The budget for Midvale City for the year beginning July 1, 2017 and ending June 30, 2018 (Fiscal Year 2018) is taking shape. City staff and the City Council met in a day-long budget retreat on March 23, 2017 to discuss the current financial position of the City and the revenue projections and program needs for the upcoming fiscal year.
The City has ten funds: two governmental funds, six enterprise funds, and two internal service funds. The largest of these is the General Fund, which manages over half of the total funds administered by the City. In addition, the City Council serves as the board for Midvale’s Redevelopment Agency and Municipal Building Authority, which have their own separate budgets.
The major source of revenue for the General Fund is taxes. Taxes make up 68% of total General Fund revenue. 80% of that tax revenue is from sales and franchise taxes, and 20% is from property taxes. The property tax increase levied in the current fiscal year has greatly improved the capacity of the General Fund to serve the needs of our citizens.
Due to higher than expected sales tax revenue and lower than anticipated personnel costs, we are projecting a $700,000 - $800,000 surplus at the end of the current fiscal year. The City Council’s intent is to keep those funds in our “savings account”, or “rainy day fund”. Utah state law requires municipalities to have a rainy day fund balance equal to at least five percent, but not more than twenty five percent of General Fund revenue. With the addition of the FY 2017 surplus to our rainy day fund, the City will meet those requirements with a rainy day fund equal to eighteen percent of General Fund revenue.
The estimated revenue for the Fiscal Year 2018 budget is adequate to cover the City’s ongoing programs and services, so we do not foresee a property tax increase this year. Sales tax continues to grow with the improvement of the economy and the increase in the number of businesses coming to Midvale City. This new revenue helps offset the decline in the City’s building related revenue such as building permits and plan check fees, which have dropped off with the recent buildout of the Bingham Junction project.
The single largest program cost increase for FY 2018 is once again in public safety. Our contract with the Unified Police Department (UPD) is increasing by about four percent, or $257,000. We are looking forward to the addition of two new officers, fully funded by Salt County, to help with the policing of the area around the Midvale homeless shelter. UPD has done a good job of keeping that vulnerable population safe and protecting the nearby business community from risks associated with having the shelter nearby.
The Council has preliminarily approved three new staff positions: a Specialist in Geographical Information Systems to enhance staff’s ability to use available mapping technology; an Events Coordinator to serve as a liaison to Midvale’s many volunteer groups and to citizens wanting to use public facilities for events; and a Contracts Administrator to assist our legal and finance departments with compliance to City ordinances and policies.
Other projects and programs planned for FY 2018 include park and open space improvements, building and parking lot improvements, modest increases to employee wages and benefits, and the beginning of a three year project to improve City streets. The street improvements are being funded with proceeds from a sales tax revenue bond issued in April of 2017.
Midvale’s enterprise funds include water, sewer, storm water, sanitation, street lighting, and telecommunications (UTOPIA). The Council may need to increase water and sewer rates by 5-8% this year to keep aging systems in good working order. They are also considering a slight increase in garbage rates. We do not anticipate rate increases for street lighting, storm water, or telecommunications.
We invite you to participate in our budget process. The City Council plans to hold a public hearing and adopt a tentative budget on May 2, 2017. The tentative budget will be posted on our website at www.midvalecity.org. At each Council meeting between May 2 and June 13, the Council will review and discuss the budget with department directors. The Council will hold a second public hearing on June 6, 2017, followed by adoption of the final Fiscal Year 2018 budget on June 20, 2017.
As Mayor, I can assure you that your elected officials and City staff understand the importance of spending City funds wisely. Collectively, we weigh wants vs. needs, and we value your input as taxpayers. We view the stewardship of City funds as sacred and we appreciate your opinions and ideas as well as your trust and support.