Corbin finances now are on ‘solid ground’

Following a grim budget picture painted by auditors in January, Corbin officials are now more at ease, saying the city’s finances are “on solid footing.”
A proposed budget for the 2006 fiscal year was unveiled at Monday’s regular monthly meeting of the Corbin City Commission and it showed markedly higher projected revenue for the upcoming year, coupled with strategic cuts in some of the city’s departments. It also includes a $100 monthly raise for all city employees with at least a year of service.
“The city’s finances are sound,” City Manager Bill Ed Cannon said of the city’s current financial health. “Everybody’s tried to tighten their belt and cut where they can. I feel very comfortable with the budget. It’s a very realistic budget.”
An annual audit of the city’s 2004 financial activity, presented to commissioners in January, showed a $607,328 budget shortfall – the second straight year the city had operated with a funding deficiency.
In the intervening months, to avoid a third straight year of problems, commissioners revamped the city’s fee schedule for business privilege licenses and raised residential garbage collection rates by $3. A report shows collections from privilege license fees is up about $85,000 over the same time a year ago. Though no specific numbers have yet been obtained regarding garbage collection rates, Cannon said he estimates about $1.1 million will be generated this year.
Cannon and other commissioners said they’ve heard few complaints from citizens about either of the changes.
“I think we are on good, sound financial footing right now,” Commissioner Alan Onkst said. “That is the result of some difficult decisions that had to be made and some good sound management.”
A committee – comprised of Cannon, and commissioners Phil Gregory and Bruce Farris – looked at ways to trim unnecessary spending in comprising a new budget.
The proposed budget for 2006 showed total expected spending of about $6.4 million – about $905,000 more than last year. Spending is expected to rise in the city’s general government operations, police department and building inspection. Cuts came in the Public Works Department, the recycling program and the Corbin Fire Department. The fire department suffered the deepest cuts – $144,240 less than last fiscal year.
Spending for the parks and recreation will remain flat ($175,000) and expected revenue from Corbin Off-Track Betting has dropped about $7,500 to $50,000.
Cannon said drops in projected spending for Public Works and the recycling program stem from reductions in debt load shared by those departments. The recycling program recently paid off money owed on the property where city hall and the Corbin Recycling Center sit. Public Works also paid off a loan owed on the city’s garbage transfer station – a waypoint where city trash is compacted, then taken to a landfill.
The Corbin Fire Department bore the brunt of more substantial cuts. Cannon said nearly all of the department’s unscheduled overtime has been eliminated … a savings of around $100,000.
A new health insurance plan for 2006 will save the city about .75 percent, though worker’s compensation insurance rates have risen.
Beyond the budget, officials say the city’s overall financial turnaround has been a swift makeover.
A $600,000 line of credit the city used to make payroll and pay other expenses has been eliminated. As of June 13, Corbin’s general fund account had a balance of over $300,000 … a marked difference compared to year ago. And with revenues from municipal insurance taxes arriving soon, Cannon said he doubts the city will see the types of deficiencies it had begun to experience in 2003 and 2004.
Onkst said the extent of the city’s financial situation was a surprise to many commissioners.
“When we actually discovered what kind of shape we were in, it was somewhat surprising,” he said. “We weren’t exposed to things we should have been exposed to at particular times. There were times when the numbers looked really good, like when municipal insurance and those types of things came in. It was easy to look at the numbers at that point and time and think, hey, we are doing really, really great.”
“When the new commission took office, things changed in a lot of ways. There was a new openness that we never really had before. It still exists today.”
Auditors from Cloyd and Associates, PSC told the commission in January that since 2002 the city’s revenue had only increased by 4.5 percent, while expenses ballooned by 17 percent. Declining on-hand cash balances – which city officials were most concerned about – caused a decline of nearly $60,000 in earned interest during the audit period.
After a public hearing on the proposed budget, commissioners voted unanimously to accept it on its first reading. City leaders will vote again later this month to adopt the budget.
• 2006 proposed budget specifics: Total appropriations $6,423,850. Departmental breakdown – General government $762,327 (up from $580,780 in 2005); Police $1,410,785 (up from $1,284,910); Fire $1,201,025 (down from $1,345,265); Public Works $1,169,345 (down from $1,244,015); Recycling center $172,600 (down from $219,475); Parks and Recreation $175,000 (unchanged from 2005); Building inspection $60,450 (up from $43,340); Flood control fund $1,500 (unchanged); Special projects $1,282,000 (up from $430,000); OTB revenue $50,000 (down from $57,000); Debt service $138,818 (up from $136,600). Municipal aid $170,000.