Finance Committee Chairman Ed Elkins has expressed concern about the budget on more than one occasion since it passed through the committee on June 10. At that meeting the Finance Committee recommended a few amendments which did not materially affect the proposed 2011 budget.
He said the mayor's proposed budget reduced the original FY 2010 expense budget by approximately $862,000 and the amended FY 2010 budget by approximately $2.483 million. However, year-end final amendments added $566,561 to the fiscal year 2010 expense budget.
Elkins said reductions of that magnitude are no small task and he has expressed concerns about the viability of the proposed budget. He cited two examples of concern. The first example was an apparent overstatement of fees earned by the Register of Deeds. That issue was resolved by an amendment to reduce the Register's revenue from fees from $300,000 to $120,000. That action reduced the fund balance by $180,000.
The second concern was for contracted services in the sheriff‘s budget. That line item was reduced from $117,790 to $73,000. However, Elkins found that a contract for Visionair Software maintenance in the amount of $49,861 and rent on the maintenance garage of $24,090 exceeded the budgeted amount in the contracted services line item by $951. Nothing, he said, was left other than contracted services items.
In a special report to the Cleveland Daily Banner published June 2, Sheriff Tim Gobble reported the fiscal year 2011 Sheriff's Office budget had cut spending by $600,000 over the current budget.
At the June 14 work session, Elkins expressed concerns about the viability of the proposed 2011 expense budget and the final amendments approved June 21 only increased his concerns of the fiscal year 2011 budget. He said he left the June 14 and June 21 meetings wondering how the same number of employees, plus one additional employee, could be supported by a budget reduced by $2.5 million.
Some of the reduction was offset in Davis' proposal by spending from the Capital Projects Fund. Elkins said $588,114 was cut from the original General Fund budget and $321,896 of the cuts was replaced by spending from the Capital Projects Fund for a net reduction of $266,218. However, the balance Capital Projects Fund was reduced from $455,855 to $169,000, excluding the $400,000 state grant for Elrod Park.
The Capital Projects Fund balance is reduced from $5,058 million at the end of fiscal year 2009, to $363,682 at the end of fiscal year 2012. Presently, the major local funding for this fund is prior year trustee's collection and interest income from county fund balances.
Elkins said all interest income is split 50/50 between the Capital Projects Fund and General Fund. Interest rates are expected to remain low in the near term and with May mortgage rates hitting a low not seen since the 1950s, he said he is not sure long-term interest rates will increase any time soon.
Low interest rates plus low fund balances indicate low interest income for all of 2011 and likely into 2012. Therefore, Elkins said there is likely little opportunity to increase the Capital Projects Fund balance. He said he did not find any budgetary provision in either the Capital Projects Fund or the Community Development Fund to address the $2 million commitment to fund the Southeast Tennessee Regional Veterans Home. While Elkins doubts federal funding for that project in fiscal year 2011, he would like to hear a plan for meeting the commitment should funding become available in October.