Wednesday, June 5, 2019
The City Manager is pleased to submit the Recommended Fiscal Year 2020 Budget. The City Manager is responsible for the formulation and administration of the Annual Budget. The budget can be reviewed on our OpenGov transparency website here.
The Budget numbers are a best projection for revenues and expenditures throughout the Fiscal Year. Early each calendar year, the City Manager and Department Directors work with the Finance Department to evaluate the projected resources and spending needs for the coming fiscal year. The City Manager then meets with the Budget Committee, comprised of two Commission members, for review and discussion. Through an iterative process, the City Manager completes a final Recommended Budget that is presented to the Mayor and Commissioners for approval. By law, the City must adopt a budget before July 1st of each year.
The proposed Budget continues to focus on capital improvements, including expending the remaining funds from the 2015 Bond Issuance, and $315,000 in street repairs. Major projects continuing to progress are Carothers Road improvements and Riverfront Commons, and the design of US 27 South Improvements.
In the Recommended Budget, due to increases in required pension contributions, personnel costs have increased across all departments. Medical insurance continues to be a rising cost and equipment and infrastructure replacement needs are growing and have been deferred over many years due to Budget constraints. To continue to address these needs, this Budget includes the issuance of a general obligation note for improvements to city facilities. This Budget also includes a cost of living increase for non-contract civilian staff and continues to honor the increases as agreed upon by the labor union contracts.
In order to keep up with these rising costs, this Budget recommends taking the compensating rate, plus four percent for property taxes. This budget also includes the approval of an alcohol regulatory license fee of 2.5% of gross receipts from the sale of all alcoholic beverages, and an increase int he rental license fee to $75 due to increasing costs of enforcement.
The City’s major revenue streams remain Payroll, Property, Insurance Premium taxes and Occupational Licenses. Business growth in the City continues to increase, which is critical since we rely on payroll as our primary source of revenue, accounting for approximately 35% of all revenue. Our largest and fastest growing businesses continue to be P L Marketing, Kroger, Defender Direct, Divisions, Inc. Impact Sales, St. Elizabeth, DJ Joseph Co., National Band and Tag Co. Inc., I-Wireless and Nexigen Communications. Property tax accounts for approximately 14% of revenue.
Several new developments continue to be on the horizon. In Fiscal Year 19 the New Riff Whiskey Campus was completed and the Academy on 4th Residential Development is well underway. The Baptist Home is being rehabilitated for use as condominiums. Major developments announced during FY 19 include the redevelopment of Newport on the Levee, the kick off to Phase 1 of Ovation and a mixed use development at the Peace Bell Site. These three projects alone will account for $180 million in development. The completion of Ovation will approach $1 Billion in investment.
From a fiscal perspective, we have seen moderate revenue growth as demonstrated by the Amended Budget estimates showing a 3.3% increase in revenue over the Original Budget. Again this year, the City has sufficient revenues to eliminate the need for a Tax Anticipation Note (TAN). Our goals continue to be working to grow revenues, keeping expenses reasonable, focusing on safety and quality of life, and continuing to catch up on infrastructure improvements and equipment replacement.
To make comments on the proposed budget, email firstname.lastname@example.org, or attend the upcoming meetings to voice your comments. The meetings will take place on Tuesday, June 11th at 4:00PM, and Monday June 17th at 4:00PM at City Hall, 998 Monmouth Street.