NEWBERRY – City Manager Matt DeWitt informed council at their two budget work sessions that balancing the proposed budget was extremely difficult this year due to the unknown effects of the COVID-19 pandemic.
However, city staff chose a conservative approach in planning. This was achieved by budgeting and forecasting a more than 9.46 percent decrease in revenues in both general (4.4 percent) and special funds (5.06 percent).
The City of Newberry’s proposed budget for the fiscal year 2020-21 is balanced without any increases in taxes or business license fees.
The proposed general fund budget discussed last week was balanced at $9,605,107, a decrease of $553,300, or 5.4 percent, compared to last year. DeWitt said there had been no city millage increase in over nine years and for that reason, city staff recommended exploring possible outstanding annexation agreements that may be viable.
The general fund revenues, DeWitt said, are projected to be $9,619,378 — which represents a decrease of $444,971 over the current year’s projections. This conservative budgeting, he said, has the city scheduled to save funding by year’s end to contribute to the city’s fund balance.
“A contribution has not been forecasted in the past few budget cycles for the city,” DeWitt said. “I feel this further demonstrates a very conservative approach taken this year in budget formulation.”
Another decrease of $50,000 in court fines is scheduled in the coming year — the line item has continued to trend low and DeWitt said city staff felt it was unreasonable to budget for revenue that would not be realized by the courts by year’s end.
General Fund Expenditures:
The total expenditures in the general fund next year are projected to be $9,605,107, as compared to $10,158,407 in FY 19-20. This represents a decrease of roughly 5.4 percent or $553,300.
Under the line item of Justice and Law, DeWitt said there was a decrease in spending of $51,303 from prior year. The decrease is reflective of a lower than projected state assessment, as current revenues were not on track again this year and over the past several years tracked behind forecasted projections. The line item was reduced to be more reflective of what the city may be spending in state assessments.
The budget for City Hall is anticipated to show a decrease of $1,948, which can be attributed to city staff canceling the current contract for City Hall’s security system monitoring and selecting a new system at a more affordable rate. Also proposed to show a decrease is the line item of City Council, decreasing by $7,817.
Under the line item of Planning and Development Services, the budget is planned to increase by $467,489. This is attributed directly to the CDBG demolition project the city is implementing. The grant is reimbursable to the city up to the $475,000 grant award, minus the city’s 10 percent match, meaning most of the increase will be covered through the grant, DeWitt said.
The police department budget, totaling $1,666,007, will decrease by $390,791 over the prior year — DeWitt said this could mainly be attributed to a decrease in capital purchases given the circumstances of the COVID-19 pandemic.
“The city has continued to budget local residency stipends and has added a sign on bonus program to help attract already certified officers to the city’s department,” he said.
The city’s police department has three vacancies. The state average, DeWitt said, for a department the city’s size is around eight to 10, so he felt like the city’s department was ahead of the curve.
The department’s budget also contains capital funds to add additional cameras within certain areas of the city to better deter and help solve crimes.
Under the fire department line item, the budget is projected to total $1,194,975, which is a decrease of $487,478 over the current year’s budget. This decrease is reflective of the difference of a new fire truck purchased in the current year, DeWitt said.
City staff that oversees fire recruitment county-wide is half budgeted under this line item, the county has agreed to continue to pay the other half of the position’s salary and benefits and provide the position’s transportation.
“That’s important when it comes to mutual aid,” DeWitt said. “We want to make sure we have people that show up to respond when we call for aid.”
The line item of the Public Works Sanitation department has proposed a decrease of $179,176 in the upcoming fiscal year due to the purchase of a rear load packer truck in the prior year.
Under Public Works Facilities and Grounds, the budget projects an increase of $61,048 attributed to the addition of a part-time employee to assist with the upkeep of the city’s new recreation complex and the purchase of a new vertical slope mower and attachments used to help care for the site. These expenses are split between the general fund and utility fund equally.
Mayor Foster Senn asked DeWitt to elaborate on the current status of the city’s recreation complex, to which DeWitt said they were currently in negotiations to complete the concessions, press box and restroom building, that would be located in-between the ballfields, as well as locating the best locations for shelters that could be used for parties, families, etc. Overall, DeWitt said the complex was approximately 75-80 percent complete.
Expenditures for the Parks, Recreation and Tourism department are projected to be $814,102, which is an increase of $72,680 when compared to the prior year. The main fluctuation, DeWitt said, was due to an increase in capital requests for the Wise Street Park walking trails and from moving a worker from the recreation complex budget in the current fiscal year (FY 19-20) to the PRT budget in the upcoming year (FY 20-21). The walking trails will be covered by matching grant revenue through the state’s trails program grant funding, he said.
The Special Funds line item of State Accommodations Tax Fund is projected to experience a decrease in revenue of $40,000 for a total of $100,000, which DeWitt said was a loss projected from the results of COVID-19. Of that amount, $28,750 will be transferred to the General Fund Revenue in accordance with state statutes, $22,500 will be transferred to the Tourism fund and the remaining $48,750 will be awarded to local groups to promote tourism through the local accommodations tax application in the upcoming year. This distribution formula is set for municipalities by the state.
Funds under the line item of the Japanese Gardens is expected to total $163,900 this year, after suggestions from Senn and other council members. However, staff agreed they would come back to council midyear of the upcoming fiscal year to see if the funding was available after seeing the impact of COVID-19 on the budget. Half of the funding for this line item is attributed from local hospitality and accommodations funds while the other comes from the line item of streetscape funds in the city’s budget.
In the Special Funds line item of the Local Hospitality and Accommodations Fund, the source of funding is the two percent tax levied on the sale of food and beverage and the three percent tax levied on lodging and accommodations in the city. DeWitt said for FY 20-21, staff anticipated receiving approximately $757,631 or a $153,902 decrease from prior year.
DeWitt said this number was forecasted and city staff hope the number projected is lower than what the city experiences. However, they took a conservative approach in budget planning, not knowing how the market would bounce back after the current pandemic.
The revenue received through the local hospitality and accommodations fund is transferred to other funds for promoting tourism. The proposed budget anticipates the following monies to be transferred to the following funds: the Newberry Opera House ($326,344), the proposal of upgrades to the Japanese Garden ($50,000), the new recreation complex build-out ($125,000) and the Firehouse Conference Center ($75,000) will receive the majority of these funds.
The city’s Tourism fund represents the budget for all City of Newberry marketing and promotions initiatives as well as the Firehouse Conference Center operations. Revenue in this line item is projected to be $387,439, with a decrease in expenses of $26,232 in the upcoming year. The main change, DeWitt said, was this line item’s dependence on hospitality and accommodations tax funding. One full-time position is added in this category to assist with bolstering the city’s line-up of events and activities. However, City Council asked staff to hold off on the hiring of the position until later in the fiscal year, when the effects of COVID-19 projections were visible.
The city’s Cultural Arts fund provides funding for four staff salaries and benefits for the Newberry Opera House employees ($289,563) and $105,376 towards operations for a grand total of $394,939. The total in this account shows an increase of $6,461 over prior year. DeWitt said staff did not propose to decrease any funding to the Opera House in a year, where the city was projecting to see a major decrease in revenue in hospitality and accommodation funding — the mechanism the city uses to fund Opera House operations.
Under the line item of the Community Housing Development fund, which allocates funding for special projects, the budget is projected to contain $425,454 or an increase of $50,000 from prior year. This increase is directly attributed to a match the city has scheduled for a $375,000 LWCF grant to improve Wise Street Park. DeWitt said this funding would be received late in the upcoming fiscal year as COVID-19 put a delay on the grant program. This will cause the grant funding to be carried into FY 21-22 as well.
The recreation complex budget for FY 20-21 is proposed to total $713,084 — a reduction of $641,151 from the prior year. This reduction is a direct reflection of completing many of the park’s major projects in the current fiscal year.
Proposed for the upcoming fiscal year is a two percent Cost of Living Adjustment for all employees.
The city’s overall general fund budget request has decreased by $553,300 in the upcoming year. City staff is proposing this overall budget decrease in order to shelter the city from any ill affects created by COVID-19. DeWitt said staff was still able to achieve this balance while still including an increase for employees, beginning renovations of Wise Street Park, upgrades in the Japanese Gardens and keeping capital costs at a minimum, all while navigating any potential repercussions from the pandemic.