Contact: Natalie Bowers, 859 292 2186

Covington's Budget Defines Sound Fiscal Policy Commitment and Focuses on the Future

Structurally Balanced Budget and Sustainable Financial Future to Attract Investment with Five Core Commitment Areas

COVINGTON - City Manager Larry Klein delivered the City Manager's recommended Fiscal Year 2013/2014 Budget to the Commission this week noting that, "it moves us toward providing services at optimal levels and secures a more stable financial future through reinvestment in the City's infrastructure, economic development, neighborhood revitalization and public realm, while maintaining the fiscal discipline demonstrated by the City in the past two years."


Since taking the post as City Manager in 2009 during a time when most cities endured the beginning of an unprecedented decrease in revenues while experiencing cost increases due to the worst global recession since the Great Depression, Klein has been focused on steering the City away from financial default and toward a path of reinvesting in the infrastructure of the City as a means of retaining and attracting residents, businesses, visitors, and additional private investment. The City Commission's long-term financial outlook and willingness to make difficult financial decisions in the past have been essential to maintaining structural balance to the City's budget and enabled the opportunity at this point in the City's history for a serious commitment to what he calls the 'Community Investment Plan', a five year plan of committed and responsible reinvestment to improve the quality of life by attracting new businesses and jobs,  revitalizing neighborhoods, improving property values and adding new revenue  for the City.


In his message to the Mayor and Commissioners, Klein explained that the City has reached an unprecedented point of opportunity. The policy basis for his recommended budget heavily relies on critical future decision making. "Over the past five years, we were fortunate to have an engaged, largely unified and fiscally-minded administration that saw the importance of reinvesting in our City which paved the way for us by creating a long-term vision and a financially sustainable plan. We made some difficult decisions and today, we have the opportunity to continue the City's progress on the right path as we enter our 'Third Century' " he says, referring to the City's Bicentennial that will occur in 2015.


The policy outlines five core commitment areas that focus on potential for greatest return on investment and quality of life improvements for residents with a focus on sound fiscal policy and attraction of further investment.  Klein emphasizes that this plan does not come at the expense of Public Safety; Police and Fire are two departments that will see increases in staffing and resources. The City's expenditure on these two services will continue to be well above average compared to other municipalities across the country, according to comparative data provided by ICMA (International City Management Association).


In summary, the proposed balanced budget recommends the following key actions:

1.     Invest in Infrastructure (streets, sidewalks, levee maintenance, storm water control), Facilities & Recreation, Fleet and Equipment. Establish long-term funding and focus for the City's basic needs - approximately $52 M over the next five years to these categories, including long-term funding for renovating or rehabilitating the urban core, riverfront and other areas. Continue on the current path of adequate long-range and sustainable funding for significant infrastructure improvements. Accommodate the enormous demand for green space and recreational opportunities as a tool to attract residents, businesses and further investment. Keep the City safe and looking like a great place to live, work, play and invest.


2.     Invest in Economic Development and Neighborhood Revitalization. Identify additional revenue streams through this investment and continue the City's current efforts to acquire and demolish foreclosed properties to remove blight from neighborhoods and to pave the way for new opportunities and new revenue sources.


3.     Manage the City's past and present personnel obligations. Implement a classification and compensation plan for non-union employees and focus on meeting past financial obligations to the City's police and fire and non-uniformed employee pension funds, which are currently underfunded.


4.     Focus on replenishing the City's reserve fund. Introduce an aggressive focus on building a $1 M reserve in the FY14 budget after previous years' fund balances hovering below $500,000.  Currently, the general fund balance as a percentage % of revenue is less than 1%, compared to other cities like Paducah and Bowling Green possessing 35% and 34% respectively.


5.     Invest in our Quality of Life. Improve the citizen, business and visitor experience and the quality-of-life considerations including City-wide beautification such as sidewalk and other public improvements. Lend support to community partners such as Keep Covington Beautiful and the volunteer Bicentennial Committee whose expertise , energy and reach can further implement improvements and promote our community.


Klein complimented the City Commission, City employees, and collective bargaining units, for their hard work and ability to make difficult decisions over the past several years to control costs and to shift the City's priorities toward reinvestment that will grow the City's economic base. He also pointed out that the structural balance of the budget should by no means be understood as the City being in 'great financial condition' and stressed that in order to capitalize on the progress we have made over the last few years,  the City needs to make this commitment to its infrastructure and reinvest in its foundation. "The most important thing is that we keep a strong focus on the original vision of financial reinvestment that occurred when we depleted our reserves, and keep an eye on the long term goals of our City and remember that we never want to be in that place again. Our steadfast focus on financial reinvestment and proven self-discipline will allow us to deal with the day-to-day issues in a stable and supportive fiscal environment. Focus and fiscal discipline by the City Commission got us to this point of opportunity in the City, and the same virtues will help us achieve our vision."


The City's Fiscal Year 2013/14 proposed General Fund budget totals $46.49M, and includes all of the City's services such as fire, police, public improvements, community services recreation and others. The City's proposed Capital budget is approximately $75 M over the five year period of 2014-2018, with a recommended first-year allocation of $26M in FY 2013/14. Last year's capital budget was $8M.


The Covington City Commission will hear the City Manager present the proposed budget on May 21, at their regular meeting beginning at 6:00 P.M. A first reading of the budget ordinance is scheduled for the City Commission meeting on June 11, also at 6:00 P.M. If any changes occur to the budget after first reading on June 11, a new first reading will occur on June 25; if no changes occur, a second reading will occur on June 27 at the Commission meeting.. All meetings will broadcast live on TBNK local government Insight channels 15 & 16. Past Annual Report documents are available online by visiting The City Manager's presentation will be made available after May 21.