Mayor reports likely fiscal-year surplus and forms ad hoc committee to consider capital uses

Mayor Doug Barnsley reported to the Prospect City Council that the city expects to end the 2024–25 fiscal year with an approximate $500,000 surplus and that the city maintains multi-million-dollar cash reserves.

In his report the mayor said the city recorded revenues above budget — including an unbudgeted increase in insurance-premium tax receipts that could add roughly $200,000 — and spending undershots in categories such as police, legal, street maintenance and solid waste. He said the city at times held at least $3.1 million in cash on hand; a later finance report presented at the same meeting referenced roughly $3.5 million in investments and liquid funds held by the city.

The mayor said an existing ordinance requires the city to reserve $1.2 million to cover the shortfall in the city's obligation to the Kentucky Retirement System (KRS). After subtracting that required reserve, the mayor said the city’s unreserved surplus totaled approximately $1.9 million and that the year’s operating surplus is likely to total roughly $500,000.

Barnsley announced an ad hoc committee to study how some of the surplus might be used and named Council Members Sandra Leonard, John Clark and Don Gibson to serve with him. He said the group’s charge is not to decide immediately how to spend the funds but to determine whether some portion should be set aside for capital projects. Possible expenditures listed in the mayor’s report included a boardwalk behind City Hall, “substantial improvements to U.S. 42” that appear in the 2022 US 42 transportation study, investigation of whether the city should own its streetlights rather than rent them, and consideration of a public–private partnership tied to development opportunities.

City finance staff later provided additional context in an accounting report that showed roughly $3.5 million invested with the Kentucky League of Cities (KLC) funds and noted unrestricted funds of approximately $2.2 million after backing out restricted pension and capital funds. The finance report said revenues came in at about 103% of budgeted expectations and that expenditures for the year were about 4% under budget.

Mayor Barnsley said he had asked the ad hoc committee to advise whether to set aside some portion of the surplus for capital projects and that any specific allocations would be made through normal budget processes.

The council did not take a vote on spending at the meeting; the ad hoc committee will provide recommendations as staff and council consider capital priorities during the regular budgeting process.