City Manager Richard Thomas’ budget plan calls for Richmond to spend more than $28.72 million in fiscal year 2017-18, an increase of nearly $1.24 million.
That is almost 4.6 percent greater than the nearly $27 million the city expects to receive in revenue for the fiscal year that ends June 30.
The revenue projection includes a 4 percent increase from taxes on previously enrolled property, the maximum allowed by state law without the possibility of a referendum. Revenue from property added to the tax rolls in the current year is not factored in the 4-threshold.
If Thomas’ tax recommendation is adopted later this year, the tax on real estate would rise from 14.4 cents per $100 of valuation to 14.98 cents. The tax bill on property valued at $100,000 would rise $5.80 cents, from $144 to $149.80.
As Thomas told the commission at its May 16 work session, the budget reflects a 4-percent pay increase for all employees and an increase of 15.8 percent for employee health insurance.
Still, the budget calls for spending almost $500,000 less than it expects to receive in revenue.
The city commission heard first reading of the financial plan Tuesday night, with Thomas providing a summary of main points.
Second reading of the budget is scheduled for the June 13 regular commission meeting, but the commission expects to meet for a 9:30 a.m. June 6 work session to discuss the plan in more detail.
More than half of city revenue comes from payroll taxes, with most of the rest coming from property, net profit and insurance premium taxes, plus utility franchise fees.
Additionally, more than half of the payroll tax comes from 20 employers. That means small changes in the business climate can have a large impact on city finances, Thomas pointed out.
Richmond Utilities will continue to transfer $25,000 monthly to the city’s general fund next year, the budget message notes.
By June 30, the city will have reduced its debt by $4.3 million, representing retirement of bonds issued for the Paradise Cove Acquatic Center and the 2013 purchase of 40 police cruisers.
The new budget calls for paying $301,232 on bonds that cannot be paid off until the following year. Its bond balance then will total $2.8 million. If paid off in 2019, the city would realize a saving of $51,500 a year for the following 10 years.
The budget also calls for putting an additional $200,000 in the city’s contingency reserve fund in 2017-18, bringing it to more than $7.12 million, or about 24 percent of projected expenses. The city’s goal is for the reserve to equal 50 percent of expenses, which is what its auditor’s recommend.
The city’s revenue forecast, debt reduction of expanding reserve helped it earn an improved bond rating this past year of Aa2, Thomas noted.
Thomas said Tuesday night’s presentation represented fulfillment of a promise he made with Finance Director Sharon Cain to have a budget draft by June 1.
With two regular commission meetings scheduled by June 26, plus the June 6 work session, the commission should be able to have a budget adopted well before the 2016-17 year ends June 30, the city manager said.
The only line item discussed Tuesday night was a proposed $70,000 increase in funding for the Richmond Transit Service operated by Kentucky River Foothills.
The additional money would enable Foothills to add a second bus to the service, reducing the intervals between pickups, now about 90. It also would allow the addition of new stops and expanded hours, from 7 a.m. to 7 p.m. instead of 8 a.m. to 5 p.m.
Mayor Jim Barnes questioned whether such a large increase in a recurring expense was justified, but commissioners Morgan Eaves and Jason Morgan said they would support the expansion. Eaves said the shorter wait times would encourage more useage, and Morgan said those who ride the bus to work would then be able to also take it home instead of paying taxi fare.
Reach Bill Robinson at 624-6608.