May 3, 2024
By: Dwayne Page
Good news, bad news!
Property tax rates for City of Smithville landowners will not be going up this year, but water and sewer rates will be raised by 4% in order to keep utility revenues ahead of expenses, per state requirement.
The Smithville Mayor and Aldermen will consider first reading adoption of a budget ordinance for the 2024-25 fiscal year during Monday night’s regular monthly meeting at 6 p.m. at city hall.
Although there were a few major spending projects this past year which affected the budget, Mayor Josh Miller said the investments were needed and he is pleased that the city was able to fund them without any need to increase the city property tax rate in the new year ahead. In keeping with his admonition to “have a year of savings” Mayor Miller said the aldermen postponed some budget requests by department supervisors until next year or later.
“We have done a lot of infrastructure (capital outlay) projects and we have had to amend the budget a few times this year because of it,” said Mayor Miller. “We have spent quite a bit of money but we have not borrowed money and we are not going up on taxes. Next year when we set the new budget, it looks like we will be profiting,” he said
One of the projects undertaken this year was a rehab of the swimming pool. ”People want the pool open during the summer year after year but to open it for this season we had to fix it. The pool is about ready to re-open now. It has new tile and will soon have new LED lights. Its a lot safer than before,” said Mayor Miller.
Another major project, a new irrigation system at the golf course is also almost complete.
The city property tax rate is 0.7523 cents per $100 of assessed value and it is expected to generate $1,360,000 in revenue which is about the same as the actual property tax collections of $1,360,762 in the year 2022-23.
The new rates for city water customers will be $8.26 per thousand gallons of usage (up from the current rate of $7.94 per thousand). Rates for customers outside the city limits will be $12.38 per thousand (up from the current rate of $11.90 per thousand. City sewer customers will pay $7.69 per thousand (up from the current rate of $7.39 per thousand).
The proposed budget includes a 3% across the board pay raise for city employees, the creation of a new part time city codes/ordinance enforcement officer position, and funding for a few capital outlay expenditures. The city is opting out of its current Nationwide retirement offering and joining the state’s 457B plan hoping to improve retirement benefits for employees who participate. With the change, the city’s local match for those who enroll will be 5%, up from the 3% match under the Nationwide plan. The largest single expenditure planned (which may be funded through a budget amendment in the current year 2023-24) is for refurbished radios including portables, mobiles, and repeaters to upgrade the communications system for the police department and mobiles and repeaters for the fire department. The total cost for these refurbished (less expensive than new) radios comes to $273,307 which is in addition to the $115,000 allocated in January for new fire department portables. The city has little choice but to make the investment due to changes in technology which will soon make their current radios obsolete and unusable. The city will use funds from the general fund surplus to pay for all the radios.
Because of one-time big-ticket items like the radios and other improvement projects undertaken, such as at the golf course and swimming pool without allocations in the budget for them, the bottom line at the end of the fiscal year, June 30, 2024 will show the general fund going into the red by $1,228,959. However, city officials point out that this deficit number is a bit deceiving in that while the city did overspend its budget, the municipality actually has the money to cover the overage. It just has to be taken from the city’s general fund reserves through budget amendments. And if spending is held in check, the city is to show at least a $178,906 surplus in the general fund by this time next year at the close of the 2024-25 fiscal year. The city’s general fund concluded the 2022-23 fiscal year at $169,029 to the good.
In the water and sewer department, the budget projects city metered water sales to be $1,443,500 for the year 2024-25, up from the actual collections of $1,357,335 for the 2022-23 year. Sewer charges are budgeted to bring in $1,152, 000 for the year compared to actual collections of $1,104,591 for the year 2022-23. Projected water tap fees are budgeted at $38,000 for 2024-25, below the actual collections for water tap fees of $41,897 for 2022-23. Sewer tap fees are budgeted at $45,000 for 2024-25, just below actual sewer tap fee collections of $50,700 for 2022-23.
The water and sewer fund is expected to finish the 2023-24 year in the black by only $362 on June 30th but is projected to show a surplus of $1,548,462 by the close of the 2024-25 fiscal year, however all but $1, 213 of that is due to onetime ARP & CDBG grant funds for sewer rehab. According to city officials, the state does not recognize grant income as part of the city’s operating budget in terms of profit or loss. A year ago, the city ended the 2022-23 fiscal year with a surplus for the year of $875,264 in the water and sewer which was actually approximately $150,000 not counting grant income.
The new budget also includes the following in new spending:
*The addition of a part time codes enforcement officer (budgeted salary $30,000 per year)
CAPITAL OUTLAY:
* Public Works: Purchase of F550 with bed crew cab style dump truck to replace a 2002 F350 model.-$85,000 (funded 50% or $42,500 by the general fund and 50% or $42,500 by the water & sewer budget)
*Public Works: Purchase of F-150 pickup truck-$46,000 (funded 50% or $23,000 by the general fund and 50% or $23,000 by the water and sewer budget)
*Public Works: Purchase of (2) ZTRAK lawn mowers-$24,000
*Public Works: AC Machine-$6,600 (new means of substituting refrigerants in the A/C system of city owned vehicles)
*Purchase Fire Hydrants: $40,000
*Police Department: Purchase of Dell Touch Screen Computers for patrol cars-$15,000
*Financial Administration: G-5 Software Upgrade-$55,200 (funded 50% or $27,600 by the general fund and 50% or $27,600 by the water and sewer budget)
*Street paving -$100,000
*Airport: Grounds Equipment Grant-$130,000
TOTAL GENERAL FUND CAPITAL OUTLAY: $408,700
WATER AND SEWER FUND PROJECTS:
*Fixed Asset additions: Sewer rehab project grants-$2,100,000
The General Fund Debt Service for the police department building is projected to be $162,550 for the year including $100,000 in principal payments and $62,550 in interest on long-term debt
Ending cash by June 30, 2025 in the general fund is estimated to be $4,947,446, down from the actual ending cash for 2023 of $6,055,430. The water and sewer department’s Ending Cash is figured to be $7,027,546 by June 30, 2025, up from $5,997,109 for 2023.