1. FY18 Proposed Budget Public Hearing & Discussion and Debate
April 19, 2017
Anne Davis, Interim City Manager | Denise Brown, Finance Director

2. FY18 Budget Process Tonight City Council will:
Receive a recap of the FY18 proposed budget
Hear public comment on the budget
Further question staff
Start discussion and debate
Begin making motions to amend budget or direct staff to come back on May 3 with further information
FY18 Budget Process

3. FY18 Budget Recap Operating budget: up $239,462 (+5.0%)
First increase in three years
Capital budget: down $524,031 (-43.7%)
FY17 budget had a lot of one-time, large expenses that have now come off the books
Education & County budget assessments are currently unknown (this budget reflects the FY17 amounts)
Total budget down $284,569 (-2.9%)
However, revenues are also down by $410,498 (14.1%) necessitating a $.045 tax increase (from $21.50 to $21.95)
FY18 Budget Recap

4. FY18 Budget Recap Property Tax Rate Increase
City’s share of budget increases the tax rate by $0.45, from $21.50 to $21.95 (2.09%)
However, many residents will see a second straight year of a reduced tax bill!
Homestead Exemption Increase
State increased amount shielded from municipal taxation from $15,000 to $20,000
Increased last year from $10,000 to $15,000
Net Effect on Taxpayers
All 1,174 Homestead property taxpayers would see a tax decrease of $110 plus an average increase of $45 due to the tax rate, for a total tax cut of $65
All commercial (201) property taxpayers would see an average increase of $45
All non-Homestead residential (1,170) property taxpayers would see an average increase of $79
FY18 Budget Recap

5. FY18 Department Highlights
Community & Social Services (+2.0%)
Includes required funding to nonprofits, such as Cobbossee Watershed Association. Also includes General Assistance funding, which is up $2,000 to reflect an increase in demand
Includes voluntary funding to nonprofits, totaling $117,272 (same as FY17)
Fire/Ambulance (GF) (+2.1%)
Represents cost for Fire Department and City’s assessment paid to be a member of Ambulance service
Increase in all partner community assessments due mostly to large increase in “uncollectibles” – assessments still less than they were two years ago (FY16)
Second year of not paying 15% salary assessment – saves approx. $90,000
Funds ½ costs for new Chief’s vehicle (other ½ comes from Ambulance Fund)
FY18 Department Highlights

6. FY18 Department Highlights
General Government (+1.6%)
Includes Mayor/Council, City Manager, City Clerk, Finance, HR, and Legal
Two new tablets for Council to continue 4-year replacement plan
New audience chairs for Council chambers
Brings P/T Sewer Clerk to F/T
35% reduction in City Hall staff since 2010
Will help improve turnaround times and customer service while reducing OT expenses
Library (+5.2%)
Increases DVD purchases so can begin replacing core collection of old VHS titles
Funds streaming services and two new public computers
Still reflects $25,000 savings from prior year reorg
Technology (-13.2%)
Down sharply due to one-time purchase of server in FY17
Includes new tabletop microphones for Council Room to replace ear mics
Includes $30,000 to fund broadband study outright
FY18 Department Highlights

7. FY18 Department Highlights
Planning/Economic Development (+2.3%)
Eliminates $7K stipend to City Manager for econ dev duties
One-time cash out for planned retirement of Admin. Asst. ($6,963)
$5,000 contractual increase for Economic Development Coordinator contract
Police (+0.4%)
Funds replacement of 13 standard issue firearms and supplemental patrol rifle
Funds new lockers, foot lockers, and locker room benches
Funds 1 of 2 requested vehicles (paid for outright – no debt)
Funds new radio repeater system (financed – will be department’s only debt)
FY18 Department Highlights

8. FY18 Department Highlights
Public Works: Buildings & Grounds (-9.9%)
Down significantly, mostly due to one-time purchases in FY17 budget
Anticipate increase in electricity, up $12,000 to $132,000
Public Works: Highway (-16.2%)
Also down significantly due to one-time expenses coming off the books
15% increase in road salt as a reaction to this year’s icy winter ($115,000)
$8,000 for purchase of new sander
Capital budget continues to carry debt of massive investment by City Council in infrastructure (i.e. road paving plan, sidewalks)
Purchase new vehicle lift outright & finance new excavator with trailer to replace 2011 backhoe/loader
Unable to fund request for new plow truck to replace 2008 vehicle
FY18 Department Highlights

9. FY18 Capital funds 5 of 9 requests, totaling less than $200,000

10. FY18 Revenue Revenue: Fund Balance FY17 use of fund balance: $567,000
Expect to replenish at least $185,000 of the $227,000 in fund balance used
Brings Fund Balance to $1,350,000 at end of FY18
Represents 13.8% of overall budget, still within auditor’s range

11. FY18 Tax Increment Finance (TIF) Districts Budgets
Libby Hill TIF
Second year in past seven that the fund’s revenues will exceed expenses
Began year $715,310 in debt to General Fund, expect to end year $674,372 in debt (at worst)
Fund will repay entire debt in FY23 and will begin generating a surplus
Position has improved since initial FY12 projection, when we anticipated a deficit of $1.1M for FY17 and no repayment until FY25
Downtown TIF
Will generate $182,246 in tax revenue and incur $105,346 in expenses
$55,346 in debt service payments and $50,000 to Gardiner Main Street & Johnson Hall ($25K each)
Surplus of $76,900 funds City budget costs related to downtown
Debt service costs come off the books in FY21, freeing up $50,000+ annually that can be used within the district for other purposes
FY18 Tax Increment Finance (TIF) Districts Budgets

12. FY18 Ambulance Budget Ambulance (+4.2%) FY16 & FY17 were banner years
Reduced partner community fees by an average of 30% in FY17 and by the end of this FY we should have paid back the $332,148 owed to the General Fund
However, in FY18, due in large part to very high uncollectibles, we will be passing along a 50.9% overall increase to our partner communities
Silver lining: still below the FY16 assessment amounts by several thousand dollars
Includes funding for higher cost medical billing service with better collection rates
Funds ½ of Chief’s new vehicle (other ½ comes from Fire budget in GF)
Caution: the loss of any partner community will put this service in jeopardy
FY18 Ambulance Budget

13. FY18 WasteWater Budget Wastewater (+21.6%)
First time surpassing the $2 million mark
Includes one-time capital expenses including new screw pump ($267,744) and boiler ($31,920)
Will use all of Equipment Reserve and some Fund Balance
Fund balance would be $525,425, 26% of proposed budget and well above auditor’s recommended range
Should begin replenishing capital reserves in FY19
Despite projected need for rate increase, FY18 will mark seventh straight year without one
FY19: rate increase for all, Storm Water fee for some, or something else?
Increases funding for sewer discount program for the elderly, veterans, and disabled ($5K - $20K) based on proposed changes
FY18 WasteWater Budget

14. FY18 Proposed Budget What you are now being asked to approve…
General Fund budget of $9,750,393.58
$5,692, (City)
Operating: $5,016,608.15
Capital: $676,267.36
$67, (Overlay)
$3,667, (Education)
$322, (County)
Est. tax rate increase of $0.45 to $21.95
Ambulance Enterprise Fund budget of $1,159,034.37
Wastewater Enterprise Fund budget of $2,012,427.00
Tax Increment Finance District budgets of $650,170
FY18 Proposed Budget

15. FY18 Budget What’s next… Process
Tonight: Further questions of staff? Begin making motions to amend budget or to direct staff to come back on May 3 with further information
May 3: Further public comment, continue making motions to amend budget, move budget (as amended?) to first read
May 17: Further public comment and debate on budget first read
June 7: Further public comment and debate on budget second/final read
FY18 Budget What’s next…