Powell City Council heard the first reading of an ordinance outlining the city’s proposed budget and estimated appropriations for fiscal year 2018 during its meeting last week.
According to a budget snapshot presented to council by city staff, Powell’s revenue for next year is anticipated to be $16.1 million, while total expenses, both operating and non-operating, are expected to fall to around $20.3 million.
City Manager Steve Lutz reminded council that while the proposed budget shows the city spending more than it anticipates bringing in, that isn’t necessarily how things will shake out in 2018 due to the city’s “conservative budgeting” philosophy in which it “underestimate revenues and overestimate expenditures.”
“When you take a look historically, we actually spend less than we take in, and that’s how we’ve been able to grow our unappropriated balance over the years,” he said.
If the 2018 figures were to pan out as forecasted in the budget and expenses were to exceed revenues by $4 million, the city’s unappropriated balance at the end of next year would be $8.6 million.
As for the general fund, the proposed budget shows total revenues reaching $8,548,237 in 2018 with expenditures expected to reach $8,767,139.
“One of the things you always have to keep in mind with a budget is it’s just a budget,” council member Tom Counts said. “We always spend our revenues wisely, and in many instances, we come well within what those budgeted numbers are.”
If the projections hold true, the general fund would close 2018 with an unappropriated balance of $4,523,000, which doesn’t include an additional $1,160,000 in “rainy day” funds.
“The ‘rainy day’ fund is a fund the city started years ago that is intended to be used only in a dire emergency,” Lutz said.
In his budget report to council, Lutz stated the anticipated revenues of $8.5 million in the general fund is a 5.65 percent increase from last year, primarily due to “the improving economy and the projected increase in income taxes and property tax valuations over 2017.”
“We are projecting in 2018 to generate $6.1 million of income tax out of our $8.5 million operating budget,” he said. “This is truly the lifeline to our budget. Income tax represents 70 percent of our general fund revenues, so the City of Powell, like other jurisdictions, lives and dies by the income tax.”
As for expenditures, the majority of the anticipated $8.8 million in expenses in 2018, up from $8.3 million in 2017, would go toward personnel ($5.9 million) and operating ($1.9 million) costs.
Lutz said the primary reasons for the increase in general fund expenditures are the remaining costs for the new police officer hired in July, contract assistance, and rising health care costs.
Council will next meet at 7:30 p.m. on Dec. 5 in council chambers at the Powell Municipal Building.
Contact Joshua Keeran at 740-413-0904. Follow him on Twitter @KeeranGazette.