The Bartlesville City Council reviewed the proposed operating and capital projects budgets for the 2021-22 Fiscal Year during a workshop meeting held May 17. The City’s current fiscal year will end June 30 and the new budget will take effect on July 1.
The proposed budget, which will be finalized with approval by the City Council next month, contains some notable changes from last year, including:
- An allocation of funds for the operation of the Bartlesville Municipal Airport
- Proposed fee adjustments for City utility customers
- $2.9 million in federal stimulus funding through the federal American Rescue Plan Act of 2021
Sales tax
CFO/City Clerk Jason Muninger told the council Monday that sales tax revenues, the City’s largest source of recurring income, are projected to be relatively flat in FY 2021-22, with anticipated revenues of $19.5 million.
Sales tax revenue, which accounts for about 37.4 percent of the City’s recurring external revenues, are divided between the General Fund (77.9 percent), Economic Development Fund (7.4 percent), and the Capital Improvements Projects (CIP) Sales Tax Fund (14.7 percent).
“We typically examine historical trends in estimating sales tax revenue but also weigh heavily the most recent factors,” Muninger said. “Our recent experience with sales tax shows great uncertainty, primarily due to the pandemic and, more recently, possible changes in spending as the country reopens after an extended period of heavy restrictions placed on retail establishments.”
Muninger pointed to the current fiscal year as an example of uncertain returns, with revenues on-target to be nearly 3 percent over the prior year and about nine percent over the projected budget.
“The most recent report, which includes sales tax collections over the past month or so, shows collections of more than $2 million. This is about $213,000 higher than any month we’ve ever collected,” he said, noting recent stimulus funding distribution and the reopening of the economy as possible factors in the increase
American Rescue Plan Act
Also on the revenue side, the City expects to receive federal stimulus funding totaling approximately $5.8 million over the next two years through the American Rescue Plan Act. The first tranche of about $2.9 million is expected to come in around June, with the second tranche expected a year later. Assuming the budgeting process begins in FY 2021-22, the City will have three and one-half years to spend the entire balances.
The U.S. Treasury has outlined a number of categories for which the funds may be used, including to offset losses and provide pay for essential workers. The proposed FY 2021-22 City budget includes the appropriation of about $900,000 of ARP Act funds to be used in conjunction with leftover CARES (Coronavirus Aid, Relief and Economic Security) Act funds to bring the pay of several City employees up to market value.
Utility rate adjustments
The proposed budget also includes rate adjustments for the City’s utility customers based on findings from a recently completed study by consultant company NewGen.
The company conducted a comprehensive cost study for the City’s water, wastewater and solid waste services based on several criteria, including operating and maintenance expenses, outstanding debt service, capital outlay, and vehicle replacement costs.
NewGen consultant David Yanke told the council Monday the company’s findings and recommendations are laid out over a five-year period but that rate structures beyond FY 2021-22 can be structured differently if the council desires.
Yanke said that due to planned capital expenses over the next five years, rate adjustments are necessary to offset operational costs and capital needs. He said NewGen is recommending a seven percent increase in water rates and a 40 percent increase in wastewater rates over a five year period.
If the budget is approved as proposed, the following adjustments would be effective July 1:
Water
Water base rates would increase by $1 for residential customers
Water incremental rates would increase by $.25 per thousand gallons
Water capital investment fees would increase by $.10 per thousand gallons
Wastewater
Wastewater base rates would increase by $2 for residential customers
Wastewater incremental rates would increase by $.20 per thousand gallons
Wastewater capital investment fees will not increase
Sanitation
Sanitation cart rates would increase by $1.50 for a single cart
Sanitation commercial rates would increase by various amounts determined by what service is being utilized
Note: All rate increases are subject to council approval of the proposed budget, which could occur during the regular June 7 council meeting.
Reserve funds
The proposed budget also includes $871,520 for the Stabilization Reserve Fund, which was established in 2016 to help ensure future financial stability. The allocation, if approved, would bring the overall balance of the Stabilization Reserve Fund to $10.2 million.
This fund and several others were established and became effective in 2012 in an effort to buoy the City in the event of economic hardship.
“During the recent economic downturn it became evident that a more effective and consistent method of accumulating reserve funds was needed,” Bailey said. “With the guidance of the City Council, staff established several mechanisms that will aid in the City’s future financial stability. These were the creation of the Stabilization Reserve Fund, Capital Reserve Fund, Auto Collision Insurance Fund, and the formalization of inner-fund reserve policies.”
The City’s stabilization reserve policy calls for a contribution equal to two percent of the operating budget of these four funds until the maximum level is reached. The maximum level is defined as 35 percent of the operating budget of the fund, while the minimum level set by the ordinance is 16 percent of the operating budget of the fund.
“All funds have now reached the minimum level but are years from the maximum level,” Bailey said.
Bartlesville Municipal Airport
The proposed budget also includes the allocation of $250,000 for the operation of the Bartlesville Municipal Airport.
While owned by the City of Bartlesville, the airport has for many years been managed and operated by ConocoPhillips. The company announced earlier this year that it will end its lease-operating agreement with the City effective August 2021.
Bailey said this week that discussions regarding how the airport will be managed once the lease-operating agreement with ConocoPhillips ends are still ongoing but that the proposed allocation to operate it is believed to be on-target at $250,000.
“Plans are being finalized for the airport’s operation, but staff believes this $250,000 will be sufficient to cover the net losses of the operation,” he said.
Salaries & benefits
Also included in the proposed budget are several new positions as well as pay adjustments for some City employees whose salaries are below market value. To help bring the salaries up to market value levels, pay increases are proposed for the following:
- 68 fire personnel
- 64 police personnel
- 47 maintenance workers and operators
- 26 sanitation personnel
- 11 water plant operators and mechanics
- 8 managers and supervisors
- 6 exempt and senior employees
- 6 directors
- 3 inspectors
- 3 codes enforcement officers
Bailey said the proposed wage increases are based on a comparison to peer cities, difficulty recruiting and retaining employees at that position and internal equity. Funding for the increases, if approved, would be provided through money reserved from the previously received CARES Act funding and the City’s allocation of American Rescue Plan Act of 2021 funds. See related information above. City employees will also receive a 2 percent Cost of Living Adjustment effective July 1 and a 2.5 percent merit increase on their employment anniversary date.
Additionally, several positions that were eliminated during previous economic downturns are restored in the proposed budget to help meet rising demands. The positions include a building inspector, an assistant fire marshal, a police property/evidence specialist, three police officers and two maintenance workers.
What’s next
No action was taken on the proposed budgets on Monday. A public hearing will be held during the regularly scheduled council meeting on June 7 to give citizens an opportunity to address the council about the budgets before final adoption is considered. The council will likely consider final adoption of the budget during the meeting as well.
To view the proposed budget in its entirety, see the City Council Information Packet 5-17-21. To view PowerPoint presentations made to the council on Monday, see Operating and Capital budgets proposed FY 2021-22. To view the budget for the current or past fiscal years, see Financial Document Archives.