council looks ahead to 2018

Mason City Council approved the 2018 budget at the end of 2017. The budget is a guide to spending for the year and identifies major projects and initiatives, supports ongoing operations, guides service levels, and more.

Revenue estimates, capital project lists, service levels, fuel and supply costs, benefits, and a host of other factors figure into the budget. Careful thought is put into the budget as it is created. The result is a semi-flexible plan that allows for changes to be made as needs, priorities, or revenues change. At the same time, it is firm enough to provide the city staff with a basis on which to schedule projects and services.

CoM General Fund Budget 2018

budget overview

The 2018 Budget includes over $21 million for capital projects and equipment; $19.1 million for capital projects; $2.1 million for vehicle replacement and $668,720 for other equipment. Compared to 2017 Budget of $14.8 million for capital projects and equipment; $11.6 million for capital projects; $2.6 million for vehicle replacement and $600,000 for other equipment.  The increase of $4.3 million is related to capital project investment within the community. Below are some of the key projects identified in the 2018 budget:

Projects
Installation Third Aeration Mixer $1,276,000
Community Center Improvements $1,200,000
Cox-Smith Road Reconstruction $1,100,000
SR741/Parkside Intersection Improvements $750,000
Muddy Creek Bike Path Project $550,000
SR741 Improvements Design (Phase I Spy Glass to Welden Dr.) $400,000
Cox-Smith Road Improvement $400,000
Common Ground Park Improvements (Matching Fund Transfer) $300,000
Snider Road Widening Phase I $300,000
Innovation Way Bridge Rehabilitation $300,000
Municipal Center Plaza Improvements $250,000

There are several significant projects/initiatives that have been proposed, evaluated or currently in the pipeline, whereby funds were included in the 2018 Budget only as placeholders until follow up Committee meetings and Council work sessions could ultimately provide the direction for moving forward in the future.  This includes a total of $6 million for park, golf course and outdoor pool replacement efforts.

The 2018 Budget also includes continuation of aggressive annual repair and maintenance programs outlined below.

Annual Repair & Maintenance Programs
Street Maintenance Base $1,025,000
Street Maintenance Alternate $1,000,000
Municipal Center Projects $300,000
Water Reclamation Plant $290,000
Network Infrastructure $250,000
Annual Stormwater Rehab $250,000
Community Center Enhancements $200,000
Street Light Replacement $130,000
Annual Sidewalk/Curb Replacement $110,000
Annual Street Striping $75,000
Community Center Equipment $70,000
Street Striping Program $60,000
Golf Cart Path Repairs $57,500
Parks & Bike Path Paving Program $50,000
Mun. Center Concrete Repairs $50,000

Again this year the City will continue the strategy to not schedule individual vehicles for replacement, but to rely on contingency amounts to more closely align vehicle failure with replacement. This practice of budgeting a “replacement reserve” for equipment allows greater flexibility and enhanced timing for possible equipment replacements. The City now has a reserve set aside that could accommodate outstanding “scheduled” replacement of City fleet. The 2018 Budget includes just over $2 million to be set aside for vehicle and equipment needs including over $1.3 million carried over from prior years. The Budget also includes refurbishing the hydraulics on Tower 52, in order to extend its useful life, in the amount of $70,000 which will be paid from the Safety Fund.

With the success of this strategy for vehicle replacement the City has initiated similar reserve practice for street resurfacing by budgeting $1,025,000 million for the annual street program and an additional $1 million set aside to either enhance the program based on a good market or build reserve for the future in more aggressive years of street resurfacing. The target is to gradually build a significant enough reserve to maintain streets and level annual funding amounts despite peaks in programs.

This year the Campus Security concept was implemented and has proven to be very successful as a resource for Community Center operations as well as school safety. The 2018 Budget includes $210,000 of funding for expansion of the program.

The budget continues to be based on conservative practices, which have helped the City for long-term financial health, even during economic downtowns. There remains 22 full time vacancies throughout the organization. The 2018 Budget includes extending the conversion of Fire Department part time hours into three new full time firefighter positions and the addition of an aquatics position allowing for the expansion of existing programming opportunities and increased supervision of lifeguard operations.  Next year the City will continue its work to fill vacant positions by evaluating operations and strategically sharing resources across departments likely leading to retitling positions to better reflect responsibilities.

Some of the City’s strategies for revenues include: budgeting income tax revenues at $31.5 million-at the 2015 actual receipts level, zero local government funds from the State and no additional revenues from local job growth which will occur in 2018. General Fund personnel and operating expenses have increased slightly at 5%. General Fund transfers include $3.2 million for the Safety Fund’s portion of the income tax. The Community Center Fund’s revenue and expenses increased to realign the activity to match the ongoing success of the Community Center. The operating budget for the eight major operating funds reflect a 3.8% increase over the 2017 Budget. The City’s outstanding debt is anticipated to fall by almost $4.3 million.

General Fund Budget
(million)
2014* 2015 2016 2017 2018
Income Tax $24.5 $25.5 $25.5 $26.7 $31.5
Other Revenue 3.6 3.8 3.8 4.1 4.7
Revenue $28.1 $29.3 $29.3 $30.8 $36.2
Personnel $13.4 $13.7 $13.7 $14.6 $16.3
Operating 8.1 8.9 8.9 9.3 10.4
Transfers 6.1 6.2 6.2 6.3 6.8
Expenditures $27.6 $28.8 $28.8 $30.2 $33.5

* Starting in 2014 an additional 0.12% income tax was approved by the residents to provide safety services to avoid increases in property taxes.  The additional income tax revenue is transferred to the safety fund to provide fire and EMS services.


outlook

For 2018, City Council continued its practice of conservative budgeting, which has helped the city maintain long-term financial health even during economic downturns and a slow recovery. “A lot of hard work by all departments and employees has gone into controlling expenses,” said City Manager Eric Hansen. “The 2018 budget represents a fiscally prudent approach to municipal finances and a workforce committed to cost savings, efficiency and sound investment in growing businesses. By all of us working together, we will keep our community strong.”