2008 Budget Overview – All Funds
Revenue Summary
The total budget represents planned or anticipated revenues for all funds, excluding unbudgeted special revenue funds and capital project funds. The amount of the annual total anticipated revenues fluctuates up or down from year to year, depending on special projects and grants which may occur during the plan budget period. The budget provides guidelines to staff for City operations.
One purpose of the budget is to communicate the financial plans for the City and its allocation of resources. The budgeted revenues for all funds total $21,949,961. The largest source of revenue by category is property taxes of $9,904,380 comprising 46% of total revenues. Property taxes are levied to support the general fund activities, help pay debt and provide tax increment redevelopment funding sources. Successful tax increment projects have helped create a larger tax base for the City. Currently the City is collecting tax increment revenues from several districts to pay off redevelopment notes, redevelopment bonds and help in future redevelopment costs of properties within certain districts. Levy limits re-instated in 2004 were removed once again in 2005 and to date have not been re-instated thereby giving the City the flexibility for meeting citizen’s requests for sustained services.
Intergovernmental revenues total $986,314 or 4.5% of the City’s revenues. The City currently receives $50,000 in Local Government Aid that supports the Hopkins Center for the Arts. Other forms of intergovernmental revenues received are police and fire aid, chemical assessment grants, PERA aid, fire grants, Community Development Block Grant funds and other miscellaneous state grants.
Utility fees for water, sewer, refuse and storm sewer account for $4,237,299 of the City’s revenue or 19%. In 2007 a utility master plan was completed for the water, sewer and storm sewer funds looking at anticipated revenues, expenditures and planned capital improvements. The rate structure for each fund was then adjusted to meet those needs. Beginning in 2008 and going forward rates will be adjusted as set forth in the utility master plan. In doing so revenues should be adequate to meet the future need of those systems. In 2009 an analysis of the Refuse fund will be done and rates adjusted if they do not continue to meet operational and capital needs.
Charges for services, other than utilities are $1,222,723 or 5.5% of the City’s revenues. The City charges for plan reviews, special police or fire services, parking permits for city parking facilities, facility rental, concessions and ice time. Included in charges for services is $287,125, which is charged to the general and special revenue funds for equipment replacement. A large portion of the charges for services include plan review fees from building permits and due to the economic downturn the budget for 2008 was set conservatively. While there is still potential commercial re-development we did not want to rely on that income when setting the 2008 budget.
Special Assessments and Special Assessment Fees for housing projects are $672,460 or 3% of City revenues. Special Assessments are levied for street, sidewalk and alley, water, sewer or storm sewer improvements that benefit private property. Special Assessment fees are assessed every year to the specific housing properties that benefited from the development projects. These projects allowed the City to improve the value of the housing stock in several town home and condominium developments. Special assessment revenues fluctuate with the number and amount of assessable projects.
Permits, licenses and fines are $692,700 or 3% of revenues. Permit revenues are dependant on the economy and on future development of the City. In 2007 permit revenues increased due to a major commercial development and most likely will return to normal levels for 2008. In addition to the franchise fee collected on cable television, a franchise fee on electric and gas utilities was implemented in 2004 to help offset the loss of state aids. It impacts residential properties by $1 per month on each of their electric and gas utility bills. The rate progresses higher for multiple dwellings and commercial properties. Total franchise fees collected in 2008 will be about $440,000 or 2% of City revenues.
Total 2008 budgeted revenues decreased from 2007 actual revenues. In 2007 two debt issues were sold totaling over $13 million. When the debt is removed from total revenues 2008 revenues would actually increase by 5% from the previous year the majority of the increase coming from utility rates that were adjusted in 2008.
The accompanying pie chart shows the relationship between all revenue sources.
Appropriation Summary
Appropriations for all funds total $21,432,407. This is more than anticipated revenues for 2008. The deficit of $2,325,366 will come from designated fund balance in the Tax Increment Financing funds and the Economic Development Fund.
The largest source of appropriations by category is employee salaries and benefits at $9,179,862. Employee salary and benefits make up 43% of the City’s annual appropriation. In 2008, employee salary and benefits increased by 4.5% due to negotiated salary increases and increases in health and pension benefits.
Materials, supplies and services make up 27% of appropriations at $5,790,612. This amount represents a 3.6% increase over last year’s budget. The increase is due to various economic development projects that staff is currently working with developers on, fuel products, heating and electricity, insurance and general inflationary increases. The costs in this category comprise of consulting, professional services, office and general supplies, disposal costs, expenditure reimbursements and general operating costs.
Capital outlay and improvements can fluctuate substantially every year. In 2008, the appropriated amount is $2,148,409 or 10% of total appropriations. Anticipated capital costs on a development project related to developer incentives make up the majority of budgeted capital appropriations. In addition the City allocates equipment replacement costs to its general and special revenue funds to ensure that resources are available for replacement of equipment when scheduled or necessary. The charges for equipment replacement are recorded in the materials supplies and services categories as they do not directly relate to specific capital outlay expenditures but rather the cost of using city assets.
Debt service appropriations in 2008 decreased 1.5% as payments on bonds decrease the outstanding balance. Total appropriations for 2008 are $2,792,265 or 15% of appropriations. Another 5% of appropriations are for depreciation of property and equipment.
The accompanying pie chart shows total expenditures by departmental function.
