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HomeMy WebLinkAboutBudget in Brief2022 Budget in Brief October 2021 through September 2022 BUDGET PROCESS Mayor’s Recommended Budget April through May The Mayor recommends funding levels for employee wage and benefit cost increases to the City Council to base the new budget on with help from the Chief Financial Officer (CFO) and staff. The Mayor holds budget review meetings for each department. In the Department Meetings, the Mayor, three members of the Council, the Department Head, and applicable Supervisors discuss and recommend the preliminary budget for that respective department. If necessary, after all departments are reviewed, the Mayor and CFO will meet with Department Heads individually or collectively in a final review of the General Fund in order to prepare a recommended list of cuts in expenditures, so that the total expenditures equal the estimated revenue to be available in that fund. City Council Budget Review and Development June through August The City Council reviews and discusses the Mayor’s recommended budget and recommends changes. The City Council then approves the Tentative Budget and Estimated Revenues, including recommended utility fee increases, and sets a date and time for the public hearing on the budget and fee increases (if necessary), which are then advertised in the local newspaper. The budget and fee increases are then presented at the hearings and further decreases (not increases) in the budget amounts can be made at that time or until the budget is approved. The fee increases are usually approved at the hearing, but usu- ally are not effective until the beginning of the new fiscal year, which starts October 1. City Council Budget Adoption September The final budget is approved by the City Council upon the third reading and adoption of the Appropriation Ordinance, which must be completed by the first week in September. Budget Highlights Total Budget: $84,497,500 up $4,541,600 from the amended 2021 budget . Operating Budget: $33,789,000. The General Fund has a $180,000 Contin- gency for unforeseen items. Street revenues (Includes Carryover): $9,737,200. $2.29 million from the Ur- ban Renewal Agency. Nearly $4.1 mil- lion from taxes and fees, including an additional $163,700 from franchise fees that was shifted from the general fund to streets. Major street projects (Sources):  Reconstruction of Chad, Angela, Mela- nie, Marianne Drive (LID 51)  Traffic Signal Upgrade-7th S/ Yellowstone (URA)  ROW (URA)/New Road (DIF) 2nd W to Sunrise  New Roundabout/RR Crossing Up- grade-Pioneer/7th S (URA)  Move Signal/Buy ROW 2 E/600 N Property tax revenues are estimated to be $5,867,100. An increase of 4 Full Time positions is included w/one each for GIS, Police Patrol, Water, and Wastewater. Utility rates are to be increased for water, sewer, and sanitation in Octo- ber 2021. Average homes will see a minimal increase of up to .7% overall. Major utility construction projects: Water facilities funded with operating reserves and DEQ loan to be finalized. Sewer line for North West side of city. Airport Relocation will continue to be considered and we anticipate beginning the environmental study at the comple- tion of the feasibility study. Will continue to implement new Finan- cial Software package Tyler Munis. City plans to begin to build a Fiber Ring to connect city assets using Fed- eral Grant Dollars from the American Rescue Plan Act (ARPA). THE CITY’S FUNDS EXPENDITURES (Excludes Contingency) & REVENUES - CITYWIDE The accounts of the City are organized into funds. A fund is a group of related accounts used to control money that has been designated by the City Council or by State law for specific activities or objectives. About 75 percent of the City’s revenue is dedicated for a specific use. A dedicated fund means, for example, that the city may not raise water bills to pay for Recreation Programs. This also means that, of the City’s $84.50 million budget, most of the flexibility in spending occurs only with the City’s $20.78 million General Fund budget. EXPENSES Public Works The Public Works Departments account for 38.8% ($32.83 million, most of which is for capital projects) of the City’s total budget. This budget funds 49 full-time positions. The main tasks of Public Works include: offering safe transportation by maintaining streets and pathways; offering high- quality drinking water by managing the water and sewer systems in the city; collecting and disposing of garbage and recycling, and overseeing various city construction projects. Public Works includes the Sanitation, Water, Wastewater Treatment and Collections, Building Maintenance, Streets, Shop, and Engineering Departments. Administrative Departments The Administrative Departments account for 5.2% ($4.39 million) of the City’s total budget. This budget funds 30 full-time positions. The adminis- trative departments include: Mayor & Council (the Council is part-time), Customer Service, Financial Management, Human Resources, Information Technology, Economic Development, Legal, Geographic Information Sys- tems, and Planning and Zoning. The general fund contingency and other miscellaneous budgeted amounts are also included in this total budget. Building Safety Department The Building Safety Department accounts for about 1% ($861,200) of the City’s total budget. This budget funds 6 full-time positions. This depart- ment services building permits and inspections. Parks, Recreation, Golf, and Cultural Arts These Departments account for 4.4% ($3.72 million) of the City’s total budget. This budget funds 10 full-time positions and includes some budget for construction and remodel of facilities in addition to the budgets that provide for the maintenance and operations of the facilities and programs within these departments. REVENUES Property taxes of $5,867,100 is a major source of revenue for the City. Of the total property tax bill you pay each year, only 25.7% of the total goes to fund the services provided by the City. See page 4. Fund Balance Carryovers included $3.4 million in operations, which included $686,800 in the general fund and $1.46 million in the building and safety department, and some smaller amounts in other operating departments. The Fund Balance Carryover for Capital Projects/ Purchases was $2.73 million. The largest carryover was in the Street Department. There was also a carryover in the Fiber Initiative Fund of $3.18 million that was from the ARPA federal monies received last fiscal year. These funds are safely invested until used. State Shared Revenue of $4.17 million is money that comes from the State of Idaho as a share of sales tax, gas tax, and liquor tax. The City’s share is calculated on a different formula for each type of tax, using population, property valuations, and other factors. FUND TRANSFERS & SUBSIDIES Transfers from one fund to another. For example, the Wastewater Capital Reserve Fund will transfer money to a construction fund to do a sewer project. Transfers must be budgeted, but are not a cash increase or decrease overall. Police, Fire, and Ambulance The Police, Fire, and Ambulance Departments account for 12.5% ($10.56 million) of the City’s total budget. This budget funds 43 full- time Police officers and staff, and 21 Fire and Ambulance personnel. Madison County Ambulance District and Madison County Fire Protec- tion District share in the funding of the Fire and Ambulance services with the City of Rexburg, which provides some of the most efficient and effective funding of these services in the State of Idaho. CAPITAL IMPROVEMENT PLAN The fund where the City has the most discretion in spending is the General Fund. The major sources of funding include property tax, state shared sales tax, and administrative overhead charges to other funds. The General Fund Budget is $20.78 million, which is about 24.5% of the 2022 citywide budget. This percentage was much higher because of the ARPA grant for $6.1 million that is in the budget, but transferred to the Fiber Initiative Fund. Below is a more detailed look at the General Fund. All revenues are generally very limited; therefore, increasing funding on one project or department will usually require reducing funding for others. Every year, the City adopts a Capital Improvement Plan for the next five years. Capital Improvements include any one-time expenditure over $5,000 in the form of equipment or construction. Major utility construction projects include the continuation of the major upgrade to our water facilities. The water project will provide needed production, storage, and delivery capacity to meet the current water demands and future water demands as our population grows. The water up- grades will be funded with a combination of operating reserves and a loan from the Department of Environmental Quality of up to $11,100,000, which includes principal forgiveness of up to $2,211,300. We project to spend over the $11,000,000 on the water improve- ments ($1.5 million in fiscal year 2022) and complete the project by the end of Fiscal Year 2022. The sewer operating fund anticipates spend- ing $4 million for a gravity fed sewer line and lift station to provide improved collections and expand capacity for the North West side of the city. The contributions for the sewer line project are still being determined and will include claw back fees to be paid by future development and contributions from other cities that use that infrastructure as well. The Airport Environmental Assessment for $200,000 is in the budget and should begin and would not begin until the Feasibility Study is com- plete and permission to move forward has been granted by the FAA. These projects are funded approximately 90% by the FAA, up to 5% by the State of Idaho, and the rest by the City and the County. The City is setting aside reserve funds to meet their portion of any match if a final decision to relocate the airport is made. The city projects to have $989,000 of reserve set aside by Fiscal Year 2022. The budget includes a transfer to a reserve fund from the general fund of $400,000 to continue saving for a future municipal building and police station. The city projects to have $800,000 of reserve set aside by Fiscal Year 2022. The City anticipates continuing to develop new parks and has a budget of over $460,000 in the Parks Impact Fund to do so. Several large projects started in fiscal year 2021 will be completed in fiscal year 2022. The City has budgeted $75,000 to hire a consultant to determine the desire of our community to construct a Recreation Center with indoor aquatic amenities. The City/consultant would also explore possible funding options, including a Recreation District that could be considered. Currently the City has no General Obligation Bonds nor any other general obligation debt outstanding. In May 2020, the City privately placed the December 2010 issued Sewer Revenue Bond at an interest rate of 1.15% (was an average of 3.2%), which will save the sewer fund approximately $309,460. The new loan will be paid off in 2025 and will continue to be paid from monthly sewer user revenues and new construction capacity fees. The current balance owed is $3,115,000. The City has no more outside warrants for Local Improvement Districts (LID), but has financed LID’s internally over the last few years. LID’s are not a general obligation of the City, but are a lien on individual properties for needed improvements that have been made on or next to those prop- erties. The City usually creates an LID each year to support needed private improvements, such as sidewalks and curb and gutter, along a street that needs other public improvements. The City received in 2016 a DEQ loan for water upgrades at 1.75% interest for up to 30 years and a total repayment of up to $8,888,700. GENERAL FUND DEBT SERVICE AND BONDS PROPERTY TAX BREAKDOWN & COMPARISONS Your property tax dollars paid to the City of Rexburg are generally dedicated to Police and Fire services. The total estimated property tax for the City in fiscal year 2022 is $5,867,100. The city portion of a residents total tax bill is typically 25%. According to the Association of Taxpayers in 2019, the average of the total in Idaho was as follows: Cities (26.5%), Counties-including ambulance district, roads, and mosquito districts (35.4%), Schools (30.5%), Library (1.5%), and Others (6.1%). It is important to note that the City of Rexburg has a very high percent of tax exempt properties as well. Here are some comparisons of the 2021 levies (received in FY 2022) with other entities below. The City charges for utilities: water, sewer, garbage/recycling and community safety lighting. In this budget, utility rates for an average resident home will increase about .7% or $.78 effective 10/1/2021 If you have any questions about any of the material presented in this brochure, please call the Mayor or Chief Financial Officer at 208-359-3020 or email us at finance@rexburg.org or visit or write us at 35 North 1st East, Rexburg, Idaho 83440. For more information you can also visit us online at www.rexburg.org.