AGENDA CAPTION:
Title
Receive a Staff presentation and hold a Public Hearing to receive comments for or against Ordinance 2023-61, adopting an operating budget in the amount of $321,150,452.00 for the fiscal year beginning October 1, 2023 and ending September 30, 2024; authorizing certain adjustments to the budget with the approval of the City Manager; adopting a fee schedule; approving fiscal year 2023-2024 Capital Improvements Program Projects in the amount of $77,033,000.00; including procedural provisions; and declaring an effective date; and consider approval of Ordinance 2023-61, on the second of two readings.
Body
Meeting date: September 19, 2023
Department: Finance
Amount & Source of Funding
Funds Required: N/A
Account Number: N/A
Funds Available: N/A
Account Name: N/A
Fiscal Note:
Prior Council Action: City Council Strategic Planning and Visioning on January 26-27, 2023, Budget Policy Workshop on February 23, 2023, Budget Policy Adoption on March 21, 2023 (Resolution 2023-61R), Budget Workshops on May 16, 2023, June 29, 2023, and August 15, 2023. City Council held the first of two public hearings on the budget September 5, 2023.
City Council Strategic Initiative: [Please select from the dropdown menu below]
Public Safety, Core Services & Fiscal Excellence
Quality of Life & Sense of Place
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Comprehensive Plan Element (s): [Please select the Plan element(s) and Goal # from dropdown menu below]
☒ Economic Development - Choose an item.
☐ Environment & Resource Protection - Choose an item.
☐ Land Use - Choose an item.
☐ Neighborhoods & Housing - Choose an item.
☐ Parks, Public Spaces & Facilities - Choose an item.
☐ Transportation - Choose an item.
☒ Core Services
☐ Not Applicable
Master Plan: [Please select the corresponding Master Plan from the dropdown menu below (if applicable)]
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Background Information:
The fiscal year 2024 operating budget totals $321,150,452, which is a $23.0 million or 7% increase from the adopted budget for fiscal year 2023. The budget is balanced and meets the criteria set forth in the City’s Budget Policy Statement. The Capital Improvement Program for fiscal year 2024 includes 62 projects for $77,033,000.
City Council held a Visioning workshop in January to select their strategic goals and held a Budget Policy workshop in February to formulate the Budget Policy that was adopted in March. The strategic goals and Budget Policy established by City Council were used to create the proposed fiscal year 2024 budget, which was presented to City Council during budget workshops in May, June, and August.
Revenue Summary
This budget as submitted proposes to keep the tax rate the same at 60.30 cents per $100 valuation. The tax rate is comprised of two components, 1) operations and 2) debt. The operations component of the tax rate is 44.47 cents and the debt component is 15.83 cents. In 2022, City Council approved a local homestead property tax exemption of $15 thousand and increased the local senior and disabled property tax exemption by $10 thousand to $35 thousand. In fiscal year 2024, these local property exemptions saved taxpayers over $1.1 million by exempting $182 million of property value.
The Community Enhancement Fee is proposed to increase for residential and commercial customers. The residential rate is proposed to increase from $1.50 to $2.35 or by 56.7%. The commercial rate is proposed to increase from $5.50 to $9.00 or by 63.6%.
The proposed budget also includes the recommendations from the Citizen Utility Advisory Board (CUAB) for Water and Wastewater rates and Electric base rates. CUAB recommended a minimum of 5% rate adjustment for electric services and a 5% rate adjustment for water and wastewater services. Resource Recovery rates will increase approximately 3% for residential and multifamily services. City Council approved using General Fund capacity to cover Stormwater’s capital improvement projects avoiding a rate adjustment in Stormwater.
The proposed rate and fee adjustments will be considered separately by City Council.
Expense Summary
Public Safety, Core Services, and Fiscal Excellence is one of City Council’s strategic goals. Supporting this goal, the proposed budget includes 29 new positions to meet the demands of the City. Of the 29 new positions, 19 are for the General Fund, including:
• Public Safety - 9 (Fire - 5, Police - 3, City Marshal - 1)
• Support services - 5 (Finance - 2, City Clerk - 1, Communications - 1, and IT - 1)
• Neighborhood Enhancement - 2 (Animal Shelter - 1 and Code Compliance - 1)
• Engineering - 1
• Facilities - 1
• Development Services - 1
The remaining 10 positions are for the following funds:
• Women, Infants, and Children - 3
• Hotel Occupancy Tax - 2
• Water and Wastewater - 3
• Electric - 1
• Stormwater - 1
The budget also includes $4.4 million citywide to implement the results of the compensation study for non-civil service personnel. This will help the City be more competitive in the market, as well as attract and retain a talented workforce. The Police and Fire meet and confer agreements were approved during fiscal year 2023 and the agreed upon compensation adjustments are included in the proposed fiscal year 2024 budget.
Other budget highlights include:
• Historical restoration and preservation funding - $195 thousand
• Human Services Advisory Board funding - increased $100 thousand to $650 thousand
• New City Hall funding - $2.8 million
• Capital outlay - $5.8 million (all funds)
• Signature events funding - $188 thousand
• City hosted events funding - $60 thousand
• Museum funding - $125 thousand
• Second half of wayfinding - $500 thousand
• City branding - $80 thousand
Council Committee, Board/Commission Action:
On July 27, 2023, the Citizen Utility Advisory Board unanimously voted to recommend a minimum 5% rate adjustment for electric services and a 5% rate adjustment for water and wastewater services.
Alternatives:
City Council may adopt the budget as presented or make changes as deemed necessary.
Recommendation:
City Council approve the ordinance adopting the FY 2024 Annual Budget and Capital Improvement Program.