Last week I shared a bit about the process we use to create the City’s annual budget. This week I will provide an overview of what is included in the Recommended Budget for Fiscal Year 2020 (FY20). As I mentioned last week, under our form of government, I propose the annual budget to the City Council, based upon a community vision and strategic priorities established by the Council. The Council reviews this recommendation, conducts a public hearing, and identifies any revisions they feel necessary prior to their adoption of the budget.
What Have We Been Provided and Where Did It Come From?
Essentially all of the money we have available to deliver services comes from tax revenue or fees paid for specific services such as solid waste, parking, or securing a permit. The most significant source of revenue comes from taxes paid on real estate, accounting for nearly $88 million for the upcoming year. This is followed by revenues from taxes on personal property ($23 million) and sales ($21 million). In total, local tax revenues equate to $204 million or about 68% of all the revenue used for the annual budget. The remaining revenues come from a variety of sources, with the two most significant being intergovernmental transfers ($75 million), predominantly from the Commonwealth, and charges for services ($16 million). Once totaled from all sources, the revenue we anticipate having in FY20 to deliver our services is just shy of $300 million, nearly $8 million more than we budgeted for in FY19.
What Do We Propose Spending It On?
As in every preceding year, we propose that the vast majority of the funds available be spent in essentially the same manner. This “base budget” equates to about $291 million and is what pays for such things as policing, fire protection, teachers, libraries, and parks. Spending on education ($85.1 million) continues to be the highest priority, followed by community safety ($69 million). In addition to funding the base budget, it is necessary to increase expenditures in a number of areas just to meet inflationary increases and contractual obligations. These increases account for just over $3 million in new expenditures. It is also desirable, when possible, to enhance or expand services in key areas. The Recommended Budget includes additional funding for such purposes. Likewise, it is necessary to increase employee compensation to remain competitive in attracting and retaining the workforce necessary to deliver City services. The Recommended Budget includes around $2.5 million for this purpose, a 2.75% increase over the current year. Finally, the budget includes a series of “one-time” expenditures for items such as equipment, grant matches, costs to conduct elections, etc. These expenditures total $2.6 million.
In addition to spending on the base budget, inflationary and contractual increases, service expansion, employee compensation, reserves, and one-time expenditures, funding is necessary to continue meeting our capital needs—that is our need to maintain, enhance, and build new bridges, streets, buildings, etc. The City creates a five-year plan for capital needs to guide these expenditures. Over the next five years, it is anticipated we will need to spend $108 million on these items. Most of these expenditures will be in the form of borrowed money or debt. We will need to spend nearly $15 million in FY20 to “service” that year’s share of debt.
So there you have it, a balanced Recommended Budget: $300 million in revenues and $300 million in expenditures. This is what it takes to educate our children, provide law enforcement, fire protection, safe and clean streets, parks, libraries, social services, arts, and so much more. You can view the Recommended Budget online at the City’s website and City Council will offer citizens an opportunity to comment on the budget at the public hearing scheduled for April 25, at 7 p.m., in Council Chambers.
We are truly a fortunate community to be able to provide the resources necessary to deliver on many of the identified priorities. We may not be able to deliver everything in exactly the way all would prefer, but we can and do deliver a myriad of high-quality services that our health, safety, welfare, and quality of life depends upon.
-- Bob Cowell