City Commission Gets Budget Workshop Preview

At the Paducah City Commission meeting Tuesday night, City Manager Jeff Pederson and Finance Director Jonathan Perkins led the Mayor and Commissioners through a pre-budget workshop, as city department heads are working to prepare their fiscal year 2014-2015 budgets.  Perkins provided trends over the past few years of the city’s sources of revenue including the payroll tax, business license tax, property tax, and insurance premium tax.  Paducah is starting to see slight revenue increases in all of the revenue sources except business license tax, which is basically flat. 

Over the last four decades, the average revenue growth has dropped from 6.77 percent in the 80's to 4.11 percent in the 90's, 2.97 percent in the 2000's, and 1.55 percent in the current decade. Pederson said the city of Paducah has met the challenge without significant service and delivery reductions, and becoming more efficient has probably the biggest key (in the past 8 years, the number of employees has dropped from 305 to 275).

With that said, Pederson added, "It costs money to expand our role and we need to live within our resources if we're going to manage with such a modest revenue growth."

He said there may be some tough prioritizing needed if some areas that have recently been neglected require attention in the 2014-2015 budget. Personnel costs have been holding steady at about 76% of the General Fund Budget.  For the next fiscal year, Pederson proposes to grow the property tax revenue by 4% which is allowable under law through a combination of valuation or rate increases.

Pederson added that the City has re-initiated an internal working document called the Capital Improvement Plan (CIP) which forces departments to prioritize long-term projects so that limited resources can be directed to the projects with the higher needs. Projects included in the CIP are the floodwall rehabilitation, the renovation of City Hall, the upgrade of E-911 radio controller, and the police and fire headquarters. Pederson says, “It makes sense to plan, to have our eyes open, of what our capital maintenance improvement needs are.”

Pederson also discussed the Investment Fund, which is funded by the ½ cent payroll tax approved in 2005 and generates approximately $4.6 million annually. Pederson explained that operating expenses are consuming virtually all of the General Fund resources which causes the Investment Fund to be the revenue source for debt payments and for infrastructure and facility maintenance. Pederson said, “The Investment Fund is the only source of revenue to construct, maintain facilities, and maintain infrastructure necessary to deliver core services.” 

Public Information Officer Pam Spencer explained that the budget book for this upcoming fiscal year will have enhanced budget narratives before each department and division.  The budget narratives will include the division overview and functions including the organizational chart, the highlights from the fiscal year that just ended, and the expected initiatives, goals, and changes for the new budget year.  The narrative also includes four years of that department’s budget.  The final piece is a comparison section to explain changes, with narratives and financial data, between the budgets of the fiscal year that just ended and the new fiscal year.  Commissioner Richard Abraham voiced his approval of the changes, saying, “This will help the citizens be more connected to their tax dollars.”

The City Commission and staff have a tentative budget workshop set for 4:00 pm on Tuesday, May 27 at the Julian Carroll Convention Center.