The Bartlesville City Council heard presentations Monday on a proposed City budget for the 2017-18 Fiscal Year and planned capital projects for the year as outlined in the voter-approved Capital Improvements Projects Program. The 2017-18 fiscal year starts July 1, 2017, and ends June 30, 2018.
According to Chief Financial Officer and Administrative Director Mike Bailey, the proposed budget was completed based on an anticipated sales tax increase of 1.3 percent.
“We have seen some decline in our sales tax revenues over the last few years. However, there are some factors that indicate this is turning in our favor. The largest is the opening of Silver Lake Village Phase I in the fall of this year,” Bailey said.
Silver Lake Village includes major retail development on Adams Boulevard just east of Silver Lake Road. Phase 1 of the project is expected to be complete this Fall, while phase 2 is expected to wrap up next Spring. Infrastructure needed in the area to facilitate the project is funded through a Tax Increment Finance District (TIF). For the Silver Lake Village TIF, 30 percent of the sales tax revenue generated by the development will be captured to repay loans used to finance the development.
“This is the largest single retail development in Bartlesville since the 1980s. We expect it to have a significant impact on sales tax,” Bailey said. “Bartlesville is already a regional shopping destination for people who live anywhere from 10 miles south all the way into Kansas. This shopping center is expected to further capture sales from this expanded market area.”
The City’s General Fund revenue is derived primarily through sales and other taxes, fees, and transfers from utility funds. Revenue and available carryover balances for the upcoming fiscal year have been projected at $23.1 million. Major expenditures, also projected at $23.1 million, from the General Fund include personnel and operations.
For FY 2017-18, no major changes are expected in operational costs or personnel. However, a re-organization of the IT Department is planned using existing positions. The IT Department, which has functioned as a part of Engineering and is now supervised by the administrative director/CFO, will soon have its own supervisor. A vacant position in Building Maintenance will be eliminated to make way for the new position. Additionally, no pay increases for City employees are included in the proposed budget, but the proposal does include a recommendation for a week of special vacation in-lieu of a raise.
“The City of Bartlesville’s most valuable asset is its employees,” said City Manager Ed Gordon. “The wage study conducted last year and the pay increases given as a result of that study was our best effort to bring pay levels up to where they need to be to properly compensate our employees and for the City to remain competitive in today’s workforce. However, due to declines in sales tax revenue over the past year and the uncertainty of the market into the near future, pay increases are not included in the 2017-18 fiscal year budget.”
The council also heard recommendations from Director of Engineering Micah Siemers regarding the Capital Improvements Program (CIP). Siemers outlined $75.6 million in projects recommended for approval during the 2017-18 Fiscal Year. The projects include those funded by both general obligation bonds and the 1/2-cent Capital Improvements Projects tax, which is approved by voters every seven years. The majority of the projects are for street improvements but also include improvements to City facilities, equipment, storm water drainage issues, parks and downtown.
During the presentations, staff requested guidance from the council on two issues: possible “bonus” compensation for City employees in lieu of pay increases, and the timing of the Hillcrest Drive rehabilitation and east downtown storm water drainage projects. Both projects will be completed, but only one can be funded for FY 2017-18. The other project will be funded in FY 2020-21. The Cost of Living Adjustment Bonus (COLUB) program is one the City has relied on in the past during financially lean times to recognize its employees.
The next step in the process will be a public hearing, set for June 5. The council is expected to consider adoption of the budget at that meeting or a meeting later in June.
For more information on the proposed FY 2017-18 budget and CIP projects, see Budget Workshop FY 2017-18 and CIP BUDGET_WORKSHOP FY 17-18. To view the proposed budget in draft form, see 2017-2018 Fiscal Year’s Budget (proposed).