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Covington commission to dip into reserves to make ends meet in tough times; cautious about spending

By Ryan Clark
NKyTribune reporter

It’s not the ideal situation, and the Mayor admits it. But he says it’s something the city will have to do, given the circumstances.

If approved, the next Covington budget will spend more than it brings in, forcing commissioners to dip into the city’s reserve funds — to the tune of $1.7 million — to make ends meet.

Commissioners have been working on the budget for weeks. But the draft was given discussion at the city’s regularly-scheduled caucus meeting Tuesday night, and Mayor Joseph U. Meyer and commissioners debated several points.

Meyer, along with the city’s Finance Director Muhammed Owusu, noted that the city has positioned itself well to be as close as it is to balancing the budget.

With all the recent problems the city has faced — from the IRS departure to the COVID-19 crisis — officials say they are actually remarkably close to their original fiscal year 2020 projections. How? Because city officials have spent judiciously and, perhaps most impressive, attracted businesses to Covington, with more than 800 new jobs agreeing to come since March 1.

Another bit of good fortune for the city? About $27 million of the proposed $57 million budget comes from payroll taxes, and 33 of the city’s largest payroll taxpayers make up more than 63 percent of that total amount. Of those 33 companies, none are expected to lay off any of their workers. In fact, one employer plans to hire 200 more. In a sense, the city missed that impact of COVID-19.

And it adds up to putting the city in good shape — for now.

“But we’re being very cautious,” Owusu said. “We don’t know what tomorrow’s going to bring.”

In a sense, they do. They have predicted what the next five years will look like, and it starts with the fiscal year 2021 budget, which officials describe as “status quo.”

“It means, ‘Don’t think about anything more. Reduce your budget,’” Owusu said.

With $57,624,900 in expenditures and $55,971,932 in revenue, it’s a situation Mayor Meyer was not pleased with, but something he said they would have to do, given the circumstances. That meant pulling from reserves to balance the budget.

And why was that necessary? As Owusu explained, he cannot rely on Economic Development Director Tom West and his crew to bring in 800 jobs every quarter. And as Mayor Meyer noted, insurance premium tax receipts are projected to be lower than they have been since 2017, while real estate tax revenues will be lower than they have been since 2019. Factor in a contractual increase for city workers of 2.5 percent, with a $1,000 increase per person for health benefits, and things look tighter and tighter.

In fact, in their five-year projections, the next two years will also see the city battling a deficit. But by 2023, with more of that judicious spending and no more pandemics, Covington should be back in black, and on a streak of prosperity, Owusu said.

“As you all know, it has been a very, very difficult year for us,” Owusu said. “2021 and 2022 will also be difficult. But by 2026 we will be jumping for joy.”

Some possible features of the fiscal year 2021 budget that were discussed Tuesday include:

• Four full-time Code Enforcement personnel
• $100,000 from COVID-19 funds for food assistance programs
• Sidewalk repairs
• Planning for a new City Hall
• Funding for a full-time, assistant City Clerk position
• $40,000 for capital improvements for The Carnegie
• A welcome sign for Covington on Park Drive in Devou Park.

Owusu did say these are the projections at this point in time, and that the numbers could always change if new events should occur. Mayor Meyer went on to thank the city staff for getting them so close to balancing next year’s budget.

The proposal is slated to have a first reading at the city’s legislative meeting next week.

Economic Development Agreements

Commissioners heard three proposed economic agreements Tuesday night, including:

• An agreement to provide $14,500 in financial incentives (from TIF grants) to Milburn Realty 2, LLC for the development of the three-story, 7,500-square-foot building at 422 Madison Ave. The developer plans to renovate the first floor into 2,500 square feet “for a commercial tenant seeking a small, renovated office space in the urban core,” a city memo reads. “The developer will also add eight Airbnb units between floors two and three that will share a rooftop deck.” The development team consists of Tony Milburn, Manning Construction and Work Architecture.

• A $5,466 forgivable rent subsidy incentive for property at 525 W. 5th St.

• A $4,800 forgivable rent subsidy incentive for property at 3616 Decoursey Ave.

All three items will appear on the consent agenda next week.

Paving Project Receives Bids

On April 22, the city sent out bids for the CDBG & Capital Street Resurfacing project.

After receiving three bids — Bluegrass Paving for $505,713, Riegler Blacktop for $519,465.20 and Eaton Asphalt for $529,343.31 — the city decided to award the bid to Bluegrass Paving as the low responsible bidder.

The item will appear on the consent agenda next week.

Footsteps2Brillance/Clever Kids University update

Mary Kay Connolly, Director of the city’s Early Literacy Initiative, provided commissioners with an update of Footsteps2Brillance/Clever Kids University.

Because children were sent home as part of the COVID-19 restrictions, Covington children were at an advantage — they were already using an app and a program that was helping them learn. From August to February, the children read more than 14.5 million words and 40,000-plus books.

Then Mayor Meyer got involved, and suddenly, those children who read the most would receive a monetary award. It was all a part of the Read Ready Covington early childhood literacy program, which the city kicked off in November 2018 to get young students off to a better start in school.

From Feb. 29 to April 15, the participation in the program more than doubled, Connolly said.

“We’re very excited to be so useful this year,” Connolly said, noting the program was even more useful due to the coronavirus.

The top five students were honored in a video presentation Tuesday night:

First Place ($500 award): Owen Tobergta
Second Place: Cris Perez Tomas
Third Place: Alithea Gates
Fourth Place: Micah Lewis
Fifth Place: Yubin Fosco

“It was just great to see children who are so excited about building this very powerful foundation for their success in school,” Mayor Meyer said. “Mary Kay Connolly had done a phenomenal job.”

Next meeting

The next regularly-scheduled Covington Commission meeting will be a legislative meeting held at 6 p.m., June 9, 2020. Residents are encouraged to watch it online, and send in comments beforehand.

Meetings will be broadcast live through the TBNK’s cable and streaming outlets and available at:

TBNK to watch the live commission meeting Tuesday

• City’s website (click on “latest videos” just under the photos of the commissioners

Or watch:
Fioptics channel 815
Spectrum Channel 203

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One Comment

  1. Kenneth C Meade says:

    Keep giving funds to your buddies to open bars and restaurants…way to go.

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