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Town mulls ‘charitable gifts’ procedure
Filing process for requesting donations from Town may limit dollars, recipients from budget pool

Farragut’s Board of Mayor and Aldermen discussed creating and eliminating certain secondary funds in the fiscal year 2010 budget at a workshop Monday, May 4, at Town Hall.

The Board discussed creating a pooled fund for charitable contributions, such as those to various area schools, Farragut West Knox Chamber of Commerce and other organizations. The money, normally allocated individually, would be pooled, and granted based on an application process.

“We’ve never had a set way of doing it … once we have these organizations, there’s really no room for anyone new,” Town Recorder Allison Myers said.

“We have to start looking at how to quantify why we give so much to some organizations and not to others,” she added.

“I think that’s an excellent idea,” Alderman John Williams said.

Alderman Jeff Elliott compared the process to a [request for proposals], and also approved. The idea could include a “community” fund and a “school” fund, with unspecified dollar amounts in each.

Town Budget and Finance Director Dan Olson and Town staff presented the Board with two separate approximately $5.7 million budget proposals.

“The good news is we’ll still be in the black this fiscal year and next fiscal year,” Olson said of his budget.

However, his numbers did not meet the standard “cushion” of 30 percent of operating costs set aside as a “rainy day” fund. His beginning projections had the Town $370,000 in the black; the target was about $1.5 million.

“I think that’s a good policy. We may as well shoot for it,” Mayor Ralph McGill said.

“We can reach the 30 percent, no problem,” Interim Town Administrator Gary Palmer said.

To “chip away” at reaching that 30 percent goal, the Board discussed “zeroing out” funds such as the debt service fund, and adding the balance to the general fund.

“The debt service fund could be eliminated. We haven’t had debt for nine years,” Olson said.

Olson then told the Board revenues would fall about $1 million below budget in 2009, and the Town could expect a 25 percent drop in revenues in fiscal year 2010, mostly in state-shared

sales tax.

“I’m extremely conservative when it comes to revenue. It works. … Being conservative helps if something even more drastic happens,” Olson said of his projections.

“I have to give you what I hope is a worst-case scenario. That’s my responsibility to you.

“I hate to have such a negative attitude. It’s just real, I think,” he added.

Williams asked about the effects of stimulus money; Olson replied there would be no “hard information” on how much of a difference that would make until late summer.

McGill asked if Olson was counting the Town’s newest “big box” stores in his estimations. According to Olson, sales tax funds were not transferred to the Town in real time, and he had seen “no change yet” in the funds arriving months behind.

“I do drive around and look at parking lots. Sometimes that’s a really good indicator and sometimes it’s not,” Olson said.

Myers gave the Board the most recent sales tax numbers: local sales tax from March was $316,925.24. State-shared sales tax was about $95,796.99.

“The local is real, real good,” Olson said, adding it normally ran between $100,000 and $125,000.

Olson also brought the Board a revised copy of his budget draft.

“Something changed, obviously. These are two completely different schedules,” Williams said.

His calculations on the most changed page, a schedule for capital improvement plans, showed a mistake in expenditures of more than $2 million.

“So instead of total expenditures in the 2010 budget in this fund of $5.8 million, it would be $3.8 [million],” Williams said.

“Correct,” Olson said.

Myers also corrected Olson’s starting numbers (the actual amount of money spent in 2008) in several funds, to come in line with the Town’s most recent audit.

This meeting was a workshop only; another budget workshop will take place at 5 p.m., Wednesday, May 13, at Town Hall.


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