Prior to the Watonga City Council meeting Tuesday, the group presented its budget memo as required by Oklahoma Statute. That proposal is based on tax income to the city at 90 % of last year's collections. This is a not-uncommon municipal budgeting practice.
The complete budget, with line items and full departmental breakdowns, is due to the state auditor’s office by the end of June.
The budget was also created using a 2% increase in water, sewer and garbage rates and 1% increase in electricity rates. However, when the city begins its water and sewer projects using loan proceeds from the Oklahoma Water Resources Board, that body will analyze the city’s water and sewer rates and determine whether they are in line with those of other communities around the state.
There are some raises in the budget. Those, too, are to bring the city salaries in line with what other towns and cities pay their employees. This safeguards the city from losing staff it has trained to other municipalities solely on the basis of pay. The raises, lumped together, account for around $49,000. To cover the costs of the raises, other operating costs have been sliced.
Early in the budgeting process, department heads make requests for capital outlay. That term usually covers equipment purchases, although it could also mean improvement to facilities or infrastructure.
The police, emergency medical and fire departments are each allocated $50,000. That $150,000 total is earmarked from the sales tax income fund.
Streets will be funded at $232,000, with the money coming from the general fund and the street and alley kitty.
The library and parks department each asked for $50,000, which will come from the sales tax fund.
The whoppers in the capital outlay costs are the water department, at $6 million, and the sewer or disposal department, at $8 million. Those costs will come from infrastructure loans.
Light and water will receive $210,000 for capital improvements, from its own operations income.
The public works authority, which largely deals with the Watonga airport, will designate $713,370 to that facility. Of that amount, $692,530 is from a new FAA grant and $20,840, which is the city’s match to obtain the grant, will come from the operations budget.
The total for capital outlay in the 2023-34 budget is $15.4 million. These items exclude salaries and operating expenses; they are new equipment or improvements to the city infrastructure.
Mayor Bill Seitter, doing some mental math, pointed out that $700,000 of the total was from city coffers.
“This shows as a city we are investing our dollars to improve the quality of life for our citizens,” he said.
When it came to paying the help, the budget outline shows that approximately 75% of the general fund income goes to payroll. It represents a 2% decrease from last year’s budget. In the light and water department, the payroll represents 29% of income, a decrease of 23% from last year. The decrease is from the change in garbage collection outsourcing, which moved several employees to another department and out of light and water.
Budgeting isn’t just about meeting the costs of today. It also includes debt service and real estate payments, just like a household budget would.
The city is no different. It will pay $113,535 from the hospital sinking fund on the 2012 bond issue. That money comes from ad valorem taxes, essentially property taxes the county collects. Each year the cities and towns in the county present the county with their estimate of needs, basically asking for the portion of property tax it needs to operate efficiently.
The cost of the city hall is shown at $32,604 this year, coming from sales taxes and light and water funds.
The last debt on the list is the ongoing water project loan, not to be confused with the upcoming water and sewer project loans shown in the capital outlay segment of the laundry list.
That debt payment is around $806,000 and will be paid through the light and water fund.
In spite of paying more than $900,000 in debt payments, the city has some money in the bank.
Estimates are the general funds are at $2.5 million; light and water, public works, and Watonga economic development authority balances total $3.9 million; capital projects fund at $440,735; and special revenue funds, which include the hospital sinking fund and special fund, street and alley fund, library special fund and grant dollars on hand total $796,993. The total estimate of all funds equals $7.6 million.
Revenues from those same sources are expected to come in at $26.3 million versus an estimated $26 million expense tally.
The numbers are estimates at this point because the end of the fiscal year is June 30.
This is a broad-brush overview of the city budget estimates. The funds, balances, expenses and outlays remain fluid throughout the fiscal year because the costs of items change, revenues increase or decrease and some costs – such as what the city pays for the electricity it sells to the residents – are beyond municipal control.
The introduction of the document presented by RS Meacham, the city’s accounting firm, reads, in part, “This …has been prepared with the purpose of implementing the vision of the city council to increase investment in the city and infrastructure to assist with economic development and improve the quality of life for the citizens of Watonga while enlisting the team members of the city with their knowledge of the operations to affect change.”
Those changes to the city and adjustments to its budget will be the subject of much scrutiny as they unfold.