COVINGTON, KY – Covington’s Board of Commissioners were presented with relatively good news during their meeting Tuesday night in the form of a $2.19 million carryover from the previous fiscal year.
A presentation on the City’s Annual Financial Report by the accounting firm Clark Schaefer Hackett revealed that the carryover from the previous fiscal year to be approximately $2,190,608.
When the budget was adopted in June of 2014, the City anticipated only a $19,000 carryover for the 2015 fiscal year, which ended June 30, 2015.
This brings the City’s total unassigned fund balance, or General Fund, to $4,271,673.
“Rebuilding our unassigned fund balance to a level that meets best practices for local governments is fiscally responsible, and allows the City to eliminate its reliance on the short term Tax Anticipation Note for the necessary cash flow to meet operating expenses of the City,” said City Manager Larry Klein.
The TAN has been used since the 1970’s to fill the gap when the City’s cash flow from taxes and other sources of revenue did not provide adequate funding to pay the City’s bills. The City’s new goal is to eliminate the TAN.
“The carryover is due to increases in revenues and a great effort by all City departments to cut expenses,” said Interim Finance Director Lisa Desmarais. “City staff has worked hard to use resources creatively and leverage existing funds.”
The City has been most successful in leveraging its capital bond funds to attract several million dollars from the state and federal government. Over the past five years, the City has been able to attract more than $5 million in federal transportation dollars for local infrastructure projects.
Infrastructure projects utilizing these funds include complete reconstruction of Caroline Avenue from West 34th to West 36th Street, replacement of sidewalks in Latonia and South Covington, and streetscaping on Madison Avenue between 5th and 8th streets.
Revenue increases came from an increase in permit and license fees, which includes payroll tax and business net profit returns.
“While we don’t have specific data on the exact number of new businesses, the increases in payroll taxes, net profit taxes, and zoning permits indicate that new and existing businesses are growing,” said Desmarais.
Last week, City Manager Larry Klein presented the Commissioners with a proposed Fiscal Stability ordinance. The ordinance outlines how theses carryover funds can be used responsibly and strategically in future years.