City Holds Annual Budget Retreat Feb. 5
February 5, 2007 - Mayor Bill Haslam told City Council members today that the city has had a strong financial performance for the first half of fiscal year 2006-2007 and he expects that to continue through the remainder of the year.
"We are doing well as a city financially," Haslam said in opening the morning-long budget retreat for council members and directors of various city departments at Ijams Nature Center. "The numbers you are getting ready to see are good numbers."
Haslam also told the group that the city essentially has some extra money in savings and asked council to amend this year's budget to allocate about $4.9 million on much-needed projects ranging from flood control efforts along First Creek in North Knoxville to paving projects across the city.
According to a presentation by Jim York, the city's deputy finance director, Knoxville should finish the fiscal year in June with a General Fund Balance of $36.4 million - up from $34.7 million last year.
The General Fund balance has nearly doubled since 2004.
Haslam said the city has focused on controlling expenditures while trying to enhance revenues and the effort has paid dividends. He also credited a strong economy with helping the city's financial performance.
"I think things are going well with the city right now," Haslam said. "We set a plan that is working and I think we stay with it."
In addition to the increase in revenues the amount of the city's debt is falling.
"We've been taking off debt rather than taking on new debt," York told council members.
Because of the city's good financial condition Haslam asked council to amend this year's budget to add money to both the general and capital budgets to pay for projects.
He likened Knoxville's situation to that of a person who has a little more than expected in their savings account and a leaky roof.
"If you have money in your bank account and the roof is leaking, then you need to fix the roof," he said.
Haslam asked council to consider putting back $300,000 in the budget that was taken out last year so that performance raises for employees could be restored.
He also asked council to consider adding the $4.9 million for capital improvements.
Those improvements include:
• $1 million to begin correcting sidewalk problems on the 100 block of Gay Street that stem from the street being raised decades ago.
• $2 million to start correcting flood control issues along First Creek in North Knoxville.
• $900,000 for developing infrastructure for the South Knoxville Waterfront Development project.
• $1 million for additional paving projects in various parts of the city.
Haslam said that if the city doesn't spend the money on those projects now it might end up spending a lot more on them in the future.
The mayor also reported that the new downtown cinema is on track to open in early June.
But he also told council that while the city is in good shape it also faces some upcoming challenges.
Those include spending an estimated $700,000 in computer upgrades to meet federal government requirements, concerns that the city could lose certain federal grant monies; the ongoing effort to build a new transit station; developing the ambitious South Waterfront project where development interest is running even faster than anticipated; and trying to rein in skyrocketing health insurance premiums.
Projections also indicate that the city's expenditures will begin to exceed its revenues around 2011 if current trends don't change.
Haslam said the city would work very hard on all the issues it can control.
The budget process for fiscal year 2007-2008 is currently underway and budget hearings are set for April 2-4. The mayor expects to submit that budget on April 27.
"I am very encouraged and optimistic about where we are financially," he said.
BUDGET INFORMATION
2007-2008 Budget Info
Six Month Financial Report [PDF]
Budget Archive (Budgets from years 2001-current year)