Mayor's Proposed Budget: Fiscal Year 2017-2018
Dear Members of the Riverton City Council:
It is my pleasure to submit to you the Mayor’s budget for Riverton City for funding year 2017-2018. I would like to acknowledge the work completed by City staff in compiling the framework of this budget document. In preparing the budget, please note the key elements that served as the guiding principles:
- This budget reflects direction given by the City Council during Strategic Plan meetings that were held in January and February. The current Strategic Plan end date is June 30, 2017. After the adoption of the 2017-2018 budget the Strategic Plan for the fiscal year ending June 30, 2018, will be completed to reflect the Council’s priorities approved in the budget.
- For the third consecutive year, my proposed General Fund budget includes an amount for Council Directed Projects. This year’s budget appropriates $15,000 for each of the five districts and allows discretion from each Council Member to utilize these resources in the manner deemed most appropriate for their individual districts.
- The Mayor’s budget has been balanced with a budgetary use of General Fund balance of only $39,555 and continues to reflect that Riverton City does not assess a property tax.
- Riverton City continues to see growth in sales tax revenue. My proposed budget includes an increase in sales tax revenue of $250,000 over the current budget year. This represents slightly more than a 5% increase in accordance with the Governor’s Economic Forecast for the State of Utah.
- The cost to purchase culinary water from the Jordan Valley Water Conservancy District will increase by 8.33%; however, the Mayor’s budget has been balanced with no fee increases for City‚provided utilities.
- The current funding year is projected to end with an addition to the General Fund balance which will increase the fund balance reserve (the Rainy Day Fund) to approximately 17%. The projected addition to fund balance is a result of actual revenues (driven by the continued development activity in the City) exceeding projections as well as actual expenses being significantly less than budgeted amounts. The most significant factor in current year expense savings in the General Fund is reflected in the wages and benefits category. There were several positions that were vacant for a number of months as well as several vacancies that were filled at lower rates of pay.
- As a result of the favorable actual revenues and expenses in the current year, the Mayor’s budget also includes several capital outlay purchases and park projects in the Capital Improvement Fund, which will provide the means for offering increased services to the residents of Riverton. The expense lines in the Capital Improvement Fund include $144,000 for a bucket truck that has been long needed to service the tallest streetlights in the City and $200,000 for the purchase of a bobtail truck and attachments to supplement the City’s aging fleet of snow removal equipment.
- The Mayor’s budget includes $300,000 to provide essential repairs and improvements to Western Springs Park. This large regional park was a Salt Lake County facility until January 1, 2017, when it was conveyed to Riverton City.
- The Capital Improvement Fund also allows for the replacement of playground equipment in Midas Creek and Riverton Village parks at a cost of $50,000 for each park. Because both playgrounds are affected by storm water runoff, the general parks maintenance budget also includes costs to mitigate the runoff by relocating the playgrounds and making necessary improvements before installing the new playgrounds. Midas Creek Park will also require the replacement of the existing pavilion. The additional cost to prepare for the new structures and replace a pavilion is $102,000, which combined with the $100,000 for playground equipment brings the total cost for these two neighborhood park upgrades to $202,000.
- The Mayor’s budget includes revenue from development fees totaling $1,468,000, which is reflective of the robust development activity in Riverton City. The budget reflects continued projections of significant new starts in both residential and commercial construction. Not only are increased development revenues anticipated in the Mayor’s budget but also the offsetting expenditures which reflect the City’s obligations for associated developmental plan reviews, permitting, and inspection services.
- The groundbreaking that recently took place for the 85-acre CenterCal commercial development is cause for much optimism. In late spring of 2017, CenterCal Properties, LLC will begin construction on its 85-acre development in the Western Commercial District (WCD). When completed, this development will provide significant economic benefits to the City in the form of substantial increases in sales tax revenue and spurring investment from other sectors such as office buildings, additional retail establishments, and housing.
- Considerable infrastructure investment has been made in the WCD during the past several years, and will continue during the upcoming budget year, in order to make the CenterCal project possible. When market conditions became ideal, Riverton City was ready. The successful completion of this project will ensure the long‚term economic viability of Riverton City. As a result, you will see in my budget significant allocations of funding from Road Impact Fees, Culinary and Secondary Water Impact Fees, Storm Water Utility and Impact Fees, and REDIIF to complete infrastructure projects that will allow the CenterCal development to begin construction during the upcoming fiscal year.
- One of the significant investments to infrastructure in this budget provides for the construction of a 5-million gallon culinary water tank on property located in Herriman but owned by Riverton City. This water tank is necessary to accommodate required demand and fire-flow as a result of the rapid growth in the WCD. In addition, the storage capacity will allow the City to mitigate peak demands, which will help moderate future rate increases. The total project cost is $5,676,703, of which 80%, or $4,541,355 is eligible to be paid for with culinary water impact fees, the remaining 20%, or $1,135,500, will be paid for by culinary water operations. At this time, the fund balance for culinary water impact fee is $1,321,675 short to fund the entire eligible amount. As a result, this budget reflects a transfer of that amount from the culinary water fund to the culinary impact fee fund to establish an interfund loan that will be repaid through the collection of future culinary water impact fees.
- The total wage and benefit budget for the General Fund includes several additional positions as directed by the Council during the Strategic Planning sessions. Those positions include a part-time legal assistant to cover the increased caseload in prosecution, a seasonal receptionist for the Parks and Recreation Department, a part-time janitorial position for the Old Dome Meeting Hall, and two seasonal workers each for the Parks Department and Public Works Department.
- The Mayor’s budget also includes a proposed merit increase of 3% for staff. This is an average amount; based on the results of performance appraisals and market adjustments some employees will receive less than 3% while others may receive more.
- The cost of providing medical insurance continues to increase nationwide. The initial proposal for 2017-2018 premiums featured a 12.2% increase. However, after further review of favorable employee utilization rates as well as increasing employee responsibility for co-pays, deductible amounts, and out-of-pocket maximums, the final negotiated renewal increase was reduced to 5.8%. The wage and benefits budget includes an increase of 5.8% over the previous year expense for medical insurance. As was previously mentioned, this is only possible due to structural changes in the employees’ health insurance plans.
- The total increase in the General Fund wage and benefit category is increased by $46,810. There are two major factors that mitigate the impact to the General Fund. The proposed budget reflects the substantial savings achieved through a reduction in force for the Assistant City Manager position. Also, as the result of an analysis completed to determine appropriate allocation of salary and benefit expense to enterprise funds, the Storm Water Utility is now absorbing some of the cost of wage and benefit expense that was previously allocated to the General Fund.
With that brief overview, again it is my pleasure to present the 2017-2018 Mayor’s budget for your review.
Mayor Bill Applegarth