Complete Document - City of Auburn

Budget Message (continued) May 28, 2002$1,130,318 (3.54%) for FY 04. The major sources of revenue are expected to remain strongthrough next two fiscal years, as shown in the table following this paragraph. Sales taxes areestimated to increase by 2.33 percent in FY 03 and by 2.27 percent in FY 04; ad valoremtaxes by 4.06 percent in FY 03 and by 4.20 percent in FY 04; and occupation license fees by3.13 percent in FY 03 and by 2.53 percent in FY 04. We are cautiously optimistic about thelocal economy based on the recent numbers that we have. However, we believe that ourrevenue estimates are realistic.Top Four General Fund Revenue SourcesFY 02FY 03 FY 04Budget^ Projected Increase As % Projected Increase As %Sales Taxes $ 12,900,000 $ 13,200,000 $ 300,000 2.33% $ 13,500,000 $ 300,000 2.27%Business License Fees* 4,965,000 5,065,500 100,500 2.02% 5,170,000 104,500 2.06%Occupation License Fees 4,800,000 4,950,000 150,000 3.13% 5,075,000 125,000 2.53%Ad Valorem Taxes 1,600,000 1,665,000 65,000 4.06% 1,735,000 70,000 4.20%^ As amended at Mid-Biennium or as proposed to be amended at End of Biennium.* Includes franchise fees, residential and commercial rental fees and construction permits and fees.The budget has one recommendation for an increase in revenue and that is to raisesewer rates by five percent in each of the next two years. The last sewer rate increase wasin 1994 and the cost of providing that service has climbed since that time. This five percentincrease is projected to result in an increase of less than fifty cents in the minimum monthlybill and less than $1.00 in the average monthly bill for residential users. The need for anincrease in the sewer service charge is not based on the improvements to the plants that willbe made over the next two years. The sewer bond issue and the loan from the StateRevolving Loan Fund will pay those costs. Future revenue from new customers will pay thecost of debt service for these improvements.This summer, the Finance Department is scheduled to conduct the first triennialreview of the City’s revenue structure. Following this review and analysis, the staff will reporton the growth and stability of the City’s various revenue sources and will makerecommendations concerning methods for strengthening the City’s financial position andimproving the equity of the licenses, taxes and fees that support the provision of the variousCity services.Expenditures-The departmental budgets are projected to increase by 5.42percent in FY 03 and by 2.71 percent in FY 04. The increase in departmental spending forFY 03 is $1,202,916 and for FY 04 is $634,378. The increases in department budgets aredue, in large part, to the across the board pay raises of three percent, and the funding of themerit pay plan for both fiscal years. These increases comprise one-third of the total increasein the departmental spending plan and 8.89 percent of the total increase in the General Fundbudget in FY 03. The FY 04 increase in personnel costs exceeds the increase in thedepartmental spending plan for FY 04. The total General Fund budget for FY 04 represents a$483,039 decrease from FY 03. Non-routine “big ticket” capital outlay items included in thedepartmental budgets are the Fire Division’s ladder truck in FY 03 ($550,000) and new fire31