The Danville City Commission heard a presentation about the upcoming year’s budget at their meeting on Monday.

Finance Director Leigh Compton said the overall budget is higher than last year’s, including both revenues and expenditures. She said in the last year, revenues increased back to pre-pandemic levels, and expenditures increased partially because of inflation.

“We have substantially recovered from a lot of the revenue loss that we sustained due to Covid,” Compton said. “In most categories of revenue we exceeded what we had in the last fiscal year that was not impacted by Covid, so you have a total growth of about $5.5 million.”

General Fund revenues during Covid were below pre-pandemic totals at $17,627,904 in fiscal year 2019-2020. Revenues are projected slightly above pre-pandemic levels for this fiscal year, with projected General Fund revenues of $20,942,077.

The total budgeted appropriation for all funds is $96,315,310, which is a significant increase from the 2021-2022 budget of $69,386,650. This increase is primarily due to funding of capital projects, many of which are carried from the previous year. 

“We are projecting a cautious view moving into the spring of 2023. Careful monitoring should continue with an eye towards the potential of a recession, which is predicted. We acknowledge this risk and staff must be poised to react accordingly,” Compton wrote in the budget letter.

By far the largest revenue source is property taxes, which have increased this year. The projected fiscal year 2023 property tax revenue of $2,190,000, compared to the fiscal year 2022 budget of $2,150,000, is a 1.0% increase.

Expenses in city operations have increased over the previous two budget cycles largely because of investments in the compensation of city staff, especially in public safety. During the three previous budgets, personnel costs have increased from $12.5 million to $18 million.

“This investment was methodical and well-conceived and is based on a market competition strategy. This allowed the City to be in line early to make the change slowly over three budget cycles. Many other cities are simply applying large lump-sum amounts in one year to payroll without a clear plan other than as a reaction to market demand,” Compton wrote in the budget letter.

Several items from the budget book are as follows:

General Fund 

For the upcoming fiscal year, General Fund resources are projected to be $29,523,951 with a fund balance carryforward of $26,533,471, totaling $56,057,423.

Revenues from the General Fund consist of various taxes, licenses and fees, service revenue, bond revenue, and other miscellaneous  revenue. The largest source of recurring revenue to the General Fund comes from Licenses and Fees, with a projected total of $14,861,500 for the upcoming year. 

Appropriations for the upcoming fiscal year are projected to include $16,090,082 in operating  expenditures and $25,349,696 in non-operating expenditures, totaling $41,439,731. This results in  a total projected fund balance at the end of fiscal year 2022-2023 of $14,617,692. 

Some funding includes: 

• Continue with year 2 of the city’s 3-year compensation plan adjustments.

• Add several new positions including: Community Liaison, two Firefighters, one Certified Police Officer, and one Administrative Assistant (Engineering); and adjust minimum pay for the Communications Department.

• Continue to fund various community agencies.

• Various capital expenditures/projects.

Streetscape Fund 

The Streetscape Fund’s major expenditure for fiscal year 2022-2023 is the Main Street streetscape project, estimated at $6,500,000.

This project is to be funded by pulling down reserves from the General Fund which has been built over the past several fiscal years, rather than by debt financing.

This reserve has been built by careful and strategic spending and will not strain resources necessary for other General Fund expenditures. Total revenues projected for the Streetscape Fund are $7,002,000, with total expenditures at $7,050,000. 

Parks and Recreation Fund 

The Parks and Recreation Fund revenues are comprised of General Fund resources, program fees  (i.e. basketball, baseball, dance, etc.), rental fees, concessions sales, sponsorships, and fitness  center/pool fees.

Total revenues for the upcoming fiscal year are $9,651,500, which includes  projected bond funding for capital park expenditures. Operating expenditures for Parks and Recreation are allocated to Millennium Park ($814,332), Fitness Center ($404,102), Pool ($68,148), and Community Parks ($48,500). 

Some funding includes: 

• Add one new Parks and Recreation maintenance staff

• Various capital projects including, but not limited to:

• Aquatic Center/Parks Development

• Fairgrounds Development

• Michael Smith Park improvements

• Jennie Rogers Renovations/Site Development

Capital projects for the Parks and Recreation Fund are to be funded through debt financing. 

Utility Fund 

Utility Fund revenues are projected to total $31,096,890 for fiscal year 2022-2023. Operating  revenues of $11,374,785 include fees for water service, sewer service, tap fees, turn on fees, and miscellaneous revenue.

Non-operating revenue, projected at $19,722,105 includes interest, communication tower rentals, and various loan/bond funding.

Compared to the fiscal year 2021- 2022 budget, the upcoming year’s operating revenue is projected to increase $482,256 (4.2%). Operating expenditures for the upcoming fiscal year are projected at $11,506,529. 

The fiscal year 2022-2023 Utility Fund budget reflects the city’s commitment to funding the following goals and priorities: 

• Reclassify one Class IV Operator for the Waste Water Treatment Plant

• Reclassify one Class IV Operator to Waste Water Rehabilitation

• Capital Expenditure in water treatment and water distribution services

• Capital Expenditure in wastewater treatment facilities/services and to sewer collection and rehab services

• Investment of nearly $4 million of American Recovery Program Act (ARPA) funds in Perryville, Junction City, and Spears Creek watershed.

• Miscellaneous minor utility special projects

Capital projects are anticipated to be funded through a combination of debt financing and grants. 

The entire budget book can be seen here.

In other business, the city commission:

• Passed the second reading of Ordinance 1997, an alcohol ordinance amendment.

• Approved an architect fee for parking garage repairs in the amount of $10,500. The construction will fix a problem of water causing corrosion in the elevator shaft. City Engineer Josh Morgan assured that the elevator is still safe to use.