When I first became mayor, I said my primary goal was to grow the city a little bit every year without assuming any debt in doing so.
I really wanted to establish a pay-as-you-go policy (as far as possible), which will eliminate a significant expense in interest payments going to the banks or other lending institutions.
So far this has been very successful. We have been able to pay for road improvements and capital items from existing reserve funds without having to borrow any money. Early on in my tenure we retired some old bonds from previous road related projects and essentially rolled over those annual bond payments into our public works road funds to accumulate reserves for future improvements.
This year all of our street chip sealing was paid for using previously budgeted funds without having to dip into reserves.
This year we have an unplanned roads project to install sewer and blacktop on Whitebirch Drive, Papago Circle, Suffolk Circle and Suffolk Drive that is required to support the Whitebirch Village Townhouse development infrastructure. We will be completely paying for this expense primarily with the use of the sewer reserves and some remaining funds from the existing roads budget.
We will have to “borrow” some to pay the roads portion of the project; however, this will be “borrowed” from our sewer enterprise reserves. The road budget will pay back the sewer enterprise fund over the next few years, which will save us a significant amount of interest expense as well as allow us to maintain support for our future roads infrastructure.
Our current 2019 budget is approximately $2 million, and currently our preliminary 2020 baseline budget will be about $2.2 million (approximately a 6% increase), which places the city in a very good position to operate the city this next year. It should be noted that the slight increase in levy is only to meet the current expenses that have increased over the past year.
As part of our budgeting process this year, we are considering several optional projects that have been discussed and evaluated for inclusion in the 2020 budget. It should be noted that these projects would be over and above the already identified increase in the baseline budget.
Based on extensive discussion at the September city council meeting, the council elected to fund several other items either in part or fully for 2020 that implement some items identified in the new comprehensive plan, some items needed for infrastructure improvements and future road maintenance.
The three projects selected for full funding were two engineering feasibility studies for a community center and future Bushman Road upgrade and one funding for an unidentified contingency project. The contingency project is funding for any project that may arise due to a major piece of equipment failing, additional salt/sand needed during the winter, emergency storm damage repair, etc.
In other words, we would always have a small fund budgeted for those pesky unknown items that may pop up during the year. If the funding is not used next year it would roll over to the following year.
Items selected for partial funding were road maintenance and parks funding. The partial funding is in keeping with my pay-as-you-go philosophy and will set aside funds in the next few years so that when we actually need to make the expenditures we will have the cash available so we will not have to borrow to fund the project.
The funding of these additional items added an additional 10% to the preliminary baseline levy for a final estimate of a 16.6% increase. While this seems like a very large increase, the amounts were based on preliminary estimates for each of the items considered.
During October and November we will be sharpening our pencils and focusing on better estimates and will be reducing this budget before the final approval in December.