Finance director warns that revenue still needed

Published 12:00 am Saturday, July 3, 2004

Ironton's often predicted financial D-Day could be less than 18 months away, according to the city's finance director.

After warning for years that the city will eventually face a financial crisis if revenues do not increase, finance director Cindy Anderson reiterated Friday that city coffers could begin to run critically low by the end of 2005.

Though Ironton's adjusted 2004 budget looks a little better than anticipated, Anderson warned last week that the city's ongoing trend of spending $500,000 more than it brings in each year needs to change by the end of this year to keep the city's carryover from being all but depleted.

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On Thursday, the finance committee recommended to city council an adjusted version of the 2004 budget that reflects approximately $100,000 more revenue than expected. The minor changes are typical for the first full budgetary adjustment of the year, Anderson said.

However, she warned that the optimistic projections could be misleading. As of Dec. 31, 2003, the city had $769,272 available in carryover funds but the city is still on track to have less than $30,000 in carryover at the end of 2005 unless something changes drastically. These projections are based on the expenses for 2004 budget and include zero increases for salary and benefits, a modest 9-percent increase for health care insurance and no increase on other operating expenses.

"Revenue is going to have to come up somehow. I don't know where it will come from," she said. "I don't know of where else council and the mayor can cut."

Something - an income tax increase, reciprocity agreement change, needs to be done, a municipal fee - needs to be in place by Dec. 31, 2004, to have a full year to collect the funds, she said.

Many of these ideas have been considered. A $10 municipal fee has been voted down twice. A $3 fee is still on the table and council is considering placing an income tax increase on the November ballot.

According to the adjusted budget, the general fund revenue increased by $87,956 - from the projected $3,611,979 to $3,699,935. The biggest cause for the change is that income tax revenue is $100,000 higher than anticipated because the collection of delinquent taxes and the changed interpretation of the reciprocity with the Boyd County, Ky., income tax.

Expense projections decreased by approximately $2,700 even though the police department overtime and other areas were allocated a little more money.

"The savings came from a little bit of everywhere," Anderson said. "It did not come from any one place."

Because of the higher than anticipated revenue, the carryover is now projected to end at $348,093 - more than $90,000 more than anticipated.

Several council members including Brent Pyles and Jesse Roberts complimented Anderson on the revised budget Thursday.