Current situation
FY 2023-24 is slated to end with $1.5 million less in revenue than budgeted for, according to May 15 city budget workshop presentation materials. In response to the projected revenue gap, the city implemented a hiring freeze, which will cover all but $235,000 when added to savings on expenses such as capital improvements.
According to City Manager Austin Bleess’ presentation, the revenue gap arose due to:
- Sales tax being 9% lower than the amount budgeted
- City fines being down
- Decreases to the Medicare cost share from the state
- Slowing new business growth
According to Bleess’ presentation, the FY 2024-25 budget will feature:
- An estimated $400,000 less in sales tax revenue
- A property tax revenue increase of about $0.045 due to voter-approved debt service
- A 1.91% increase to property values
- About $11.6 million in expenses for potential infrastructure projects
- A first-year expense of $100,000 to hire a communications employee
- An expense of $19,000 to add lifts to the city pool in accordance with Americans with Disabilities Act compliance
“There's some [projects] that you can get by with maybe ... pushing it around a year or two, but you're not going to be able to push them off by five to 10 years,” Bleess said.
Water and sewer rates will increase by 10%, according to the presentation, but preliminary projections place the utility fund cash balance at less than $1 million for FY 2024-25, according to Bleess’ presentation. By FY 2027-28, the utility fund balance would reach a shortfall of about $6 million.
To reduce the impact to the FY 2024-25 budget, council discussed options such as:
- Extending the capital improvement plan to a 15-year schedule
- Increasing water and sewer rates by 1% each for an additional $55,000 in revenue
City Council adopted its FY 2023-24 budget in August, as previously reported by Community Impact. The city budgeted for $29.65 million in expenses and $22.82 million in revenue, resulting in an estimated shortfall of around $6.83 million.
