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Democracy on the Front Lines
City Administrator’s Blog
Walter Denton
April 3, 2008
Now that we have talked about the budget structure and revenues, we can move on to proposed expenditures in the annual budget. Unlike the federal government, cities cannot budget in a deficit and revenues must meet expenses. Therefore, we are required by law to have a balanced budget. This is more difficult in some years than others, depending
on how your revenues are structured.
O’Fallon is more vulnerable to economic downtowns than most cities in the country-regionplaceU.S. The largest revenue source in most cities is the property tax, which is consistent and stable. Only 2% of our General Fund comes from property tax, and we rely primarily on the sales tax (49% of the General Fund). Sales tax revenues can fluctuate widely from year to year, bringing years of plenty or paucity depending on the regional economy and economic development opportunities. This year is one of paucity.
The budget reflects expenditures in all funds of $46,984,220, which are equally balanced by revenue. This represents a decrease of approximately 20% compared to the previous year. Most of the decrease is because of fewer large capital projects. Last year’s budget included such major capital improvements as the $10 million Family Sports Park, $6 million Conference Center, and $6 million in IEPA mandated upgrades to the Water and Sewer systems (booster pump station and two million gallon water storage tanks). Operationally, there are not many changes in this budget over last year’s.
General Fund operating expenditures are proposed to decrease 1% over FY2007-08. The total payroll for all operations, including all fringe benefits, is $14,988,740. Payroll is 15% of the total operating expenditures in the general fund. This budget includes a 4% across-the-board increase for non-union employees effective May 1, 2008. No new employees are budgeted in the General Fund.
Administration: Administration is only 3% of the General Fund, totaling $443,820. The City continues to improve efficiency and expand financial management through technology. With the hiring of an IT Manager in FY2008, the City will continue to invest in Information Technology in FY2009 with several major computer system upgrades. Over the years, we have found that investing in technology has increased employee efficiency and reduced the need to create new positions.
Public Safety: The Police Department is the largest budget in the General Fund, totaling $5,799,775. There are no new operational changes in the Police Department. placeEMS is budgeted through a dedicated property tax and totals $2,086,380. This budget includes the purchase of equipment to stock the new ambulance which will cost around $65,000.
Engineering and Public Works: Engineering staff will be involved in reengineering and rebuilding major arterial and collector roads and intersections, and improving capacities to handle increased traffic volumes in growing parts of the city. Major projects in FY2008-09 include the State/Obernuefemann Roundabout, Obernuefemann Road reconstruction, North Lincoln reconstruction, and the annual ½-cent sales tax Proposition S overlay projects.
The Water Fund is budgeted to decrease from $14,236,049 to $10,672,000, although that is primarily because the current year’s budget included the construction of a new pump station and two new water storage tanks (as mandated by the Illinois Environmental Protection Agency (IEPA)) and those projects should be completed in FY2009. No water rate increase is proposed.
The Sewer Fund is projected to decrease 6% from $4,474,535 to $3,656,000, and also is subject to mandated improvements from the IEPA. Sewer projects concentrate primarily on the aging underground infrastructure improvement program and expansion of capacity to meet demands of a growing system. We will make some upgrades to the Wastewater Treatment Plant in this budget, but we will need to make a major expansion to the plant in a few years. No sewer rate increase is proposed, but our revenues for sewer are not as strong as in the Water Fund.
Planning and Zoning: Quality building and sustainable development are keys to the future of O’Fallon. Residential growth has slowed from its record pace of 2006 and we are budgeting for fewer building permits than in previous years. Commercial development, however, is as strong as ever. We anticipate increased activity in development along Central Park Drive and Regency Park Drive, including retail, restaurants, hotels, and office buildings.
Parks and Recreation: The first full season of the Family Sports Park will occur this budget year and $523,650 is budgeted for general operations of the new park, including salaries, maintenance, and equipment. The general Park budget totals $1,680,330 and includes one new recreation employee (depending on revenues) and continuation of the department’s terrific recreation programs for all ages.
Fire: O’Fallon’s rapid growth also impacts the effectiveness of our volunteer Fire Department. The Fire Department’s first full-time Fire Chief will be hired soon, and he will be expected to implement many of the recommendations in last year’s Fire Study. The Fire Department budget totals $1,016,980 and is funded through a dedicated property tax. This represents a 21% increase from last year partly due to the hiring of a full time Fire Chief and the replacement of a fire engine.
Overall, the budget is healthy and meets the needs, goals and demands of the City in all service areas. O’Fallon is an exciting community and is doing a good job to balance the service demands of historic and new residential neighborhoods, regional shopping and interstate highway development, and newly growing centers of employment. The demands for resources in such a fast growing and diverse community are significant and pose significant budgetary challenges. While we strive to manage the growth in our community’s infrastructure, we must also manage the growth and capacity of the organization to maintain the City Council’s high performance expectations. The strong working relationship between City Council and staff in these areas has proven O’Fallon to be a special community.
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