COUNCIL BUDGET HEARINGS
Members of Council and Civilian members of the Legislative and Finance Committee met in budget hearings on May 20, 1997 at 7:00 p.m. Members of Council present were Council President Christiansen, Mr. Lambert, Mr. Pitts, Mr. Leary, Mr. Truitt, Mrs. Malone, Mr. Salters, and Mr. Weller. Councilman Fenimore was absent. Civilian members of the Legislative and Finance Committee present were Mr. Schaefer and Mr. Merritt. Mayor Hutchison was also present.
Mr. Lambert moved for approval of the agenda, seconded by Mr. Leary and unanimously carried.
Mr. Salters, Chairman of the Legislative and Finance Committee, explained that the proposed budgets were prepared by the City Manager, Finance Director and Administrative Services Director with assistance of City staff from various departments. Close scrutiny to details and a tight-fist approach has been followed in the preparation of the budget. He stated that the proposed budget contains no increase in property taxes and no rate increases for water, sewer or electric services. This no tax and no rate increase budget shows the vision, leadership and professional expertise of the City staff. The Mayor and City Council have played a major role in shaping the philosophy of the preparers of this budget. Mr. Salters reminded the public that the City’s property taxes have not been increased since 1993, which is unheard of in municipalities of our size.
The total budget for the City’s major funds for 1997/98 is approximately $70 million, with $15 million in the General Fund budget. The General Fund budget includes expenses for the Police Department, Fire Department, Library, Recreation, Inspections, Planning and Sanitation. These are the traditional municipal services which create and enhance the high quality of life in our city. The budget also includes provisions for the new City-wide 911 program under the Police Department. This program has been mandated by the State and will have no effect on our municipal taxes.
The Water/Sewer budget totals $9 million of which $3 million is to pay Kent County for sewage processing. The remaining $6 million provides for operations and capital expenses.
The Electric budget is $46 million which includes $26 million for purchased power, $3 million for debt service, $3.9 million as a transfer to the General Fund, and $4 million as a transfer for other electric reserves.
All of the budgets provide for the operating expenses, much needed reserves, and capital equipment. All budgets represent areas which are geared toward providing economic and reliable services to the citizens of Dover and other customers of this City. Mr. Salters stated that the budget reflects the determination of the Mayor, City Council and City employees for planned and controlled growth and to maintain the high quality of services to all our customers. He reminded the public that the cost to provide services is increasing along with inflation, improvements and extensions and some much needed programs. This is reflected in the reduced beginning balance for the General Fund for FY99/00. He requested that the Mayor, Council and staff keep one eye open for cost cutting strategies without effecting the quality of life for our citizens and the other eye for finding new sources of revenue.
Mr. Salters requested comments from the City Manager. Before addressing the contents of the budget proposal, Mr. O’Connor recognized Mike Karia and Terry Tieman for the amount of time and work they dedicated to preparation of the budget.
In highlighting areas of revenues, Mr. O’Connor noted that the property tax rate remains at $.685 per $100 of assessed value which has been in place since July 1, 1993. The franchise fees revenue reflects a higher than usual revenue in the budget as we are going to quarterly payments. This budget reflects the annual amount for the previous fiscal year, while at the same time we have started receiving quarterly payments. A new 911 fee is projected which is based on a 50 cent per line fee collected from phone customers. This fee is currently being paid to Kent County and will be transferred when Dover’s 911 Dispatch Center is operational. The Dispatch Center operation is contingent on receipt of this fee.
Looking at the expense side, Mr. O’Connor noted that an additional $20,000 has been designated to Robbins Hose Company. The expense “Transfer to Fire” has been included as a direct expense to the General Fund. This money has been set aside for additional capital expenditures in fire fighting apparatus.
The new 911 Dispatch Center will also operate the dispatch functions for the day to day operations of the Police Department and the after hour calls for other City departments. This will require four additional trained dispatchers. The Police Department will also initiate the conversion of an 800 MHZ radio system.
Mr. O’Connor reviewed and explained other programs and departmental changes that are reflected in the proposed budget. Although there is no projected rate increase for water and sewer, Mr. O’Connor stated that there is an increase in water/sewer impact fees. Referring to electric rates, he stated that electric rate increases for this next year are not expected. He explained that the reserves made to the Depreciation Fund and the Future Capacity Fund have decreased due primarily to our consumption pattern which declined during the past 12 months. Last summer was cooler with an abundance of rain which had a negative effect on electric usage. Funds from the two reserve accounts were used to fill this gap. It is hoped that our normal pattern will resume this summer.
An area that remains a concern for the City is sanitation. Although the landfill fees are expected to remain constant for the next two years, the City shows an increase in volume per residential unit which increases our costs at the landfill. Over the next 12 month period, it is anticipated that the City’s landfill charge will exceed $1 million. Mr. O’Connor stated that we will have to monitor this situation and may have to consider different alternatives.
Mr. O’Connor advised the public that members of Council have had copies of the proposed budget for several weeks and have had an opportunity to have questions addressed by the City Manager or the involved department head prior to the budget hearings. He invited citizens to contact him should they have questions or concerns regarding the proposed budget.
Mr. Leary complimented City staff on preparation of the budget, stating his feeling that it depicts the excellent work of a team of very dedicated employees. He also stated appreciation for the way staff has modified the budget over the years by including more summaries, making it easier for review by those that do not work with it on a daily basis.
One area that is not spelled out in the budget but should be kept in mind, is that citizens authorized the borrowing of funds to construct the new Police Station, which in effect authorized a property tax increase of 3.5 to 4 cents. Mr. Leary emphasized that so far, the City has been able to hold off on that property tax rate increase. This emphasizes the City’s desire to keep the budget as tight as possible. Another area of concern expressed by Mr. Leary is the increasing volume of sanitation, pointing out that a chart in the budget shows that sanitation fees were less than $200,000 per year in the 1985/86 fiscal year. This depicts the very rapid rate of increase in sanitation volume and the associated landfill fees to the City. Such an increase could have had a large effect on our property tax rate but so far City staff has been able to hold the line. Mr. Leary complimented City staff for their efforts but warned Council that this is an area that should be closely monitored.
Mr. Karia relayed that while reviewing the budget with some members of Council, Councilman Truitt suggested that significant line item budget differences, up or down, be highlighted in the budget notes so that members of Council will know the reason for the fluctuation. Mr. Karia agreed with the suggestion, feeling that this type of information would be beneficial in reviewing the budget. Since the budget applies to all departments, with both large and small budgets, Mr. Karia requested that the Finance Director be given discretion as to which changes warrant detailed explanation as he currently does with monthly budget reports to Council.
Mr. Leary moved to recommend acceptance of the proposed 1997/98 budget as presented and to recommend that the tax rate remain at its current level of $.685 per one hundred dollars of assessed value. The motion was seconded by Mr. Lambert and unanimously carried. (It is noted that the budget hearing tentatively scheduled for May 21, 1997 will not be necessary and will be canceled.)
Mr. Leary moved for adjournment, seconded by Mrs. Malone and unanimously carried.
Meeting Adjourned at 7:40 P.M.
Respectfully submitted,
Robin R. Christiansen
Council President
RRC/DJB