When the City of Danville closed the books on its most recent fiscal year earlier this summer, there was more than a bit of good news for city leaders: Total revenues taken in during the 2018-19 fiscal year increased by $4.7 million over the 2017-18 budget. That’s according to preliminary data provided by Michael Adkins, the city’s finance director.
The growth in revenues came across multiple sectors, including higher machinery and tools tax revenues, investment earnings and better than expected collection rates of delinquent real estate and personal property taxes. All told, total tax revenues were $107.7 million in the 2018-19 fiscal year, up from $103 million the year before.
All of this is good news for Danville in many ways.
First, it speaks to the diligence of City Manager Ken Larking and his staff in overseeing the municipal budget, a budget prepared based on the most conservative of expectations and managed daily with tight oversight up and down the chain of command.
The rise in revenues also speaks to the growing strength of the local economy, as evidenced by the growth in revenue from machinery and tools taxes.
According to Adkins, machinery and tools taxes brought in more than $1.6 million, 18 percent more than city leaders planned for during the 2018 budget deliberations with City Council. That one data point illustrates that businesses, both those that are already here and those thinking of locating to the city, are feeling confident about the national economy and are willing to invest in the equipment needed to make their operations more efficient and productive.
According to Adkins, the city ended the fiscal year with close to $30 million in its unappropriated surplus account. State law requires local governments to maintain an unappropriated surplus fund that amounts to at least one fifth of what’s in its general fund, the city’s operating budget. And Danville? The city’s savings equals almost 30 percent of the general fund.
For the past couple of years, City Council had to dip into that savings fund to balance the budget. That won’t be necessary this year. Not only is that something city staff should congratulate itself over, but it’s something that has real-life implications for Danville taxpayers: The fewer times a locality has to dip into savings, the better its bond rating, and higher bond ratings mean lower interest rates for the city when borrowing for capital projects, for example.
In case you were curious just how good this bit of fiscal news is, consider this: When council approved the 2018-19 budget back in the spring of 2018, it planned on dipping into savings for $3.5 million to balance the budget. Instead of a $3.5 million hole, the city realized an overage of $4.7 million. That’s nothing to sneeze at.
Not only is a tax hike less likely in the future now, but Mayor Alonzo Jones says the city is in a better position to focus resources on its top three priorities: education, reducing violent crime and growing the city’s economy.
Reaching this point required a lot of hard work on the part of City Council and staff. And they should be commended.