Minutes 03/29/2004 - Laserfiche WebLink

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March 29, 2004 This information clearly indicates that the City Council is dedicated to funding Schools. To continue this commitment, the proposed funding for the growing cost of Schools is through the tax rate increases, as discussed earlier. Much like the City, Schools are facing real challenges, including the growing cost of healthcare, retirement, and compensation. It is my recommendation that, like the City, the Schools evaluate all areas of spending, and in collaboration with the City, look for those administrative services that can be consolidated to ensure the most effective and efficient use of resources. THE GROWING ASSET OF PUBLIC UTILITIES One of the most significant assets owned by the City is our Public Utilities System. Regionally, we provide more than 7 million gallons of water a day to neighboring cities. Our Public Utilities System has been recognized for its management and innovative business practices. The growth in water sales and sewer usage is expected to grow by just over 2% from FY 04 to FY 05. This growth produces about $559,000 of additional revenue for the operations, debt service, and capital improvement program. Part of the increase in the charges for service is related to the contractual agreements with the cities of Suffolk and Chesapeake. The growth in the usage of these contracts is 3.5% or $267,302. As the proposed new developments occur, there will be increases in usage, and we anticipate the revenue impact of this growth to begin in the FY 06 year and will be reflected in the FY 06 budget. To begin to fund the $58.9 million five-year capital improvement program for public utilities, there is a proposed rate increase of 10 cents on the water rates and an increase of 10 cents on the sewer rates. These increases equate to 53 cents a month for the water rate increase and 52 cents a month for the sewer rate increase. This year's increases are the third year of a long-term rate plan to fund the ongoing cost of maintenance and renovations. Although the CIP appears to be significant, the rate increases provide the necessary coverage to ensure the long-term fiscal sustainability of the Public Utilities Fund. The operational cost of Public Utilities decreased by $1 million (due to debt refunding), however, all other costs grew by a total of $165,454. This growth, like the General Fund, is caused by the increases in the cost of personnel and internal service funds. As part of this change, a new Utilities Business Office was created to manage the customer service and billing for utilities. This function will be managed by the Department of Finance. Also proposed in this budget is a balanced Stormwater Fund with a proposed rate increase of 50 cents per residential unit. This increase will fund the Stormwater Plan oresented to the City Council last fall. This budget includes rate increases in several taxes. Here is a chart that shows the ~mpact of those rate increases on the average homeowner: Real estate tax $7.58 Personal property tax 1.56 Stormwater rate .50 Water rate .53 Sewer rate .52 Total increase $10.69 OPERATING BUDGET SUMMARY The operating budget that is brought forth reflects the priorities of the City Council and provides effective and efficient services to the Citizens. Below are just some of the items proposed for inclusion in the operating budget.