Since last month’s first look at the 2014 budget a $332,000 increase in revenue provided some budget relief, said Amelia Merchant and Ann Shawver during the Monday morning briefing to city council. School funding now looks to increase by $1.2 million to almost $74 million for fiscal year 2014.
Merchant, the Director of Management and Budget, said this pass at the budget included a two percent raise for city employees. Roanoke City employees are behind the market by five percent, she said.
Outside agencies were added that brought the budget from $5.9 million to $9 million out of balance. Total revenue is now projected to be $258.1 million.
Nearly every department and some agencies had requests for additional funds. Citizens can keep up with the progress on the budget from the city’s home page website at www.roanokeva.gov.
An extensive discussion followed as the Capital Improvement Project additions exposed jeopardy of exceeding the debt policy. The debt policy stats that debt (including schools) cannot exceed 10 percent of the budget. The budget, including schools, is $330 million – 10 percent of that is a maximum of $33 million. “We are at $31.5 million now,” said Shawver.
Sixty percent of debt must be paid down over 10 years. Debt service (interest) should be limited to as close to $20 million as possible, said Shawver. “The more money we apply to debt service the less we are able to apply to other operating components of our budget,” she said.
City Manager Chris Morrill compared it to maxing out a credit card. “Just because you have it – it’s not cash it’s debt … I would never recommend bumping up to that 10 percent a year. You never know what expense might come up.” Fixing the culvert to support passenger rail is an urgent unexpected capital project for 2014 and 2015.
Shawver said she relies on the city’s advisory firm to assess the sensitivity to a possible economic decline. Accordingly with an increase in expenditures of five percent the city would breach its policy. If sequestration results in economic retraction that would put the debt policy in jeopardy as it did in 2010.
Council will have to decide on which projects need to be pushed out to later years. The policy is tight until 2018 but the $6 million preparation for passenger rail service, $7 million for Round Hill Elementary school and $16 million for new and upgraded fire stations still need funding.
Progress on the Budgeting For Outcomes teams will be presented to city council again on April 1.
– Valerie Garner