Tonight’s city council meeting was all about the budget numbers. A lot of numbers. So many numbers that the handouts looked like the staff had been calculating pi out to 900 decimal places. Let’s get to it!

* * * PARK IMPACT FEE (PIF) * * *
First up is a proposed impact fee to pay for parks and park improvements (we don’t have one right now). Buuuuut, since the Transportation Impact Fee (TIF) is getting cut in half, we’ve got some extra room for taxation. However, we have to balance a possible School Impact Fee (SIF) to make sure we’re not overdoing it. So – if the lift from the PIF doesn’t short-shrift the TIF, we can gift the SIF without it looking like grift, so developers won’t be miffed. Got it?

Based on a study originally presented in April, the council has two options for a PIF.

1) Improvements-driven: $2,852 fee per dwelling unit

2) Standards-driven:  $17,366 fee per dwelling unit

You can probably guess which one we’re going to get. Rather than bring the city up to recognized standards of park facilities per 1000 residents, we’re going to go with the cheaper option of improvements to the immediate area. The choices are sort of like being asked, “Would you like a handshake, or a punch in the face?” Nice to meet you, sir.

* * * 3^RD QUARTER FINANCIAL REVIEW * * *

You’ve heard most of these numbers already, if you’re a regular reader of this blog. I’ll make it easy on you, and we’ll do bullet points:

* Our fund balance is $15,305,334 which is about $235K over this time last year.
* General fund balance is about 30% over expenditures
* Council rule is to keep that number 10% or higher, so we’re doing good
* However, that money is there because we’re not spending it to build stuff
* Golf course is now projected to lose less money, under $60K (by cutting hours of operation)
* We’re collecting 10% less than we forecasted
* We’re spending 12% less than we forecasted

* * * OPTIONS TO REDUCE OUR $220K SHORTFALL * * *
The city staff has presented five options for the council to consider:

1) Reduce General Fund Sales Tax contribution to Capital Fund
We now send 25% of the sales tax collected to the Capital Fund (used to build stuff). The finance director suggested that we cut that to 10% for the next 2 years. This is the 5^th time he’s brought it up since I’ve started attending meetings, and it’s the number 1 option in the 5, which probably isn’t a coincidence. IF YOU ARE ON THE CITY COUNCIL AND YOU ARE READING THIS, I THINK THIS IS THE OPTION THE STAFF WANTS YOU TO CHOOSE. I think the finance director is going to have to learn how to make flashing red arrows appear on the PowerPoint presentation to make this point clearer.

2) Change the Fund Balance Policy to a Number Less Than 10%
This balance is essentially our savings account, or rainy day fund. It’s now at 30%, and we’re going to dip into it in the next few years by all projections anyway.

3) Increase the Utility Tax
A 1% increase would raise about $300,000. Ten years ago, it probably would have been $150,000, but a lot of you have really upgraded the sizes of your televisions. Seriously, these things suck up a lot of power, and they are offsetting the gains from the EnergyStar program.

4) Loosening Up Assumptions of Anticipated Revenue/
This would mean that we “guess high” on how many permits we’ll issue. That’s sort of like you saying, “I think I’m going to make $400,000 this year”, and then using that figure to buy a Ferrari. No one really likes this option.

5) Staff Reductions
Probably won’t happen, especially since a recent consultant came back with a report that said, “You need to hire more staff.” On a side note, the finance director mentioned that we haven’t added any police officers, and we’ve actually lost one when we stopped paying for a school resource officer. I think he needs to talk to Jim Flynn, since Jim says we’ve quadrupled our officers, and the Voice printed his comment with the precursor of FACT (yes, with all-caps). Hopefully Jim can straighten out the finance director, the city manager, and the police chief before the budget is voted on, since they apparently don’t realize how many officers we really have.

* CITY MANAGER’S RECOMMENDATIONS

1) Permanently eliminate the Assistant City Mgr position
2) Create some staff positions to eliminate higher-priced consultant arrangements
3) Raise the utility tax .75%, which would raise $225,000

Councilor Barnes took on the utility tax idea Latte Math-Style, and figures that this utility tax increase will cost most households about $30 per year, or almost one latte per month. I’ll talk more about Latte Math in a different forum next week.

* * * 2010-2015 CAPITAL PROJECTS * * *
For what we have planned, the total tab will cost around $65 Million. With our current funding sources, we’re going to bring in about $23.2 Million. Where will there rest come from?

* PIF – $2.1M
* Bonds – $4.2M
* Grants – $19.8M
* Voter-approved Bonds – $15.5M

Yep, that’s right. Voter-approved bonds. 2010 is set to be a banner year for voters to tax themselves, with school, fire, and city initiatives set to arrive on the ballot. We’ll have plenty of time to discuss the pros and cons of these once the details emerge.

* * * PROPERTY TAX LEVY * * *
Every year, the city gets to take a look at the levy they charge for property taxes. Due to state law, the city can raise the property tax amount by 1% or the Implicit Price Deflator (IPD). The IPD is based on the inflation rate for the most part, and this year we had DE-flation, which means we can raise it a max of .99152 instead of 1.0.

Throw in a couple of other numbers, and the final result is that your 2010 levy will now be 1.28% instead of 1.08% in 2009. Your house value went down about 16%, but your tax rate went up 19%. Don’t sweat it; you’ll pay just about the same amount in actual dollars.

* NEXT WEEK: There’s a public hearing on the proposed budget for 2010. If you want to tell the council members what choice they should pick to balance the budget, show up next Monday at 7pm to tell them in person.

See you there!