical data from the city suggests its actual expenditures have exceeded its budgeted expenditures since fiscal year 2021.

Council Member Meagan Guthrie broached this issue at the meeting on June 11.

“We don’t have a structurally balanced budget,” Guthrie said. “Our revenues should exceed our expenditures, and right now, how this budget is drafted puts us on an operational deficit.”

Thompson responded at that meeting meeting by saying “our savings is technically four months of operating expenses although it’s included in the general funds total.” Thompson also noted that she has been working without a city administrator and has been working with a consultant to help her.

“I’m doing this for $2,400 a year, and I am putting in a lot of time and effort,” Thompson said.

Guthrie proposed calling a special meeting to further discuss the budget. That meeting was later held on Wednesday of last week, the day before the council’s normal meeting on Thursday, June 25. A new proposed budget, which you can read here, was produced prior to Thursday’s meeting.

It was at the Thursday meeting that Guthrie proposed her budget amendments. Guthrie said one of the primary areas of concern was the fire department. The initial budget reflected reductions to the fire department, even though the department requested three additional full-time EMTs. Council Member Julie Terry Navarre, who will challenge Thompson for the mayor’s seat in November, likewise expressed concerns about the fire department.

The amended budget, on the other hand, includes full-year funding for these full-time positions, as well as requested medical equipment (worth $75,000) for the fire department, which will last approximately seven years, according to Thompson.

Guthrie’s proposed budget amendment would reduce spending by $721,610, enough to balance the budget, although given the tendency of the city to spend more than it estimates, whether that would be enough remains to be seen.

“I don’t want the next council that’s coming in January to inherit a budget that’s in a deficit,” Guthrie said, “because right now, we are at a $713,000 deficit for how this budget is proposed.”

Specifically, Guthrie’s proposed amendment, which you can read here, includes reducing the capital improvement fund by $58,130, reducing miscellaneous operating and support services for administration by $349,620, reducing the road repair and maintenance fund by $48,490, reducing other police operations by $38,940, reducing the community events and programming by $30,000, reducing parks maintenance and operations by $46,430, and eliminating the Hollingsworth Field Lighting Project.

The Hollingsworth Field lighting project had initially allocated $150,000 for field lighting fixtures, electrical infrastructure, concrete work and installation necessary to improve visibility, safety and usability of the athletic facilities. The project was intended to serve young athletes and community recreation.

“We’re really suggesting to have a conversation with the school about that,” Guthrie said. “It was something that was brought to use to keep them in Title IX compliance, but we think that is something we can collaborate with the school on.”

A local business owner pressed city leaders on why property taxes are rising, despite the city holding financial reserves. City Council Member Stephen Chapman Sr. responded that the city’s limited commercial base leaves homeowners carrying most of the tax burden.

“We don’t have enough businesses to offset the tax rates for residential properties,” Chapman said. Property tax makes up 41% of the budget’s revenues. Chapman also emphasized the importance of having an emergency fund.

“So, my opinion on this is we keep forgetting we have a $3 million carryover budget,” Chapman also said. “So, you have $3 million coming in on top of this already, you go through all your spending and at the end of year, it’s projected we’re still going to have over $2 million… so, I think we’re still going to be okay financially.”

“The budget was prepared by myself and Steve over weeks of work,” Thompson said. “It included many changes that I knew that the city residents had asked for, and a large chunk of it was lobbed off tonight with no real concern as to what it was for. If you reach out to me in the future asking why certain things aren’t being done, you know exactly the reason.”

Thompson released a statement to LINK nky on June 27th stating that she respects council’s authority to amend and adopt the budget, but she has experienced organizational and financial challenges, especially without a city administrator.

Ludlow has been without a city administrator since early March when former Ludlow City Administrator and former Police Chief Scott Smith resigned. Thompson tried to hire Christopher Courtney, the associate director for local government services at the Northern Kentucky Area Development District. However, Ludlow’s city council voted down the appointment of Chris Courtney as city administrator. 

“When the city administrator (Smith) resigned, he sent an email to every member of Council and every city employee criticizing my leadership, accusing me of micromanaging, claiming employees were leaving because of me, asserting that the City’s budget was ‘off the rails,’ and encouraging council to ‘stand up as a team’ and ‘say and do something,'” Thompson said.

Thompson told LINK nky that she observed an immediate change in the relationship with council and her administration following Scott’s email. Debates over how to apportion executive and legislative power in the city government have characterized the dynamic of the council since Smith’s resignation.

The final vote on the budget will take place on at 7:00 p.m. at the Ludlow Municipal Center on Elm Street. The meeting is open to the public.