September 22, 2023

A Smooth Budget for FY 2024

The development and adoption of the fiscal year 2024 budget was described by more than one participant as “one of the smoothest budget processes in recent memory.”  Between the push and pull of Council’s direction to hold the nominal tax rate flat and ongoing inflationary pressure, the budget was largely already spoken for before it even began.  Just to maintain existing service levels within those constraints left relatively little else to talk about.

Initially built around a nominal rate of $0.4473, the same as it’s been the past four years, by the time of budget adoption the rate was actually lowered to $0.4370 as a result of our final certified roll coming in higher than the preliminary estimated roll.  Besides the tax rate, the budget also fulfills Council’s other stated objectives:  to advance our strategic plan, provide the resources necessary for legal and regulatory compliance, and satisfy structural balance and minimum reserve requirements.

Speaking of inflation, the Enterprise Fund (supported by our utility bills, not property taxes) especially continues to experience rising costs.  Water and wastewater are going up 10%, and solid waste 7%.  The rates charged are intended to cover the costs of delivering these services, and nothing more.  We will soon be conducting a utility rate study, which was beyond the scope of our 2021 user fee and cost allocation study, to further refine our understanding of these costs and help ensure we’re capturing them appropriately.

Although the list is short, there was still room for some relatively modest enhancements in the General Fund, to include the continuation of the third phase of our ALPR camera network, new positions (reclassification of existing FTEs) for public safety lead communications officers, floodplain management software and a library mobile app.  Budgeted in the VET (Vehicle, Equipment and Technology) Fund are some replacement police radios and firefighter gear, equipment to begin phasing in a second EMS unit (to be staffed the following year), an ADA upgrade to the doors at the Library and a scheduled garbage truck purchase.

Being that we’re in the services business, our budgets are dominated by personnel costs.  This year we’re facing a 9% increase in our pension benefit contribution, as actuarially determined by the state municipal retirement system, and up to a 13% increase in medical benefit premiums under our current contract.  Employees will receive a 4% across-the-board cost of living adjustment, but with no additional step increase.  As with the utility rate study, the formal compensation study previously planned is now slated for this coming year.

Within the Capital Improvement Plan, which is our running list of projects for which funding decisions are made on a year-by-year basis, Council preserved the FY 2024 appropriation for our Regional Drainage Improvement Program.  Even though we’re still waiting for outside partnership and grant funding to shake loose, we felt it was important to keep our local contribution in the CIP as a policy statement of our commitment to regional drainage as a top priority.  Surface and drainage work at the Mulberry Park parking lot was pushed back to FY 2025, and Phase 2 of the Holly Street Trail project brought forward to FY 2024.  Other CIP appropriations include line items for the Public Works administration building and Library conceptual designs, various park improvements, and water, wastewater, traffic and street projects.

It's a solid budget that checks all the boxes, providing for a continued high level of services within the parameters set by Council.  That the process went so smoothly is owing not only to the realities of living within our means during a time of inflation, but also to the effectiveness of our strategic planning efforts and the degree to which staff have aligned with Council’s policy direction.  The City is in strong financial shape as we embark on another busy year ahead.