City budget officials began their budget discussion during a May 2 work session.

Kirsten Wavra, the deputy finance director, said said that many of the things they discussed last year as being on the budget horizon are still factors.

She said the city is still in a state of COVID recovery financially; the city is taking on additional costs from the COPS grant; potential legislative changes and tax appeals.

City Manager Greg Doyon said that the city is still trying to recover financially from COVID and replenish the fund balance to the city policy of 22 percent, since commissioners didn’t raise taxes for two years. That 22 percent fund balance equates to about two or three month’s worth of operating expenses to absorb any cash flow issues since tax revenue comes in December and June, or any unanticipated expenses.

City beginning budget process

Melissa Kinzler, city finance director, said that over the last three budget years, expenses have been exceeding revenues, due to increased costs and limitations on increasing revenues, and for the current budget, the city used federal COVID dollars to balance the budget.

Without those funds, the city would have been $1.2 million in the hole for this budget year, which runs July 1, 2022 to June 30, 2024.

With projected new revenues and expenses, the city is projecting a net revenue increase of $257,575.

Commissioners review city budget, revenues trending down [December 2022]

The city can take the inflationary factor and permissive levy increases this year, but staff hasn’t yet made a formal recommendation and commissioners didn’t indicate their leaning  on that during the May 2 work session.

If the commission were to take the full inflationary factor allowed under state law, that would equate to an estimated $451,129 in new revenue.

The permissive medical levy would be an estimated $300,000 in additional revenue, according to city staff.

The city did not take the inflationary factor or permissive medical levy in 2020 or 2021, but did use those revenue tools last year.

City budget: Key things to know [2022]

Wavra said without the CARES, federal COVID relief funds, the general fund balance is down to 8.9 percent.

She said that the city received about $10 million in CARES funds and that balance is now about $5.9 million.

She said that was received over several fiscal years and was initially in the general fund and is now in the COVID recovery fund.

Wavra said that at this point, finance staff is recommending maintaining that CARES balance in the general fund to offset the shortages they anticipate.

Kinzler said that as a general practice, it’s not idea to use reserves to balance the budget since that would likely lead to a situation when reserves are exhausted and revenues don’t cover expenses forcing the need for cuts.

Commissioners review proposed city budget, tax increases [2022]

Some of the known legislative impacts for the upcoming budget include SB 262, which prohibits cities from requiring additional licensing when the state has already issued a processional license.

That bill will result in the loss of about $79,000 in beer and wine and liquor license revenue for the general fund, as well as a loss of about $85,000 for professional licenses in the planning fund.

HB 465 allows cities to reserve three years of building permit fees and removes the duplicative building code audit to the city can hold a large reserve in the permits fund, she said.

Over the last year, city planning staff have discussed the need to look at raising planning fees to cover costs since the general fund was used to subsidize that fund in recent years.

City budget approved; work on aquatics center continuing [2021]

The city has also awarded some contacts with ARPA funds, but those projects are already running about $600,000 over budget due to design and material costs and inflation.

Sylvia Tarman, the city’s ARPA project manager, told commissioners that they’re looking at cost mitigation options for those projects.

Doyon said that if they can’t mitigate the cost, some of those projects might get bumped.

Commissioner Eric Hinebauch said he wanted staff to consider adding some of those costs to the potential public safety bond ask that commissioners have not yet voted on. That proposal would fund significant public safety infrastructure projects.

City planning to use some CARES Act funds to replenish revenue lost due to COVID [2022]

Commissioners discussed potentially sending a $21.175 million public safety infrastructure bond to the November ballot during their April 18 work session.

They have until August to meet the deadlines to get that bond on the ballot, in addition to the public safety operational levy they voted in March to send to the ballot.

Doyon said that depending on how the budget shakes out, they may be able to use some CARES funds for the priority ARPA projects to address that budget overrun.

Doyon said he’s told department heads to hold their budgets level this year, and they make “above and beyond requests” that he and the finance office review to make recommendations to the commission.

The current budget schedule is:

• departments present their budget request to the city manager the week of June 12
• city manager transmits the proposed budget to commissioners the week of June 26
• commissioners will be asked to set the budget public hearing during their July 5 meeting
• budget public hearing is scheduled for July 18
• commissioners will be asked to adopt the tax levy during their Aug. 15 meeting

The city has an online budget simulator tool that residents can use to learn about the budget and participate in the budget process.

Interactive budget tool gives citizens more information on what taxes support [2019]

The simulator is currently displaying the adopted budget for this year, which runs July 1, 2022 through June 30, 2023.

The budget simulator is available here.