On Tuesday, the City of Berea will take a final vote on the budget for fiscal year 2021-2022, a spending plan that continues to set money aside for future projects while also making a major investment in retirement benefits for the city’s first responders.
Here are six things to know about the City of Berea’s 2021-2022 budget, which takes effect on July 1.
- Funding of hazardous retirement duty benefits for police officers and firefighters will cost $487,014, which will be offset by the fact that three police officer and two firefighter positions will be left vacant. Officials are hoping the city will also realize long-term savings if the police and fire departments can retain more personnel and thus spend less on recruiting and training.
- Municipal Road Aid funds from the state continue to decline, down to approximately $278,000 this year. That means the city will have less money to repair state roads within city limits. The funds are derived from the state’s tax on gasoline.
- Tourism continues to invest in community projects while reducing long-term costs. The Berea Tourism Commission has budgeted $250,000 for the renovation of the Tolle building, as well as $60,000 for the Ellipse Street shared use path. To cut costs, the commission voted to pay off loans for the Tolle Building and the Berea Hotel for approximately $631,000, realizing annual savings on interest. Signs of an improving economy have also caused officials to project an increase of tourism revenue in the next fiscal year by $210,000, or 37 percent.
- More federal money could be on the way. The current budget does not take into account federal funds from the American Rescue Plan Act of 2021, as they have not yet been received by the Kentucky Department of Local Government. Berea City Administrator David Gregory noted in his letter to the council the Kentucky League of Cities federal funds coming Berea’s way for fiscal years 2021 and 2022 could be as much as $4,151,082.
- Overall, the spending plan is calling for General Fund Revenues of approximately $12.5 million, down approximately $1.5 million due to a reduction in intergovernmental revenues. Occupational license fees and other revenues are projected to be up from 2020-2021, in which there was a COVID-19 induced slowdown. Those revenues could be as high as $8.3 million, according to estimates.
- Spending reduced $2 million. Projected budget expenditures are $13.5 million, a decrease in $2 million in budgeted expenditures compared to last year. In addition, the city will be putting more aside as a hedge against a future economic downturn and to save for future capital projects. The city’s fund balance reserve is projected to increase from $2.7 million to $3 million, which will help the city be prepared for a possible economic crisis, and over $3.4 million is set aside for the Capital Sinking Fund for future projects.
- Challenging times ahead. City Administrator Gregory noted department heads and administration officials continue to find ways to operate the city more efficiently, but that financial challenges may lie ahead for the city in the form of pension, insurance and health care costs, combined with the need to provide services to a growing population.
Check out the details of the Berea city budget at:
Produced by the City of Berea Finance Department, department heads, and the administration, the 2021-2022 budget plan gives citizens and city officials an unprecedented amount of history, detail, and information about the city’s financial status.