As we approach the coming of another fiscal year for the city, the City Council, Mayor, and the director of Finance (Mark Anderson), as well as the department heads, have been going over the 2012-13 proposed budgets. The 2012-13 tentative fiscal budget required by state code was passed and put in place at the Heber City Council meeting on May 3, 2012. This is only a tentative budget, which means it can still be adjusted by the council. The Final budget for Heber City is expected to be adopted at public hearing on June 21, 2012, if no tax increases are proposed in the budget.
To begin with, I would like to give an update on the current financial condition of the City. The city continues to have good revenue streams in the form of sales tax, building permits, fine revenue, and additional revenue from Heber Light & Power Dividends. These revenues coming in are consistent with the revenues the city received back in 2008. The city has not been in the position to fund its expenses based on current revenue sources since the recession began in 2007. This fiscal year, the city’s revenue is projected not only to meet the projected expenses, but to slightly increase as well. The Director of Finance, Mark Anderson, has even stated that he will not be proposing a property tax increase to fund the coming year’s budget.
However, the County could still adjust the city’s certified tax rate so that the city can maintain its fixed property tax revenue of $755,000/year. This would then cause your City Property Tax payment to go up, but the Heber City Council is not proposing any additional property taxes for this coming budget year. There is no need for the City Council to raise your property taxes to fund the up coming budget because of the solid revenue stream that came in from last year; and I expect that property taxes will remain the same during the coming year.
Even though the revenue stream is looking better than it has in the past few years, the council is also carefully reviewing requested additional expenses to fund the departments of the city to ensure that they do not exceed what we currently have in revenues. Personally, I approach the budget by first making sure the revenues available cover our current fixed expenses. Once all the current fixed expenses are covered, I look at what surplus revenues we have received from the past year to fund the new additional expenses the department heads and city manager are requesting. I know the amount that I feel comfortable with to fund additional expenses, and once we reach that limit, I feel the funding should stop. I do not want to put us in a position where we are forced to raise property taxes in order to fund requests that may not be necessities. I do recognize that some of the requests from the departments are legitimate needs and have been for a couple of years. But it was not until this year that we had the extra revenue to fund some of the projects and department heads’ requests. Some examples of requests have included replacing the roof on the old social hall, replacing worn out equipment, updating our computer systems, purchasing new additional equipment to maintain services of the Public Works and Parks departments, etc. The police department continues to have the need for up to date technology, more modern equipment, and new vehicles to put on the road. The cost for the City to provide for the public safety of the Citizens of Heber amounts to 43% of our total budget. This is money well spent, but as a member of the council, I have deep concerns regarding how we will continue to find funding for the increasing cost of public safety.
The Unreserved General Fund this past year reached a high of $1.5 million, which is a substantial increase from the $833,000 balance that was left in this account from last year. That’s a 700K boost in new revenues coming into the city. However, this boost was accomplished not only by increased revenues, but by holding down expenses during the 2011-12 fiscal year. The city also has over $1.5 million in its other Non-restrictive Fund Accounts for the city council to use at its discretion to fund expenses of the city as needed. As the State auditor pointed out in his audit report last year to the city, Heber City is financial stable and has very little debt.
For the fiscal year of 2012-13 the proposed tentative budget has the projected revenue totals at $ 4,731,900.00, which is about $ 74,000 more than last year. The current projected expenses for the city are at $4,731,900.00, which is about $265,000 less than last year.
The city council will use some of the extra revenue from its non-reserved general fund account to help fund the 2012-13 budget, and also in order for the city to stay in compliance with state code. State code requires that a city cannot have more than 18% in the unreserved general fund and no less than 5%. The amount from the percentages that can be held in this account are based on projected revenues that come in from Transportation Tax, Class C Road Funds and what the city is currently projecting in revenues. For the coming year, the City is projecting its revenue amount to be about $5,400,000; which means that the maximum amount the city may have in the unreserved general fund is a maximum of $972,000, and a minimum of $270,000. The council must look at reducing the $1.5 million in the non-reserved general fund in order to stay in compliance with the state code, and by doing so, it will also fund the budget for the coming fiscal year.
A few new employees will be added to the city’s employee list this coming year; namely a code enforcement officer, police patrol officer, part-time airport manager, and one public works employee.
Since I joined the city council 2 years ago, I have pushed to have a rate analysis performed on the sewer and water departments. The reason I have asked for this analysis was that no one could tell me what the actual costs were for the city to run the services. The good news is that the city has hired a consulting firm to help us understand and know what the fixed costs are to run the water department and the sewer department. This information is in the process of being compiled so the city will know more accurately what to charge for its services to its customers.
Over the past year the council has been very generous to the employees by giving them merit increases, COLA’s, and covering their increased cost in insurance benefits. The council has also funded several of the departments needed requests this year for equipment and repairs. I feel that the council has taken care of the majority of the city’s needs in this years budget with the exception of the needs of the tax payers of Heber City. Therefore, I have asked the council to use some of it remaining surplus general fund revenues to pay part of the cost of its fees the city charges for its water and sewer. This would be giving the citizens a tax break in their fees with the city.
In taking care of the needs of the city, I feel it is important to remember the needs of those who fund the city. I believe that it is only when we place the needs of the people first that we are able to build a strong, viable, and prosperous community.