Property tax revenues of more than $1.5 million make up approximately half of the $3 million general fund budget projected revenue. Sales tax revenue is also projected to bring in about $680,000. Other revenue sources, such as franchise fees and development fees, make up the remaining portion of the budget.
Under the adopted budget, city employees would be eligible for a merit-based raise of up to 5 percent.
Several departments have also been restructured. The costs and time for a formerly full-time employee in utility billing will be split part-time between two departments. A work crew position was cut from the Public Works Department and schedules shifted to save the city approximately $34,000, while the Development Services Department has the hiring of a department director budgeted, with third-party plan reviews and inspection services continuing.
Under the general fund budget, the city is trying to take on $150,000 in street improvement projects but has another $150,000 in capital projects that are needed, according to Shaffstall.
The budget did not allow for major capital purchases, such as replacement of city vehicles.
Water and wastewater funds
The adopted budget also begins to separate the water, wastewater and solid waste utility service funds, which have often been treated as the same fund in prior years, according to city staff.
Staff identified the city’s wastewater fund, with a budget of $628,000, as the city’s largest financial challenge.
With a small customer base and a different billing structure than the water system, often allowing customers to have their bills capped, the wastewater fund isn’t paying for itself.
The wastewater fund also owes the water fund for years of operating transfers, a loan for the upgrades to the city lift stations and litigation expenses.
Though wastewater revenues aren’t matching the true cost of expenses, the council took a step last week toward beginning to address that issue, voting to authorize the mayor to execute a contract for a utility rate study. The council is expected to adopt a new rate structure later in the year. New rates would not become effective until January.
Similarly, the staff attempted to separate and clarify water fund accounting, which has a budget of more than $1.8 million.
“For years the water fund has paid for a blend of expenses in the Public Works Department which included general fund, wastewater fund, solid waste fund and water fund expenses,” Shaffstall wrote. “This year’s budget made a concerted effort to identify the total cost of operating a water system and distribute expenses accordingly. In several cases, personnel costs were allocated by percentage to the city’s different enterprise funds.”