‘We will not raise the tax levy for FY22’

Before the Newton City Council wrapped up its online budget workshop Monday night, city administrator Matt Muckler wanted to reiterate a point made by his finance officer:

“We’re entering this budget with the idea that we will not raise the tax levy for FY22,” Muckler said. “It will remain at $17.14 (per thousand dollars of taxable value) and that’s despite the fact that we didn’t quite get the valuation numbers that we were hoping for.”

According to Newton Financial Analyst Michelle Heisdorfer, the city’s total assessed property value was $919,354,430 for fiscal year 2021, which was up more than $83 million from the previous fiscal year. This milestone exceeded city staff’s estimates for the next two fiscal years at the time.

However, Newton’s fiscal year 2022 valuation is $924,588,012, which was less than what city staff had initially estimated. It was also $76 million short of Muckler’s personal goal of $1 billion of total assessed value, which he projected Newton could meet in the mid-2020s.

Currently, the city is still on track to meet that goal.

“But to tell you the truth: I was kind of projecting as a kind of ‘worse case scenario’ we’d be somewhere in the $940 million range for this coming fiscal year,” Muckler said. “We ended up being at $925 (million), so we’re a little bit lower than we were anticipating.”

If the city can secure a $1 billion assessment, it can improve its bond rating even further and be able to borrow money for a cheaper price.

The city’s total assessed value has grown steadily since fiscal year 2017, when it was valued at $795 million. Since then, the city has seen significant upward trends in its valuations. With only $5 million of growth to show for FY22, the lower-than-estimated valuation will inevitably impact budgeting.

“One of the things the staff was going to try to bring to the council was a budget where we didn’t have to borrow for some of our capital items, or (borrow) as much of our capital items,” Muckler said, adding that some general fund money will pay for some “lower ticket items.”

Also taking a hit is the city’s capital improvement plan (CIP). Although Muckler clarified that staff is still digesting and analyzing data, he expects the council will see reductions in the CIP between FY23 and FY26.

“There’s a lot of stuff that we need, (but) we’re just going to have to prioritize and figure out what are the most important things that we need to do — with a goal being we need to reduce the amount of bonding that we’re doing in the future,” Muckler said, noting this is what staff will work on for the next workshop.

BUDGET OVERVIEWS

Editor’s note: The following revenues and expenditures are based on city staff’s initial projections for the fiscal year 2022 budget and have not yet been officially certified or approved by council members. The following expenses and revenues are subject to change. Also, certain funds — Road Use Tax and Employee Benefits Funds, for example — were not included in the overview in the interest of space.

Police Department:

Newton Police Chief Rob Burdess reminded council members of a new line item included in his department’s budget. Following the recent reorganization of city services, the police department is now in control of nuisance fines and abatements, which was transferred from community services.

Compared to last year’s budget, not much has changed with the police department for FY22, though there are some noticeable differences. Burdess said the reason full-time salaries are down in the FY22 proposal is because of the retirement of a senior employee coming up later this spring.

Overtime could be one area in the budget where the police department could make further changes, especially after working through the pandemic. It, too, has made budgeting some items challenging for city staff.

“There may be some opportunity to reduce that number when we get closer to the final budget proposal. We’re still looking at that,” he said. “With COVID going on, some of the cancelled events we had in 2020 — it’s one of those line items that are pretty difficult to project out.”

Listed in the CIP are two squad cars, a pickup truck for the community services officer, vest replacements, taser replacements and a year-three payment for body cams.

Proposed general fund revenues for FY22: $310,050

Proposed general fund expenditures for FY22: $2,184,179

Fire Department:

Newton Fire Chief Jarrod Wellik prefaced his presentation by informing the council of his fully staffed station. Seven firefighters/paramedics are available for each shift, he said. The fire department is also operating with a fire chief, an assistant fire chief and three administration staff.

Which is good news, because calls for service have increased once again.

From 2010 through 2020, the number of calls to the Newton Fire Department have gone up from about 2,000 calls per year to 3,500 calls, most of which are for EMS. Last year, the fire station had just over 3,000 EMS calls; of those, about 720 were transfers out of town, which provides revenue to the city.

“We’ve talked about how the transfers bring in quite a bit of revenue to the ambulance service,” Wellik said. “They’re about 25% of our total call volume, but they actually amount to about 45% of our revenue.”

The fire department generates more than $1 million of revenue in ambulance service. Wellik provided data to the council that showed about three-fourths of the revenue comes from ambulance services. Other “big hitters” in that group are the township contracts for fire and EMS coverage.

Newton Fire Department also participates in the Ground Emergency Medical Transportation (GEMT) Program, which partially reimburses the city. Within the first year, Newton reported about $160,000 of GEMT revenue. EMS billing and service charge have also “jumped considerably over the last five years.”

Listed in the CIP are repairs to the front and back parking lot, a replacement ambulance with all the needed equipment installed, power loads and power cots and other small projects.

Proposed general fund revenues for FY22: $1,636,614

Proposed general fund expenditures for FY22: $1,839,119

Library:

Newton Public Library Director Nicole Terry told the city council that all staff salaries were removed from the local option tax fund, and, subsequently, the city’s pay plan. Last year, the library was asked to make more reductions to its FY22 budget, particularly its salaries.

From face value, the amount of money dedicated to the salaries for full-time and part-time employees in the budget seems like more, Terry said.

“But it’s not more, and we’ve consolidated our full-time employees on the first full-time salaries line and all of our employees on the regular part-time — making it easier for council (and the library board) to look at part-time and full-time,” she said.

Starting July 2021 (the start of FY22), the library staff will be removed from the city pay plan, which provided strict increases in salaries and ranges that some deemed too high when compared to similarly sized libraries in the state.

The library also made cuts in its mileage and tech services expenses; the latter of which is a $4,000 reduction. Over the past three years, the library has cut its benefits fund by a third, the majority of which coming out of the department’s group insurance.

“Not only are we saving in the general fund, but we’re also saving in the benefits fund,” Terry said.

Proposed general fund revenues for FY22: $192,777

Proposed general fund expenditures for FY22: $683,306

Public Works:

Newton Public Works Director Jody Rhone’s budget is one of the most complicated and robust among the city departments. In addition to general fund and employee benefits line items, Rhone manages a number of budgets using other funding sources available to the city; most notably, the Road Use Tax Fund.

Even though a street budget exists for the general fund, the larger street budget comes from Road Use Tax.

“When we do work for contractors … we purchase the equipment and supplies and stuff out of Road Use Tax. When we bill out that work the money comes back in and we cannot put that into Road Use Tax, so it just goes into the general fund,” Rhone said.

He added that public works tries to match its revenues and expenditures every year, projecting out how much work they’re going to do for contractors. Projections are still the same as last year, Rhone said.

The reorganization of city departments also affected public works, a portion of which were in community services. Two of the other major changes to the public works budget is the addition of the stormwater utility and future plan of putting parks operations at the former public works office.

“So there are several changes in the budget, and most of the changes are due to one of those three things,” Rhone said.

Proposed general fund revenues for FY22: $24,500 (street); $1,000,000 (solid waste); $500 (public works administration).

Proposed general fund expenditures for FY22: $4,000 (disaster services); $24,500 (street); $1,000,000 (solid waste); $29,000 (public works administration).

Community Services:

Newton Community Services Director Brian Laube said his department is leaving many things unchanged, apart from a few small increases. Laube has a proposed $7,969 increase in general fund expenditures for engineering, mainly due to salaries resulting from the reorganization with public works.

The airport’s revenues and expenditures are also relatively unchanged. This year, Laube projects the airport deficit will be $6,900, which, again, is relatively unchanged from the previous year.

Before sharing the parks, pool and golf budgets, Laube said all of these different areas rely on a shared staff and equipment stock. The reorganization prompted him to reevaluate some areas. For instance, parks is estimating a $40,000 decrease in salaries due to the reorganization.

Compared to last year’s parks budget, the annual deficit will be reduced by more than $100,000. Maytag Pool had an off year because of the pandemic and the ensuing repairs, but the proposed expenditures are largely unchanged. The parks salaries decrease shifted into a cemetery staff salary increase.

Proposed general fund revenues for FY22: $25,000 (engineering); $82,400 (airport); $68,000 (parks); $102,000 (Maytag Pool); $120,250 (Union Cemetery); $29,400 (Newton Memorial Cemetery).

Proposed general fund expenditures for FY22: $164,874 (engineering); $89,300 (airport); $385,477 (parks); $184,026 (Maytag Pool); $226,569 (cemetery).

Community Development:

Newton Community Development Director Erin Chambers said the goal for her department’s FY21-FY22 budget was to remain consistent with the FY20-FY21 budget. The community development budget covers economic development, marketing, building and planning and zoning.

“As proposed we will be able to continue to provide our current level of service in the upcoming year,” Chambers said.

Some changes, like the $10,000 reduction in the hourly salaries in the planning and zoning budget reflect the department’s decision to not propose a paid summer internship for the next fiscal year. Chambers said the reason was because there are too many uncertainties with the pandemic.

Chambers also noted the roughly $33,000 reduction in revenue from the community marketing’s Hotel/Motel Fund, which she suggested was also impacted by the pandemic. However, Chambers said marketing efforts will still take place.

Proposed general fund revenues for FY22: $103,700 (building); $51,575 (planning & zoning).

Proposed general fund expenditures for FY22: $90,609 (economic development); $114,027 (building); $249,424 (planning & zoning).

Administrative Services:

Newton Administrative Services Manager Katrina Davis said the biggest change in the administrative services budget this year is salaries, which received a $20,000 increase. The reason for this increase stems from the city’s hiring of an IT technical specialist in FY21.

The position was budgeted for an entry level position, but the specialist was hired in at a higher step “due to his many years of experience.” The increase in the budget for FY22 makes up for that difference on the steps that were not initially budgeted for FY21.

Telecommunications expenses will decrease by about $700 for administrative services and about $3,000 from other departments because of the city’s recent decision to install fiber internet. This will allow the city to cancel its six backup telephone lines.

Proposed general fund revenues for FY22: $22,700 (administrative services).

Proposed general fund expenditures for FY22: $284,859 (administrative services).

Finance/Executive:

Newton Finance Officer Lisa Frasier said there were very few changes in the finance budget, but staff are still working on a possible transfer from the TIF funds for work done by the finance department, which would count as revenue.

Apart from salary increases, auditing expenses and technology expenses, the finance general budget was similar to FY21. The executive department’s general fund expenditure budget was also the same, apart from a $1,000 increase in full-time salaries.

Proposed general fund revenues for FY22: $10,000 (finance); $13,170 (city center).

Proposed general fund expenditures for FY22: $217,506 (finance); $101,300 (city center); $188,700 (executive); $92,000 (legal).

Contact Christopher Braunschweig at 641-792-3121 ext. 6560 or cbraunschweig@newtondailynews.com