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Proposed FY 06-07 Budget Memo
Submitted by City Administration on Tue, 02/14/2006 - 9:42am.
City Manager
A copy of the Notice of Public Hearing for the Budget Estimate (scheduled for March 2, 2006) is available as a PDF document.
February 2, 2006
TO: Mayor and City Council
FROM: Jeff Schott, City Manager
RE: Fiscal Year 2006-2007 Proposed Budget
The proposed budget for Fiscal Year 2006-07 is herewith submitted for your consid-eration.
The proposed budget will be reviewed at a special City Council work session on Saturday, February 11, 2006, beginning at 10:00 a.m. Additional budget review meetings may be scheduled as necessary. The City Council’s budget hearing is scheduled for March 2, 2006, at 7:00 p.m.
I. OVERVIEW
A. Budget Goals
On November 30, 2005, the City Council established the goal that the FY 06-07 city budget should not increase property tax payments for the typical homeowner by more than 3.5%. The approved budget increases such taxes by only 0.5%.
The City Council also established a goal of maintaining a minimum General Fund cash balance of 35% of expenditures and transfers out. The approved budget provides for an ending cash balance of 35.9%.
B. Budget Objectives
The budget has been developed to accomplish the following longstanding budget objectives of the City of Marion:
1. Maintain the current level of services and operations.
2. Address service, operational and infrastructure needs generated by the community’s growth.
3. Maintain adequate levels of cash reserves in all funds.
4. Vigorously explore alternatives for providing equivalent services more effectively.
5. Utilize non-property tax revenue sources where appropriate.
6. Assure that personnel, operating and capital costs are financed from appropriate funding sources.
7. Assure compliance with the City’s Financial Policies.
C. Budget Uncertainties
For the last several years, I have remarked that development of the upcoming year’s budget had been difficult due to a variety of uncertainties. The FY 06-07 budget is certainly no exception. By law, the city budget must be certified to the County Auditor by March 15. With public notice of hearing requirements, the proposed budget must be submitted to the City Council by early February. It is quite possible that any or all of the items listed below may significantly impact the proposed FY 06-07 budget.
1. Labor Negotiations – Personal service costs (wages and benefits) account for over 75% of General Fund expenditures. At the time of preparation of the proposed budget, negotiations are on-going with all three of the city’s bargaining units. The ultimate disposition of these negotiations is clearly unknown at this point.
2. Health Insurance Costs – Final health insurance rates for FY 06-07 will not be received until April or May. The city’s third party insurance administrator has provided projected rates for “illustrative purposes only”, which have been incorporated into the proposed budget. Final rates could vary significantly from the “illustrative” projections. Furthermore, health insurance issues are a significant element of the labor negotiations referenced above.
3. Fuel and Utility Costs – The city currently spends over $200,000 in vehicle operating costs (fuel and oil) and almost $400,000 in utilities per year. Commodity prices related to these expenditures continue to be quite erratic. There appears to be little likelihood this trend will change in the foreseeable future.
4. IPERS – Actuaries have identified a long-term gap between assets and liabilities in the state-administered IPERS retirement program for public employees. The 2005 Legislature was expected to address this issue but took no final action. It is expected that the 2006 Legislature will again take up this issue. This entire issue is still up in the air and could very well change before the start of the next fiscal year.
5. Facility Costs – The proposed budget includes facility costs for a full year for the new Lowe Park Art and Environment Center and for three-fourths of the year for the new City Hall. The actual utility, maintenance, operations and related costs for these will not be known until the facilities are occupied.
6. State Budget – Although the state’s financial outlook has improved over its dire condition of the last several years, it still remains rather precarious. It is not known what actions may be taken by the legislature to address this situation and what impacts such actions might have on local governments.
7. National/International Events – The attacks of September 11, 2001, and their aftermath provided clear evidence that national and international events can significantly impact city governmental operations and budgets. The financial projections contained in the budget are based on current situations and forecasted trends. Major events, such as war or terrorist acts, can wipe out all such assumptions.
D. Rollbacks
1. Residential
State-imposed rollbacks significantly affect the city budget. In FY 06-07, residential properties (which account for over 75% of Marion’s tax base), will receive a 5% “equalization” increase and a 45.996% rollback, result-ing in a net increase of 0.7% in taxable assessed valuation as shown below:
Residential property per $100,000 of Fair Market Value as of January 1, 2004:
NET TAXABLE VALUATION
PER $100,000
FY 06-07 with Rollback and Equalization $ 50,711
FY 05-06 with Rollback (No Equalization) $ 50,358
FY 04-05 with Rollback and Equalization $ 50,925
2. Other Real Estate Classifications
The FY 06-07 valuation for commercial real estate includes a 99.15% rollback compared to 100% in FY 05-06, resulting in a reduction in taxable valuation of 0.7%.
Industrial and agricultural real estate remain at 100% valuation.
E. Productivity Improvements and Cost Savings Recommendations
All departments were encouraged to identify practical and achievable ways to enhance productivity and/or obtain cost savings in their budget requests. Each proposal was carefully evaluated, with 50 items incorporated in the budget. These recommendations are listed in Exhibit A.
II. PROPERTY TAX LEVY
A. Assessed Valuation
The proposed budget is based upon an estimated net taxable assessed valuation of $889,039,169 ($900,483,278 for debt service purposes). This is an estimated increase of $49,942,303 (6.0%) over FY 05-06. This growth in assessed valuation is fundamental to Marion’s ability to provide continuing services.
B. Property Taxes
The proposed budget calls for a decrease in the property tax levy of $0.033 (0.2%). As detailed in Section II-C, the net impact of this levy to a typical homeowner is an 0.5% increase in city property taxes payable compared to FY 05-06. This proposed increase is well within the budget goal as established by the City Council.
The breakdown of the property tax levy is shown below:
Proposed Amount Amount
FY 06-07 Levied FY 05-06 Levied
Fund Levy Rate FY 06-07* Levy Rate FY 05-06*
Regular 8.10000 $ 7,201,217 8.10000 $ 6,796,685
Ag Land 3.00375 6,888 3.00375 6,875
Tort Liability 0.43470 386,466 0.43118 361,802
Transit 0.14685 130,554 0.14574 122,294
Civic Center 0.13500 120,020 0.13500 113,278
Library 0.04000 35,562 0.04000 33,564
Trust & Agency 3.30645 2,939,560 3.15317 2,645,815
Debt Service 1.79225 1,613,893 1.98342 1,690,963
TOTAL
Regular 13.95525 12,427,272 13.98852 11,764,401
Ag Land 3.00375 6,888 3.00375 6,875
TOTAL TAX REVENUE $12,434,159 $11,771,276
*Property tax revenues include Utility Tax Replacement
C. Tax Impact
The net impact of the proposed tax levy on various classes of real estate is as follows:
Value
After
Rollback/ Tax City Tax Change
Equalization Levy Payable %__
Per $100,000 Residential Value
FY 06-07 50,711 x 13.95525 = $ 707.68 0.5%
FY 05-06 50,358 x 13.98852 = 704.43
Per $100,000 Commercial Value
FY 06-07 99,150 x 13.95525 = $ 1,383.66 -1.1%
FY 05-06 100,000 x 13.98852 = 1,398.85
Per $100,000 Industrial Value
FY 06-07 100,000 x 13.95525 = $ 1,395.53 -0.2%
FY 05-06 100,000 x 13.98852 = 1,398.85
D. Analysis of Levy Funds
1. General – Regular - This levy comprises 74.1% of the city’s General Fund revenues (exclusive of transfers-in). The state limits this levy to a maximum of $8.10. The proposed budget continues the full use of this levy. Due to the $8.10 limit, the revenues generated by this levy can only increase through growth in assessed valuation.
2. General – Agricultural - Agricultural land and buildings located within the city limits are taxed at a special rate. The proposed budget continues the $3.00 maximum levy on this class of real estate.
3. General – Tort Liability – This levy covers the city’s general insurance, self-insurance, deductible and tort liability expenses. The proposed budget calls for a slight increase of $0.003 in this levy.
4. General – Transit – This levy finances fixed route, paratransit and neigh-borhood transportation bus services in Marion. The proposed budget calls for basically no change in this levy.
5. General – Library – This is a special $0.04 levy approved by referendum in 1989. Proceeds of this levy are used to purchase books and other library materials.
6. General – Civic Center – The Iowa Code authorizes a levy up to $.135 for operating and maintaining a civic center owned by the city. The proposed budget takes advantage of this levy to partially fund the operation and maintenance costs of the Art and Environment Center and City Hall.
7. Trust and Agency – This levy is used to pay for certain designated employee benefits (police/fire pensions, FICA, IPERS, group insurance, workers compensation and unemployment). Due primarily to increases in heath insurance and IPERS rates, (described in Section IV-E), the proposed budget calls for a $0.153 increase in this levy.
8. Debt Service – This levy pays for principal and interest on the city’s bonded indebtedness. The proposed budget calls for applying available cash balance from early pay-offs of special assessments to reduce the FY 05-06 levy. As a result, this levy is proposed to decrease by $0.191.
III. NON-PROPERTY TAX REVENUES
Non-property tax revenues account for less than 16% of General Fund revenues. Significant aspects of the proposed FY 06-07 budget include:
A. Building Permit Revenues
Building permits have been an important General Fund revenue source in recent years. It is impossible to predict the level of construction activity 6-18 months in advance, but the proposed budget anticipates slightly less robust development in FY 06-07. The proposed budget projects FY 06-07 building permit revenues at $450,000 (compared to Estimated FY 05-06 of $525,000 and Actual FY 04-05 of $592,022).
B. Fees
The city’s fees/charges for services are carefully reviewed and evaluated each year. The proposed budget calls for adjustments in the following General Fund fees/charges for service: baseball /softball programs (for ball field maintenance), cemetery burial charges and liquor license inspections.
C. Interest Earned
With the recent run-up in interest rates, General Fund interest earnings are projected to increase from $194,100 budgeted in FY 05-06 to $246,200 forecast for FY 06-07.
D. Ambulance
As part of the effort to assure the financial stability of the regional area ambulance agency, the proposed budget projects a reduction in the Agency’s con-tribution for housing an ambulance at Fire Station No. 2 from its current level of $35,000 to a cost directly attributable to leased space and actual operation and maintenance cost. Because of its financial impact, this change is being implemented over a three-year transition period. The projected funding level for FY 06-07 is $22,500.
E. Transfers In
To reflect the significant amount of time devoted by the Engineering Depart-ment to storm water and drainage issues, the proposed budget calls for a $15,000 transfer from the Storm Water Management fund to the General Fund to help cover engineering costs related to this activity.
F. Intergovernmental Revenues
In FY 03-04, the state permanently eliminated most of their local government assistance programs. The continuing impact on the city’s General Fund is dramatic:
FY 03-04
General Fund
Program Revenue Loss
Consolidated state payment $ 230,000
Personal property tax reimbursement 39,000
Bank franchise 30,265
Utility tax replacement 32,504
Homestead credit reduction 6,453
Monies and credits 3,900
TOTAL $ 342,122
Additional revenue cuts to in the Debt Service and Trust and Agency Funds result in an estimated city-wide revenue loss of almost $375,000.
IV. MAJOR BUDGET PROPOSALSA. Accomplishment of Budget Objectives
To accomplish the City of Marion’s budget objectives (as listed in Section I-B), there is an inherent conflict between meeting the service needs of the com-munity and assuring compliance with the city’s financial objectives.
Under these conditions, difficult decisions have to be made. In order to achieve the financial objectives, proposals to meet service needs had to be significantly reduced or eliminated. Budget decisions have been based on the priorities established by City Council during their annual goal setting meeting.
B. General Fund Cash Reserves
The estimated FY 05-06 ending cash balance is projected to be 42.9% of expenditures and transfers out. The proposed budget applies a portion of this balance to FY 06-07 expenditures.
The proposed FY 06-07 ending cash balance is 35.9%. The proposed ending cash balance falls within the City Council’s established budget goal and the city’s financial policies.
C. Code Enforcement
The proposed budget continues the policy of intensifying nuisance and property maintenance code enforcement activities. The proposed budget fully funds the additional Building Inspector (programmed to start in April 2006) through FY 06-07 to provide more resources and emphasis on nuisance abatement/property maintenance code enforcement. To this end, the pro-posed budget also includes a $5,000 allocation for miscellaneous contractual services targeted at long-standing nuisance issues (to be repaid through special assessments).
A major initiative in the proposed FY 06-07 budget is the transfer of housing inspection duties from the Fire Department to the Building Inspection Depart-ment, effective January 2007. The proposed budget calls for the hiring of a part-time (24 hours per week) Housing Inspector in the Building Inspection Division for this purpose.
D. Staffing
Marion’s on-going growth continues to generate a significant need for additional staffing to provide adequate levels of service and operations to the community. There are far more needs for additional staffing than could be accommodated in the budget. Furthermore, many of the staffing changes were significantly reduced or modified from department requests due to bud-getary constraints. (More detailed explanations/justifications are provided in Exhibits B through G)
As demonstrated in Exhibit H, the overall staffing level as measured by full-time equivalents (FTE) per thousand population has remained remarkably consistent over the last ten years. Per the proposed FY 06-07 budget, there will be 6.87 FTE per thousand population (using 2000 census figures), compared to 7.07 in FY 01-02 and 7.03 in FY 96-97.
Staffing changes included in the proposed budget are as follows:
1. Planning and Development Department – A major initiative of the pro-posed FY 06-07 budget is the update of the Comprehensive Plan. The proposed budget calls for initiating this update in the second half of FY 06-07. In recognition of the staff time that needs to be devoted to this endeavor, as well as other on-going Department projects (especially brownfields redevelopment activities), the proposed budget calls for the addition of an entry-level Planner I to the Department effective April 2007.
2. Fire Department – As discussed in Section IV-C above, a major initiative in the proposed budget is the transfer of housing inspection duties from the Fire Department to the Building Inspection Department, effective January 2007. This action precludes the need for additional staffing in the Fire Department at this time, and provides enhanced capabilities for in-house training and commercial fire inspections.
3. Library – The proposed budget increases part-time personnel to 7.55 FTE from 7.49 through an additional 139 hours in Library Assistants. The proposed budget also eliminates the part-time Reference Assistant position and increases part-time Library Assistant hours.
4. Parks Department – The proposed budget includes funding for a Super-visor position effective July 1, 2006. This position would be promoted from the ranks and would not entail any net increase in personnel. This position would provide for a working supervisor at Parks Department job sites.
5. Recreation – Due to a recent IPERS interpretation, recreation program officials previously classified as contract employees must now be considered as part-time city employees with appropriate benefits. Accordingly, part-time pay, FICA, IPERS and Miscellaneous Contractual line items have been adjusted for the second half of FY 05-06 and all of FY 06-07 to reflect this change.
6. Community Center and Art and Environment Center – The proposed budget provides a complete year’s worth of custodial services at the new facility for maintenance, security and supervision during evenings and weekends.
7. Engineering/Planning and Development/Building Inspection/Public Services Departments – In conjunction with the relocation of the Engineering Department to City Hall, the two full-time Administrative Assistants currently shared between Engineering and Public Services Depart-ments will need to be re-assigned such that one will be attached to the Engineering Department with the other remaining at Public Services Department. The proposed budget also includes the re-assignment of one of the part-time City Hall Clerk positions to be shared by the Engi-neering, Building Inspection and Planning and Development Departments, once the new City Hall is occupied.
The proposed budget also includes an additional part-time Administrative Assistant position for the Public Services Department once the new City Hall is occupied. This position is needed to assure the telephones and office area are covered throughout the day.
8. City Manager Department – The proposed budget includes funding for a part-time Administrative Assistant to provide back-up and assistance to the Human Resources Coordinator for bi-weekly payroll and the Executive Assistant to the City Manager for agenda material and packet preparation and related duties.
9. Finance Department – The proposed budget includes the re-assignment of one of the part-time City Hall Clerk positions to the Finance Department once the new City Hall is occupied.
E. Wages and Benefits
1. Wages - As previously mentioned, negotiations are currently underway with all three city bargaining units – Marion Police Protective Association (MPPA), International Association of Firefighters (IAFF) and American Federation of State, County and Municipal Employees (AFSCME). The proposed budget contains certain assumptions as to final settlement with respect to wages and benefits. The proposed budget anticipates comparable wage and benefit changes for non-bargaining employees. The proposed budget continues the pay-for-performance system for non-bargaining employees.
2. Health Insurance – Final rates will not be known until April or May. In addition, health insurance is a key issue in the current contract negotiations with the bargaining units. As with the wage issue, the proposed budget contains certain assumptions with regard to health insurance.
The Mayor had inquired as to providing health insurance benefits for Mayor and City Council. Due to the significant cost related for this proposal and City Council’s goal of containing health insurance expenditures, the proposed budget does not include this benefit.
3. IPERS – As previously discussed, the status of IPERS is still quite un-clear. The proposed budget anticipates a 10.4% increase in the employer contribution rate in FY 06-07. This results in an increase of $53,664 compared to FY 05-06.
4. Police and Fire Pensions – Effective July 1, 2006, the employer contribu-tion rate for police officer/firefighter pensions will drop slightly from 28.2% of earnable compensation to 27.75%. This rate had jumped from 17.0% to 20.5% in FY 03-04 and then to 24.9% in FY 04-05. The reduced FY 06-07 rate still amounts to a 63.2% increase compared to FY 02-03.
5. Non-Bargaining Salary Schedule – In 1993, the City Council approved a methodology for establishing salary ranges for non-bargaining employ-ees based on wage levels paid by comparably-sized cities. Each year, the wage comparisons are reviewed. The following adjustments are included in the proposed budget based on this methodology (figures shown are FY 05-06 Target Points).
(a) Adjustments to Target Point resulting in changes to current salaries: None.
(b) Adjustment to Target Points but no changes to current salaries: See Exhibit I.
6. Car Allowance – Certain employees receive monthly car allowances for using their personal vehicles in lieu of being provided a city vehicle. The currently monthly allowance is $275. Effective January 1, 2006, the Internal Revenue Service raised their standard mileage reimbursement rate by 9.9% compared to January 1, 2005 (from $.405 to $.445). Accordingly, the city’s monthly allowance is proposed to be increased by 9.8% from $275 to $302 per month. The City Manager’s car allowance is not proposed to change. The proposed budget also provides for a monthly car allowance for the Assistant Fire Chief.
7. Workers Compensation –The proposed FY 06-07 budget projects a 9.9% increase ($11,350) in workers compensation costs compared to estimated FY 05-06.
8. Wellness – Research indicates that wellness screening can result in significant long-term savings in health claims through early detection and treatment of diseases such as diabetes, high cholesterol, high blood pressure, etc., as well as individualized counseling on risky health behavior such as smoking obesity, etc. The proposed budget allocates $25,000 for voluntary employee health screening in FY 06-07.
9. Early Retirement Option – The proposed budget includes offering the Early Retirement Option program in FY 06-07.
F. General Insurance – The proposed budget provides for an overall increase of $12,802 (5.9%) over FY 05-06 budget. This increase includes the projected insurance costs for the new City Hall and Lowe Park Art and Environment Center.
G. Vehicle Operating Supplies – It is almost impossible to accurately predict fuel prices on a short-, mid- or long-range basis. Estimated FY 05-06 vehicle operating supplies expenditures are expected to exceed budget by more than $41,000 (18.7%). The proposed FY 06-07 budget anticipates a continuing increase in these costs – up 4.8% ($12,547) over FY 05-06 estimate or 24.2% ($53,114) over FY 05-06 budget.
H. Utilities – Projected short- and mid-range utility rates are equally difficult to project. Overall, the proposed budget anticipates a net increase in utility expenditures of 14.1% (+$56,012).
I. Trunk Sewer Upgrade/Local Option Sales Tax
In July 2002, the Veenstra and Kimm consulting engineering firm presented to City Council the results of their analysis of the city’s sanitary trunk sewer system. The study recommended an upgrade of the sanitary trunk sewers, implementation of an inflow-infiltration mitigation program and expansion of the city’s storm sewer system at a total cost of approximately $12 million.
In 2005, a study was presented to City Council analyzing various methods by which to finance this project. The conclusion was reached that the most cost-effective approach to finance these critically needed improvements is through a 1% local option sales tax for a multi-year period. The net cost of this approach to taxpayers is significantly less, while accomplishing the project objectives, compared to payment of debt service costs through property taxes and/or sewer fees.
At the time of preparing this proposed budget, area cities, school districts and County have been discussing the possibility of offering voters the opportunity to vote on a 1% local option sales tax to be shared by local governments. The allocation and term of the potential sales tax have not yet been finally determined. The proposed budget does not include any new local option sales tax revenues or expenditures.
In the event of successful passage of a local option sales tax, it is recom-mended that the lion’s share of the proceeds be used for the trunk sewer upgrade and stormwater management improvements. It is further recommended that any available balance be designated for street improvements and parks and trails projects.
If the local option sales tax is not passed, it is recommended that this project be financed by adding $2,000,000 to each of the city’s biennial General Obligation Bonds issuances through 2017. It is further recommended that sewer rates be increased to cover the debt service costs associated with those bonds. As a consequence, sewer rates would have to more than double within the ten-year program period to finance this project.
J. Brownfields Project – The city has been awarded brownfield grants from the United States Environmental Protection Agency (EPA) for assessment and clean-up of city-owned property in the Central Corridor area. Revenues and expenditures related to these projects are reflected in FY 05-06 estimates and the FY 06-07 proposed budget. The city has submitted applications for addi-tional EPA brownfield grants, but these are not included in the proposed bud-get since these applications are still pending.
K. Zoning Ordinance Update – The proposed budget anticipates completion of most of the Zoning Ordinance update by June 2006. The proposed FY 06-07 budget includes an allocation of $5,000 for consulting services to update the sign regulation portion of the Zoning Ordinance.
L. Comprehensive Plan Update – As previously stated, a major initiative of the proposed FY 06-07 budget is the update of the Comprehensive Plan. The proposed budget calls for initiating this update in the second half of FY 06-07. It is anticipated that the initial phase of this project will be directed to citizen outreach and community visioning. The proposed budget includes funding of $20,000 to retain a planning consultant to assist with the Comprehensive Plan Update.
M. Railroad Corridor Acquisition – The city has been involved in negotiations with the Canadian National Railroad regarding acquisition of the abandoned rail right-of-way for conversion to hiking/biking trail and other uses. The proposed budget does not contain any funding for this project. State/federal grants, cash reserves, local option sales tax revenues and/or a bond referendum election appear to be the only viable mechanisms to finance such a significant project (if an agreeable purchase price can be negotiated with the railroad).
N. Hotel-Motel Funds – Estimated FY 05-06 revenues are $130,000, with esti-mated expenditures at $120,250. Projected FY 06-07 Hotel/Motel funding is $120,000. The proposed budget calls for carrying over $9,750 from FY 05-06 into FY 06-07. If the estimated FY 05-06 revenues are realized, it is proposed to allocate $129,750 in expenditures in FY 06-07. If less than $130,000 is received in FY 05-06, the FY 06-07 allocations will need to be reviewed and re-prioritized.
The proposed allocations are presented in Exhibit J and in the Hotel/ Motel section of the budget.
O. Capital Outlay – Capital outlay requests and proposed funding are shown in Exhibit K.
P. Equipment Reserve Fund – Vehicle and equipment replacement for General Fund departments continue to be fully funded out of the Equipment Reserve Fund. To assure the long-term financial viability of this fund, funds are transferred from General Fund departments based on updated ten-year asset replacement schedules. For budgetary reasons, transfers from the General Fund to the Equipment Reserve Fund have been reduced $274,500 from programmed allocations. Cash flow analysis of the Equipment Reserve Fund indicates it will have adequate cash balance over the ten-year programming period.
Q. Budget Adjustments – In order to meet the City Council’s budget goal and to comply with state budgetary restrictions, a number of adjustments to department requests were necessary. A list of these adjustments is attached as Exhibit L.
R. Other Initiatives
The proposed budget contains funding for a number of other initiatives and special projects. Key proposals included in the General Fund (additional information may be found in each department section of the budget):
1. Police – Overtime remains at a high level ($139,500) but partially offset ($34,525) through reimbursements from Drug Enforcement Agency Governor’s Traffic Safety Bureau and other state/federal programs; increase in vehicle operating supplies, utilities and operating supplies; wireless microphones for mobile data computers in squad cars ($6,400); police radio for the Crime Scene Investigation van ($1,400); analog interface card for the Communications Center logger ($2,575); and expansion of keyless electronic entry system in the Police Station ($2,340).
2. Fire – Increase in vehicle operating supplies, utilities and miscellaneous commodities.
3. Street Lighting – Increase in utility costs due to electric rates and addi-tional street lights from new subdivision development.
4. Traffic Safety – Reduction in utility costs (even with additional traffic signals) due to full conversion to LED devices; increase in miscellaneous contractual for additional street tree trimming/removal.
5. Library – Increase in materials budget by 5.9%; increase in dues/mem-berships/subscriptions, payments to agencies, utilities and operating supplies.
6. Engineering – Transfers from Road Use Fund ($20,000), Sewer Rental Fund ($10,000) and Stormwater Management Fund ($15,000) to help cover engineering expenses and administrative costs related to these activities.
7. Parks – Continue department personnel mowing of city facilities; increase in vehicle operating supplies and overtime; and transfer of a used pick-up truck from Public Services Department for horticultural workers.
8. Recreation – New storage shed at Lowe Park for recreation supplies (funded from Hotel-Motel funds).
9. Art and Environment Center – Change name from Community Center; full year of operation and maintenance costs of new facility.
10. Cemetery – Increase in miscellaneous contractual for increases in costs of mowing, grave opening and tree removal/trimming.
11. Legislative – Continue publication of Marion Messenger newsletter three times per year; increased expenditures for transit service; reduction in fees for webmaster/communications consultant.
12. City Hall – Operations and maintenance costs of new facility.
V. OTHER FUNDS
A. Road Use Fund
Road Use Fund revenues are being adversely impacted by high fuel prices. According to the Iowa Department of Transportation, estimated FY 05-06 revenues are expected to be 2.5% ($57,847) less than FY 05-06 budget. FY 06-07 revenues are projected to be 2.0% ($44,700) less than FY 05-06 budget.
The proposed budget calls for continuing emphasis on street repair and maintenance activities. The proposed budget allocates $275,000 for miscellane-ous street and curb repairs (in addition to $370,000 from the 2005 General Obligation Bond issue). This compares to $270,000 allocated in the FY 05-06 Road Use Fund budget. The proposed budget also includes $100,000 for the city’s obligations towards overwidth/oversizing of subdivision major streets.
Operating expenditures have been adjusted to reflect anticipated increases in material prices, aggressive work programs, and the impact of recent annexations (more gravel roads) including an additional $20,000 for vehicle operating supplies (+38.5%), $9,750 for winter salt/sand (+14.3%), $6,000 for asphalt (+11.8%), and $3,300 for aggregates (11.7%).
The proposed budget includes Road Use funding for fleet tracking software ($7,500 – split with Solid Waste Fund), tank and pumping equipment for salt application on a tandem truck ($4,000), building remodeling ($7,500 - split with Sewer and Solid Waste Funds).
B. Sanitary Sewer
The proposed budget anticipates a 5.1% rate increase (+$4,458 per month) in wastewater treatment payments to the City of Cedar Rapids. For FY 06-07, overall payments are projected to increase from $1,046,655 to $1,105,830 (5.6%). Due to the growth of the city and the sewer rate increase instituted in FY 05-06, no change in sewer rates is proposed for FY 06-07.
Inter-department service charges (the fees charged by the Water Department for processing and mailing sewer bills) are projected to increase by 6.1% ($3,200) due to raises in postal rates.
The proposed budget also includes an allocation of $190,000 for the pro-grammed construction of the Brookside Drive sewer project (with costs to be recovered through hook-up fees).
C. Solid WasteThe Cedar Rapids/Linn County Solid Waste Agency has indicated they may eliminate their current $5.50 per ton rebate program in November 2006, raising tipping fees from $29.50 per ton to $35. In addition, Landfill #2 on County Home Road is projected to re-open in August 2006 which should reduce operating costs in hauling solid waste (as opposed to hauling to Landfill #1 in downtown Cedar Rapids). However, recycling costs will increase since it will cost $10 per ton to dispose of recyclables at Landfill #2 as compared to no tipping cost at City Carton in Cedar Rapids (but higher transport costs). As a result of these changes, payments to agencies are expected to increase from $127,000 budgeted in FY 05-06 to $178,660 (40.7% increase) in FY 06-07.
As a result, the proposed budget calls for a $0.20 (1.85%) monthly increase in solid waste fees (from $10.80 per month to $11.00) effective November 2006, if the Solid Waste Agency’s rebate program is cancelled. This modest increase has been calculated to maintain balance between revenues and expenditures. There has not been an increase in solid waste fees since 1993.
The proposed budget includes an allocation in the Solid Waste Replacement Fund for replacement of a garbage truck ($124,000). The Solid Waste Replacement Fund also includes an allocation of $80,000 for an additional smaller (11 yard) truck for assistance in yard waste collection and help in picking up locations with tighter access (such as Thomas Park and the swimming pool).
D. Stormwater Management
The proposed budget includes allocations of $150,000 for miscellaneous storm sewer projects (locations to be determined at a later date), $234,000 for land acquisition for the Dry Creek Regional Detention Basin project, $100,000
for the City Hall project, $40,000 for storm sewer oversizing in accordance with the city’s development policies, $5,000 for neighborhood draintile/sewer encasement projects and $3,200 for Squaw Creek wetlands mitigation. In addition, the proposed budget includes $3,500 for a rotary mower attachment to a skid loader for improved mowing in the wet areas of detention basins.
The proposed budget also allocates $15,000 for contractual services related to maintenance of city-owned detention basins (mowing, weed control and mosquito control).
The city is required to comply with the National Pollution and Discharge Elimination System (NPDES) Phase II Program requirements. The proposed budget includes an allocation of $15,000 for consulting services to assist with program compliance and $3,000 for a portion of printing costs for the city-wide newsletter (for NPDES citizen education).
VI. ACKNOWLEDGEMENT
I would like to thank and commend Executive Assistant Sue Tate for her dedica-tion, persistence and patience in typing, re-typing, copying, collating, binding and distributing this document in a timely manner.
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