Council passes budget, finance committee explores investment opportunities to generate revenue

GLASGOW, Ky. – A budget impacted by the loss of jobs and the onset of a pandemic was passed by the Glasgow City Council earlier this week, and the finance committee is searching for methods to generate revenue.

Three accounts are projected to have more expenses than revenue.

The General fund’s expected revenue in 2020-21 is $15,909,682, but the expected expenses from that fund are $16,312,878. While the estimated carryover is $3,605,425, the carryover for the next two fiscal years will be insufficient and cannot “pad” those budgets like the 2020 carryover has the 2020-21 budget.

The G.E.D.L. fund’s revenue is projected to be $3,500 but expenses are $100,000. The estimated carryover is $720,959.

The Sanitation/ Landfill fund’s revenue is projected to be $2,165,000 while the expenses are estimated to be $3,244,761.

With the insecurity of the budget, the Glasgow City Council passed the plan before the finance committee looked at it.

It wasn’t until June 16 that the committee met to discuss the budget, which was eight days after the council passed the preliminary plan.

Councilperson Patrick Gaunce cast a dissenting vote after the budget was officially passed June 22.

“I just think that we need a little more time and organization,” Gaunce said. “We’ve known this is coming for the last six months. I think if we’re going to spend the citizens’ money then we need to plan a little bit better than we did.”

Gaunce was the sole dissenting vote on the budget.

The depletion of jobs also placed the upcoming budget in a difficult position because of occupational tax collection decreases. The unemployment rate has increased in Glasgow to approximately 15 percent, according to Glasgow Mayor Harold Armstrong.

Occupational tax collections accounted for 69 percent of the budget’s revenue in 2019-20, but those projections were shifted with the onset of the pandemic and the closure of LSC Communications and Sitel.

The finance committee had discussed at its June 16 meeting to raise the occupational tax in Glasgow, but that consideration was not discussed further at a recent meeting.

The committee met June 24 to discuss potential investments the city could make with tax dollars.

Those investments would generate revenue from returns on investments. However, the city investment policy was unfamiliar to most members of the committee.

The policy, passed on Feb. 5, 1996, was dissected Wednesday by the committee and coupled with a model investment policy compiled by the Kentucky League of Cities.

“I think our current investment policy has a lot of good things in it,” said Councilperson and finance committee member Terry Bunnell. “The folks before us did a good job at laying it out.”

Noting certain language in the current policy, the committee gave direction to Stephanie Garrett, city treasurer, and Joe Lascala, finance officer, to revise the policy. The two said the revisions would likely be complete no later than September.

Members of the committee worked to explore methods of investment and necessary changes that would need to be made with the passage of HB 69, which revised local government investments.

The bill was passed by the Kentucky General Assembly and enacted on June 27, 2019.

The committee is set to meet again at Glasgow City Hall on July 1 at 5:30 p.m. to discuss potential revenue sources from investments.