“I’m for a balanced budget,” Councilman Terry Templin said. “I can’t vote for anything that is not balanced. … You cannot spend more than you take in.”
Officials have said expenses were going to exceed revenues during the upcoming fiscal year, which begins Oct. 1 and ends Sept. 31, 2014 because of a large sewer debt. The city was forced to spend millions of dollars for the rehabilitation of the city’s sewer system after sewer overflows throughout the city. In addition, the city is contractually obligated to purchase 750,000 gallons of water per day from the Coosa Valley Water Supply District, of which it is a voting member.
City Manager Patrick Draper said the city’s total debt is $41.8 million and of that debt, $31.5 million is debt incurred through the Utility Department, water and sewer.
In past years, the general fund subsidized the utility fund budget, but the council recently approved a 10 percent rate increase for water and sewer customers in an effort to make the utility department self-sufficient, and to help balance the city’s utility budget.
Draper said city officials also trimmed $7 million off the city’s budget for the next five years, as well as a freeze in cost-of-living raises for city employees, to help curb spending.
The council is also considering refinancing an old bond debt to lower payments in an effort to balance the budget in the coming years.
City officials said the plan is to pull funds from the $2.5 million reserve to make up the shortfall this upcoming fiscal year. In addition, city officials expect the economy to improve, which will generate more tax revenues for the city.
“The year after that, we should be OK,” Councilman Jay Jenkins said.
The city recently bought the Avondale Mills property and used reserve funds for the $1 million purchase.
While the council has expressed concern about the $800,000 deficit next fiscal year, it is poised to incur an additional $4.5 million of new debt to construct a city pool, purchase the CenturyLink building for a new library and other city offices, to pay back the city’s reserve for the Avondale Mills property and to fund other various capital improvement projects within the Parks and Recreation Department.
The council tabled a resolution to secure the $4.5 million until the 2014 budget is passed by the council.
Council President James McGowan said Thursday he would like more time to review the proposed 2014 fiscal year budget.
“I would like another couple of weeks on this,” he said. “We do have time. I just want to make sure we are making the right decision. … I feel like I need more time.”
The council is expected to consider the budget at its next regularly scheduled council meeting at 6 p.m. Sept. 23.
Contact David Atchison at firstname.lastname@example.org.