By Karen Gleason
The 830 Times
City council members have taken their first look at the city’s proposed 2023-2024 budget, which leaves the city’s property tax rate unchanged from the current year.
City Manager John Sheedy and City Finance Director Alberta Barrett unveiled the proposed budget during the council’s Aug. 8 meeting.
“We’re pleased to present our proposed budget for Fiscal Year 2023-2024. It was prepared by the finance department with efforts from all departments in the city. We’re looking at our priorities in accordance with the provisions of the city charter, and the city’s annual budget outlines the city’s spending plan and priorities for our coming fiscal year, which runs from Oct. 1 to Sept. 30,” Sheedy told the council.
He turned the presentation over to Barrett, who told the council she would review some of the budget highlights.
“To reiterate, this was a collaboration with all of the city’s departments, so I want to thank all of them, their department heads and division heads, for their assistance in putting this together,” Barrett said. She also thanked the members of the city’s finance department, especially Roxy Soto, the city’s budget analyst.
Barrett first discussed the ad valorum tax revenue proposed in the budget.
“The ad valorum tax revenue proposed in this budget maintains our current property tax rate of .7070 per $100 of (property) valuation. Our certified (taxable) values were $1,849,708,614, which is almost a 16 percent increase over the prior year’s certified values,” Barrett told the council.
“That alone will generate $5,977,832 to the general fund for maintenance and operation and another $7,784,223 for interest and sinking, to pay the city’s principal and interest payments on its debt,” she added.
“With these certified values, we are maintaining (the tax) rate, because, just within a couple of months past, the city council approved a residential homestead exemption of $10,000 to all residential homeowners. We also increased the over-65 exemption from $7,000 to $10,000, and that provides a better savings to our residents than the tax rate, so that is the reason we went that direction,” Barrett said.
She also pointed out the proposed budget contains no utility rate increases, so water, gas sewer and refuse rates will stay the same.
“One of the largest revenue sources for the general fund is our sales tax revenue, and this year, we’re projecting to reach $8,448,900, which is a little over $1 million higher than, 14 percent higher than, the prior year, and we continue to see that growth. So we have included a conservative estimate $8,955,800 (in sales tax revenue) in this next year’s budget,” Barrett said.
Barrett also spent some time reviewing the pay increases proposed in the budget.
After the finance director finished her presentation, Councilwoman Alexandra Falcon Calderon also noted that last year, the city council began its budget workshop cycle in July.
Barrett replied there would be a workshop on Aug. 15 and the council could discuss the budget again during its Aug. 22 meeting.
Barrett reviewed other highlights of the budget, noting the city is proposing to issue $13 million in debt during the next fiscal year.
“Nine million of that will be for the construction of the new City Hall, $3 million will be for the renovation of the Paul Poag Theatre and then another million for various building improvements throughout the city,” Barrett said.
Councilman Jim DeReus asked about the physical size of the budget document.
“What’s missing? It’s thinner than it’s been the past couple of years,” he asked.
“We did kind of consolidate our fixed assets and our capital improvement spreadsheets, just to make it a little bit easier to read,” Barrett replied.
Barrett then zeroed in on the city’s general fund.
She said she is proposing $37,700,500 in total anticipated city revenues for 2023-2024, with total expenses estimated at $38,148,500.
“What this budget is proposing is that use $448,000 of our fund balance (to balance the budget),” Barrett said.
“When we take that $448,000, we’re proposing or projecting we’ll have a fund balance, in just the general fund, of $16,421,632. Your next allocation of that fund balance is, which is per an ordinance, where we take $1.00 from bridge fund collections and we put it in a reserve for future construction.
“So you can see in the projected, $1,353,000 and then it drops to $280,060 in this next year, because we’ve used $1.1 million of those funds for bridge expenses, for the permitting phase (for the proposed second international bridge), so that lowers that reserve we have in the general fund,” Barrett said.
“That leaves your balance on the fund balance at $16,141,572, which equates to about 5.6 months of operating expenses. Your fund balance requirement is $13,048,875, which leaves us $3,092,697 as an excess,” Barrett said.
She said though this money is typically not spent, she also made note of upcoming expenses the city needs to plan for, including $1 million for civil service as next year is a meet-and-confer and collective bargaining year for civil services employees.
“So we need to pass on the increases and benefits we’ve done for our non-civil service employees to our civil service employees,” she said.
Another $800,000 could be set aside to add new city positions in certain areas and about $1 million could be used for various capital improvements for infrastructure projects, Barrett added.
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