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HomeMy WebLinkAboutBudget in Brief New Format2023 Budget in Brief October 2022 through September 2023 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 esti- mated 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 usual- ly 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: $84,631,200 up $1,502,400 from prior year Operating Budget: $33,964,000. The Gen- eral Fund has a $342,700 Contingency for unforeseen items Street Revenues (including Carry-over): $9,742,900. Increase (24%) in highway user funds (fuel taxes) over the prior two years. The Urban Renewal Agency (URA) is budget- ed to contribute $780,000. Major reconstruction street projects include the following: • 1st E (2nd N-2nd S)/ Center Street—1st N to 2nd N and 1st S to 2nd S (LID 52) $2,787,600 Major new street construction projects include the following: • E. Parkway ROW/Bridge Design-7 N to Barney (Federal Grant/DIF) $762,000 • 7th S/Yellowstone Railroad Crossing Upgrade (URA) $780,000 • Traffic Signal Completion-12th W and University $200,000 • Storm Water Improvements-Main Street Interchange $100,000 • Seal Coat/Chip Sealing $220,000 Water/Wastewater Projects: • 12” water line extension Hidden Valley $730,000 • New Well, Building, Booster #10 for water $1.2 million • Sewer Headworks $300,000 • Replace Gravity Fed Sewer Line NW side of city $6.2 million URA (35%) and City (65%) funded projects near 2nd East and Moody Road: • Extended Water/Sewer Services 2nd E • Sewer Lines back to WWTP/Oversizing $2,281,000 • Sewer Lift Station $500,000 • Water Lines/Oversizing $150,000 Property tax revenues $6,236,000. An increase of 2 Full Time positions in Water and Streets/Sanitation. Utility Rates to increase in water, sewer, sanitation in October 2022. Average home to increase 6.3% overall. Complete Fiber Ring buildout to connect city assets THE CITY’S FUNDS EXPENDITURES & 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 80 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 $84.63 million budget, most of the flexibility in spending occurs only with the City’s $16.95 million General Fund budget. EXPENSES Public Works The Public Works Departments account for 42% (35.2 million, most of which is for capital projects) of the total budget. This budget funds 47 full-time positions. The main tasks of Public Works include: offering safe transporta- tion by maintaining streets and pathways; offering high-quality drinking water by managing the water and sewer systems in the city; collecting and dispos- ing of garbage and recycling, and overseeing various city construction pro- jects. Public Works includes the Sanitation, Water, Wastewater Treatment and Collections, Building Maintenance, Streets, Shop, and Engineering De- partments. Administrative Departments The Administrative Departments account for 14% ($12.2 million) of the total budget. This budget funds 26 full-time positions. The administrative depart- ments include: Mayor & Council (the Council is part-time), Customer Ser- vice, Financial Management, Human Resources, Information Technology, Economic Development, Legal, Geographic Information Systems, and Plan- ning and Zoning. Fiber is also included under this category ($6.7 million). 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% ($970,700) of the total budget. This budget funds 6 full-time positions. This department ser- vices building permits and inspections. Parks, Recreation, Golf, and Cultural Arts These Departments account for 7% ($5.8 million) of the total budget. This budget funds 10 full-time positions and includes some budget for construc- tion and remodel of facilities in addition to the budgets that provide for the maintenance and operations of the facilities and programs within these de- partments. REVENUES Propertuy The City relies on many different revenue sources as shown below in the Revenue Graph. We often times will have to save up for capital projects and include that in the budget as a fund balance carryover. This budget includes over $12.3 million in fund balance carryover. Fund Balance Carryover in the general fund included $773,400 to bal- ance the general fund. Property tax revenues are certified at $6.2 million for the city general fund. The current city property tax levy rate is still one of the lowest for most cities in SE Idaho and other similar size cities. A portion of the increase is coming from new construction ($107,048) and a portion from the expiring URA Washington District ($82,087). Sales tax increased significantly to $6.6 million in large part to our high- er census numbers. FUND TRANSFERS & SUBSIDIES Transfers occur in the budget with a an expense or revenue that moves resources from one fund to another. For example, the Wastewater Capital Reserve Fund will transfer money to a construction fund to do a sewer project. Budget Fund Transfers are not a cash increase or de- crease overall. Fund Transfers totaled about 20% of the overall budget. Most general fund transfers are also subsidies for services provided. Police, Fire, and Ambulance The Police, Fire, and Ambulance Departments account for 16% ($13.3 million) of the total budget. This budget funds 41 full-time Police offic- ers and staff, and 25 Fire and Ambulance personnel. Madison County Ambulance District and Madison County Fire Protection District share in the funding of the Fire and Ambulance services with the City of Rexburg. 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 $16.95 million, which is about 20% of the citywide budget. 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 reviews 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 pro- duction, storage, and delivery capacity to meet the current water demands and future water demands as our population grows. The water upgrades will be funded going forward from reserves. Included in the water budget is a 12” line extension through Hidden Valley area ($730,000) and well #10 building and booster construction for $1.2 million. Included in the fiscal year 2023 budget is $300,000 for the Wastewater Treatment Plant Construc- tion Fund. Also included is $6.2 million for replacement of a gravity fed sewer line and lift station and the addition of a pressure line to provide im- proved collections and expand capacity for the Northwest 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. Revenue contribu- tions in the budget of over $3.4 million are included for this project. The Airport Environmental Assessment for $300,000 is in the budget and will not begin until the Feasibility Study is complete 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 $1,012,500 of reserve set aside by the end of Fiscal Year 2023. The budget for capital improvements at the Romance Theatre includes new wall lights/chandeliers ($33,000) in the auditorium, HVAC Set aside ($10,000), and Baseboards and floor repair ($10,000). The Tabernacle capital budget includes restoring the towers/replacing windows on tower ($40,000), Masonry/repointing of the building ($605,000), upgrading the lighting/sound system ($80,000), and a few other smaller capital projects. The water Department plans to complete construction of a new building ($350,000). Sanitation plans to finish a new shop ($500,000) as well and purchase an additional garbage truck. The city continues to set aside $400,000 per year in savings for a future municipal building and police station. The city plans to complete the buildout of a Fiber Ring to connect city assets. The fiber construction expense budget is just over $5.94 million. In May 2020, the City privately placed the December 2010 issued Sewer Revenue Bond at an interest rate of 1.15% (prior rate 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 $2.35 million. 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 proper- ties. 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. The loan currently has a balance owing of just over $7.4 million 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 general fund is $6.2 million. 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 (27.0%), Counties-including ambulance district, roads, and mosquito districts (35.8%), Schools (28.1%), Library (1.6%), and Others (7.5%). 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 budg- et, utility rates for an average resident home will increase about 6.3% or $7.05 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.