Metro Council Budget Committee passes plan to save most of $4 million surplus

LOUISVILLE, Ky. (WDRB) -- Metro Council's Budget Committee green-lighted a plan Thursday to save the majority of the city's $4 million surplus.

The city had previously said the surplus is a result of higher-than-expected public service corporation property taxes and non-recurring capital gains, coupled with lower-than-projected spending in some departments.

"It results from some unusual one-time revenue and also some expense savings that we were able to do," said Councilman Bill Hollander, who represents District 9 and chairs the budget committee.

The fiscal year runs from July to the end of June, so the extra money comes from the 2018-19 fiscal year, not the current one. After a long, back-and-forth discussion about dollars and cents Thursday afternoon, the committee passed a resolution saying $300,000 will be used to move up a police recruiting class from June to May. LMPD eliminated an entire class as part of the city's major budget cuts this year. The city had projected a shortfall of $25 million, blaming it primarily on higher state pension obligations.

"What we decided to do is to restore a police class quicker so that we can get more police officers on the street," Hollander said.

If the plan is approved Dec. 12 by the full council, the rest of the surplus money would be saved. About $1 million would go into a "Rainy Day Fund," which helps boost the city's credit rating. The rest of the surplus, approximately $2.7 million, would be put toward the city's growing pension obligations. That money would be allocated in $900,000 chunks over the next three fiscal years.

"It just makes smart business sense to save money when you have unexpected money," Hollander said.

Councilman Anthony Piagentini suggested the council should use the money set aside for pensions all at once, rather than breaking it up into increments.

"I'm not a fan of taking this lump sum and extending it in that way," he said. "Rather than just saying, 'Hey, we'll apply it to next year if we have a surplus the following year,' we apply that to the following year."

Hollander said the council has the option to do that if needed, but the initial plan is to spread out the money over time.

"We know we're going to have significant increased expenses going forward," he said. "Let's save some money to do that."

The full council still has to approve the plan, which will be taken up for a vote at the next meeting on Dec. 12.