Kokomo Mayor Greg Goodnight has unveiled his latest spreadsheet on the city’s financial position, with the numbers showing a $14.5 million drop in total indebtedness since he took office five years ago.
During the same period, the city has seen an almost exactly corresponding increase in its cash position as cuts to the city’s payroll, flat budgets and the emerging post-recession economy have combined to replenish depleted city coffers.
Randy Morris, Kokomo city controller, said efficiency measures, combined with increased use of in-house labor for projects, have helped. Morris credited the Kokomo Common Council for supporting the mayor’s belt-tightening initiatives.
“The council has just been very supportive of our efforts,” Morris said. “Through these recessionary times, they’ve given us the ability to make the necessary changes.”
Shortly after former Kokomo Mayor Matt McKillip took office in 2004, an accounting error and a new state limit on local property taxes caused a sharp drop in city revenues.
The artificial limit on revenues was soon corrected, but the one-year drop created a deficit which the city didn’t climb out of until Goodnight’s first year.
To gauge how the city has been doing, Goodnight looks at the city’s cash position each Nov. 30.
That date represents an annual low point in the city’s cash flow, a time just before the city receives its second biannual installment of property tax revenue, commonly referred to as a tax “draw.” Local governments usually receive tax draws in late spring/early summer and again near the end of the year.
On Nov. 30, 2007, the city was nearly $5.2 million in the red in the funds controlled by the Kokomo Common Council. To keep the city operating, the city had to borrow from other funds and pay those funds back when the tax draw finally arrived.
Five years later, on the same date, the city was running a $9.8 million balance in the same council-controlled funds, the largest of which, the city’s general fund, is used to pay the salaries and benefits for city employees.
An increase in tax revenues, including back taxes owed by key industries, have helped stabilize the city’s finances. And there haven’t been any wild variations in revenues since the recession-marred year of 2009, when property tax collections fell by almost $5 million.
But city officials also point to decreases in the number of full-time city employees, and efficiency measures like picking up trash on one side of the street (which requires fewer trash trucks and less manpower).
From a maximum of 521 full-time employees in 2007 to about 436 currently, the city, according to Morris and Goodnight, is doing more with less.
The city also is freed from the obligation of paying about $700,000 a year in debt service for the Kokomo Aquatic Center, which was paid off in 2010. The city council saved another $1 million annually by shutting down the former Kokomo Early Learning Center.
Today, the city has no general obligation debt and no outstanding leases. All of the city’s remaining debt is tied to the city’s wastewater treatment plant, which was fully renovated over the past two decades.
Scott Smith can be reached at 765-454-8569 or at scott.smith@kokomotribune.com.
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Kokomo finances continue to improve
Total debt has dropped by $14.5M
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