THE RIVER CITY NEWS MORE COVINGTON NEWS THAN ANY OTHER SOURCE
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by Michael Monks
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| Bob Due, Covington finance director |
Covington finance director Bob Due promised a budget presentation "long on narrative and short on numbers" and promptly delivered just that. "At this time last year we were finishing up the budget road shows," Due said of his joint appearances with City Manager Larry Klein at various neighborhood stops to promote their position that city employees needed to pay more for health care benefits in order to balance the city's budget. But even with those health care concessions from the city's public labor unions now achieved and other expected savings from the closure of the emergency dispatch center, the tax amnesty program, and the internal reviews being conducted in every city department, Covington will still face a $2 million-plus budget shortfall and likely more job reductions next year.
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"There is still a huge gap between what we should be doing and what we are," Due said. "There's been a number of significant positive changes for our financial health. Our task is not complete, however." Though the financial picture for Covington was far bleaker several months ago when a $20 million deficit was projected by 2017, that number now stands at less than $5 million with nearly half that needing to be addressed immediately.
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Next year's budget will be the first in which the city feels the full effect of the departure of Omnicare and The Nielsen Company, two large corporations vacating tax payer-subsidized RiverCenter office space for tax payer-subsidized office space in Cincinnati. Add that burden to the decrease in payroll tax revenue elsewhere, the ever-shrinking "rainy day fund", and a recent assessment by the Kenton County property value administrator that lessened the worth of Covington real estate by roughly $60 million (bringing the total value just below $2 billion), and the City of Covington could be out of money early next year. "If we have a year like fiscal year '10 or '11 we'll be in a negative fund balance," Due warned.
Next year's budget will be the first in which the city feels the full effect of the departure of Omnicare and The Nielsen Company, two large corporations vacating tax payer-subsidized RiverCenter office space for tax payer-subsidized office space in Cincinnati. Add that burden to the decrease in payroll tax revenue elsewhere, the ever-shrinking "rainy day fund", and a recent assessment by the Kenton County property value administrator that lessened the worth of Covington real estate by roughly $60 million (bringing the total value just below $2 billion), and the City of Covington could be out of money early next year. "If we have a year like fiscal year '10 or '11 we'll be in a negative fund balance," Due warned.
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That so-called rainy day fund has consistently dwindled since 2009, following twenty-five years of steady growth in the city. In 2009, the end of year fund balance was more than $2.5 million. At the end of June, that figure will stand at just $438,000.
That so-called rainy day fund has consistently dwindled since 2009, following twenty-five years of steady growth in the city. In 2009, the end of year fund balance was more than $2.5 million. At the end of June, that figure will stand at just $438,000.
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Due, who said the finance department took the lead on the budget (the first time the City engaged in zero-based budgeting in which every item over $5,000 required justification), explained that he and Klein aim to cut 5% from public safety and 5% from all other departments. Those amounts total $1.6 million and nearly $700,000, respectively. In order to achieve cuts of that scale, layoffs would likely occur.
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There is much more work to be done over the coming days before the final budget is voted on by the city commission by the end of June. The new fiscal year starts July 1. "There is a large amount of interest coming of late with people wanting to locate here, or new restaurants opening," Mayor Chuck Scheper said. "There's a lot of energy coming, a lot of folks looking at opportunities. But that's not going to solve the problems of today. We have to grow in order to be competitive."
There is much more work to be done over the coming days before the final budget is voted on by the city commission by the end of June. The new fiscal year starts July 1. "There is a large amount of interest coming of late with people wanting to locate here, or new restaurants opening," Mayor Chuck Scheper said. "There's a lot of energy coming, a lot of folks looking at opportunities. But that's not going to solve the problems of today. We have to grow in order to be competitive."
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