By Marc Knapp
The Charleston City Council is set to vote on the city’s 2011 budget on Dec. 7, so here’s a brief summary of the budget document.
Total revenue for 2011 is projected at $122.0 million, 1 percent less than 2010.
The decrease is a reflection of a variety of factors, including:
- Lower city property taxes – down percent to $41.2 million;
- Lower business license fees – down 9 percent to $22.6 million;
- Lower S.C. government grants – down 2 percent to $13.4 million;
- Lower motor vehicle taxes – down 15 percent to $15.5 million; and
- Lower inspection fees – down 20 percent to $1.4 million.
The fall would have been greater if not for a recovery of “prior year property taxes” of $2 million, an increase of 909 percent from 2010, and higher SCE&G franchise fees, which were up 5 percent to $10 million.Total expenditures for 2011 were projected at $124.8 million, a drop of 1 percent compared to this year. The deficit of $1.8 million between revenues and expenditures is met, as in previous years, by the surplus achieved by enterprise funds.
Generally, there were no large increases in costs projected for any department, but “non departmental” showed a very large credit. The major projected increases were:
- Police, up 1 percent to $36.3 million;
- Fire, up 3 percent to $20.9 million;
- Livability, new for 2011 and spending projected at $0.68 million; and
- “Non departmental” – a credit of $3.3 million compared with a credit of $2.2 million in 2010.
Non-departmental adjustments are tricky to describe. When an employment position is allowed to remain unfilled, the department budget is not necessarily adjusted, but the non-departmental account is.Similarly with furloughs, the budget of the specific department remains the same, but adjustments are made in non-departmental ones.
Within non-departmental, the 2011 draft budget has “salary savings” of $3.8 million for 2011 compared with $2.2 million for 2010. From the presentation to City Council, the city plans to eliminate 110 positions next year.
The 2011 budget also provided a credit of $550,000 to reflect the benefits of its proposed early retirement plan. There were no savings from furloughs projected for 2011. In 2010, savings of more than $1 million were projected.
Also noted were $1.92 million for “transfers out.” When asked what this entailed, officials responded that it represents funds from the general revenues going to pay expenditures or expenses in areas outside of the general operating budget.
The largest piece, $1.63 million, is for principal and interest on the certificates of participation borrowing that paid for the “new” Lockwood building, renovation of the police station, ballpark and various city garages.
The non-garage debt (72.3 percent) is paid for by the money in the “transfer out” from the general operating budget each year.
The certificates of participation will be paid off in 2015. The other significant “transfer out” is to pay the cost of various energy savings items (third generation lights in light-intensive facilities such as garages and fire stations, and LED traffic lights, satellite technology sprinklers, etc.) that the city has put in place over time using an energy performance contract financing.
The funds transferring out ($272,294) pay for these items and are tracked directly to reductions to in the general fund in the appropriate budget lines such as different buildings electricity, water, etc., that are made possible by the energy reduction items that have taken place.
There were no surprises in the Enterprise Funds budget. Revenue for 2011 is projected at $23 million, a 5 percent increase over 2010. Expenditures are projected to remain flat at $21.2 million.
Revenues benefited from a 33 percent increase in City Market revenues and a 6 percent increase in parking revenues. Despite a 2 percent increase in City Market expenses, the surplus for Enterprise Funds jumped to a projected $1.8 million, three times that for 2010.