At the Watonga City Council special meeting Tuesday, the council quickly tabled the questions about hiring a city manager and what that process should look like and moved on to a thorough discussion of the city budget. Tabled agenda items will be brought up at the next regularly scheduled meeting.
Russ Meacham, of RS Meacham, the city’s bookkeeping firm, was on hand to assist the new members who had not been through the budget process before. He explained it is the city council who establishes the budget to set their vision for the community for the next fiscal year. In Watonga, the fiscal year runs from July 1 of one calendar year to June 30 of the next calendar year. The goal is to keep the city viable for the entire year, with the trick being to balance the costs, including staff salaries, materials and supplies as well as capital expenses, like large equipment purchases or a , sewage treatment plant, with anticipated income.
The beginning balance of the general fund is about $2.7 million. That’s similar to the ending balance on a household bank statement. There are revenues expected of $3.7 million and expenses pf $5.9 million, meaning that spending is $1.19 million more than income. Transfers in account for $999,816 and the ending balance is $1.5 million. The expenses are generally capital outlay costs and the ending balance Meacham called a ‘rainy day fund.’ He also acknowledged that it was not enough for an emergency, and the city needs to continue to build the fund. He also noted in an emergency situation, such as a damaging storm, local banks can and do quickly – as quickly as 48 hours-- make funds available to cities to begin the recovery process.
On the revenue, or income side, Meacham explained the budget is set at 90% of the income from the year previous for each fund.
Moving to the enterprise funds, income is expected at $22.5 million, while expenses are anticipated to be $24.3 million. However, Meacham explained, there is still money the city borrowed from the Oklahoma Water Resources Board sitting in the bank to be expended on the drinking water and sewage treatment projects. Once the $999,816 is transferred to the general fund, the ending balance in the enterprise funds is $541,274, or $2.7 million less than the beginning balance.
Those figures include increases in utility costs for consumers. That increase, which will be on the June agenda, is set as an $8 increase for both water and sewer base rates, a 3% increase in usage charges and a 2.9% increase for the garbage service as laid out in the city’s contract with Veteran’s Waste Services. This will net some $560,000.
Mecham noted it was better for the city to enact small changes regularly rather than large hikes in rates occasionally. It also keeps the city in debt compliance with OWRB. He pointed out the projects will be concluded in the next two fiscal years and the council will not have those expenses to account for going forward.
The council was asked if there were any changes they wanted to make to the proposed budget.
Neal Riley asked to return four additional radar for police cars to the budget, something that was removed at the last budget hearing. In his view it was worth the cost to have one in every patrol unit. He further asked if the city should budget more for the city attorney, since the last budget was amended to cover the costs.
The city attorney, Jared Harrison, explained that last year was an outlier because there were only two city council members and that lead to many legal questions, pushing attorney costs higher.
Riley insisted he would rather add another $18,000 to the allotted amount instead of coming back and making a budget amendment later.
The change was made and Meacham said the firm could have the proposed budget as amended returned to the council members as soon as the end of this week.
If approved the budget and its utility increases will go into effect on July 1.