February 5, 2007 - Mayor Bill Haslam told
City Council members today that the city has had a strong financial
performance for the first half of fiscal year 2006-2007 and he expects
that to continue through the remainder of the year.
"We are doing well as a city financially," Haslam said
in opening the morning-long budget retreat for council members and
directors of various city departments at Ijams Nature Center. "The
numbers you are getting ready to see are good numbers."
also told the group that the city essentially has some extra money
in savings and asked council to amend this year's budget to allocate
about $4.9 million on much-needed projects ranging from flood control
efforts along First Creek in North Knoxville to paving projects
across the city.
According to a presentation by Jim York, the city's deputy finance
director, Knoxville should finish the fiscal year in June with a
General Fund Balance of $36.4 million - up from $34.7 million last
The General Fund balance has nearly doubled since 2004.
Haslam said the city has focused on controlling expenditures while
trying to enhance revenues and the effort has paid dividends. He
also credited a strong economy with helping the city's financial
"I think things are going well with the city right now,"
Haslam said. "We set a plan that is working and I think we
stay with it."
In addition to the increase in revenues the amount of the city's
debt is falling.
"We've been taking off debt rather than taking on new debt,"
York told council members.
Because of the city's good financial condition Haslam asked council
to amend this year's budget to add money to both the general and
capital budgets to pay for projects.
He likened Knoxville's situation to that of a person who has a
little more than expected in their savings account and a leaky roof.
"If you have money in your bank account and the roof is leaking,
then you need to fix the roof," he said.
Haslam asked council to consider putting back $300,000 in the budget
that was taken out last year so that performance raises for employees
could be restored.
He also asked council to consider adding the $4.9 million for capital
Those improvements include:$1 million to begin correcting sidewalk problems on the
100 block of Gay Street that stem from the street being raised decades
$2 million to start correcting flood control issues along
First Creek in North Knoxville.
$900,000 for developing infrastructure for the South Knoxville
Waterfront Development project.
$1 million for additional paving projects in various parts of
Haslam said that if the city doesn't spend the money on those projects
now it might end up spending a lot more on them in the future.
The mayor also reported that the new downtown cinema is on track
to open in early June.
But he also told council that while the city is in good shape it
also faces some upcoming challenges.
Those include spending an estimated $700,000 in computer upgrades
to meet federal government requirements, concerns that the city
could lose certain federal grant monies; the ongoing effort to build
a new transit station; developing the ambitious South Waterfront
project where development interest is running even faster than anticipated;
and trying to rein in skyrocketing health insurance premiums.
Projections also indicate that the city's expenditures will begin
to exceed its revenues around 2011 if current trends don't change.
Haslam said the city would work very hard on all the issues it
The budget process for fiscal year 2007-2008 is currently underway
and budget hearings are set for April 2-4. The mayor expects to
submit that budget on April 27.
"I am very encouraged and optimistic about where we are financially,"