The City of Franklin released its proposed budget for Fiscal Year 2020-2021 earlier this month.
“For the first time in our lifetimes, we are faced with a global pandemic paired with a significant worldwide economic downturn, the depth and duration of which are unknown” stated Eric Stuckey, Franklin City Administrator in a press release. “In the face of these uncertain times, the City of Franklin will continue to move forward maintaining service levels, investing in our future, and enhancing our community’s competitive position. We cannot wait for national and state solutions. Instead, we must craft a budget and action plan which is both fiscally prudent and consistent in maintaining our commitment to community service.”
The 2020-21 (FY21) general fund budget is $70,221,303, which represents a decrease of 10.2 percent compared to the current budget for 2019-20 (FY20). The FY21 budget for all funds is $154,318,230 which represents a decrease of 10.5 percent compared to FY20.
Highlights of the 2020-21 Budget:
- The budget is balanced, with a planned use of reserves to maintain services.
- The budget fully complies with the Board of Mayor and Aldermen’s debt and fund reserve policies.
- Essential service levels are maintained.
- Despite significant budget reductions, there are no layoffs of existing staff. City team member salaries are frozen at this time with no market or merit increase.
- The City property tax remains unchanged at $0.4176 per $100 of assessed valuation. The Invest Franklin dedicated funding for infrastructure/transportation investment and support of City operations remains in place. The City of Franklin continues to maintain one of the lowest municipal property tax rates in the State of Tennessee.
- This budget will likely be updated later in the year as more information is available regarding the revenue impact of the pandemic and economic downturn.
Revenues:
There are four categories where revenues will decrease: sales tax ($4.1 million decrease), state shared taxes ($1.9 million decrease), alcohol taxes ($50 thousand decrease), and building permit & licenses ($200 thousand decrease). Other revenue categories of note include grants, municipal court fines/fees, and interest income will also decrease. The City of Franklin is projecting an $8 million decrease from last year’s budget. However, we will see an increase in property tax revenue and franchise fees.
Cash Reserves
The City of Franklin adopted a reserve policy that identifies a minimum 33% General Fund reserve as an important benchmark. The City will use $5.3 million in this previous budget to sustain operations impacted by the COVID-19 and the economic downturn. The City is planning to $2.8 million of General Fund reserves in FY21.
Despite the current economic challenges, the City is maintaining significant reserves to comply with BOMA policy and to protect against future economic downturns.
Expenses
The total available resources within the General Fund is $70.2 million for FY21.
Here is how the City is spending:
Employee Earnings and Benefits
The City is closely monitoring vacant positions. Departments are adjusting roles and responsibilities of existing staff to compensate for positions that are being held vacant. 27 full-time and 11 part-time positions across the organization that will be held vacant during the upcoming fiscal year. The proposed budget contains no salary increases for City
employees. The basic structure of employee benefits is unchanged from the previous year. The City will absorb the full impact of a projected 6.3% increase in healthcare premiums.
Operations
The operations expenditure category is a broadly defined category that encompasses non-personnel and non-capital activities. It includes utilities, supplies, contractual services, repairs and maintenance, and vehicle fuel. The FY21 budget amount for operational expenses is $14.2 million, a decrease of 26.9% compared to FY20.
To read more about the proposed budget and see it in its entirety, go here www.franklintn.gov/FY2021Budget.
