Rochester City Council on Monday, May 14, unanimously approved a $37.8 million budget for the upcoming 2018-19 fiscal year, which starts on July 1.
Rochester City Manager Blaine Wing said the budget includes a $289,159 surplus, the majority of which comes from savings related to the city's revised health insurance structure, which is a self-funded system and will provide a savings of about $230,000.
While Wing said there are several areas where the money could be spent, he recommended adding the funds to the city's general fund reserve and discussed how best to use it in the near future.
Council in April expressed frustration and confusion in understanding some of the accounting in the proposed budget. Wing said the city's new financial software, new staff and new council members made the budget process more confusing.
"Although there were challenges, staff did certainly learn several lessons, and next year the budget process will be started earlier, have more meetings, and focus on each topic or area for that conversation," he said. "I will also be implementing a budget sub-committee that will include three council members, the finance director/treasurer, the assistant finance directors, other directors and myself. This new committee will start working on the city's FYE 2020 budget, what it should look like, include, etc. in July 2018. In addition to the format of the budget, this committee will be tasked with bringing forward the necessary steps, identify challenges and making recommendations on how to implement a multi-year budget."
Expenditures included in the approved budget include $5,295 for a two-percent wage increase for paid, on-call firefighters; $10,000 for a five-year contract for fiber optics to city hall; $22,100 to replace police patrol vests; $22,400 to replace fire station bay doors; $25,000 for non-union wage adjustments; $30,000 for audiovisual equipment upgrades at city hall; and $500,000 in transfers from the general fund to the streets fund for road repairs and improvements.
Overall expenditures total $37.8 million, up from $27 million in 2018 for all city funds. Expenditures from the general fund total about $13.3 million, up from $11.2 million the previous year.
Other expenditures for the upcoming fiscal year include two additional full-time staff members, as well as filling a vacant position. Those positions include a civil engineer, a public works service coordinator and a permit coordinator.
Total revenues are expected to rise by 19.1 percent from 2018 to 2019, with general fund revenues rising from about $11.4 million to about $13.6 million. That increase includes a 4.5-percent increase in real estate taxes; 45.3 percent increase in licenses and permits; 3.3 percent increase in state returns; 20.8 percent in sales and services; 37.5 percent increase in interest income; and 232 percent from miscellaneous revenue.
Councilwoman Ann Peterson said she wasn't in favor of hiring two of the new positions, which will be paid for through development fees, which she said wasn't a sustainable revenue source. She also said she was in favor of plans to formulate a multi-year budget plan in the future. "A three-year plan is great, and a five-year would be better," she said.
Councilman Ben Giovanelli said he was confident the budget was sound, despite a difficult budget process.
"It was painful, but these big changes are painful," he said. "I'm very confident we have done a good job, on balance, for what is in the budget and I'm happy to support it."
Councilman Stuart Bikson said he voted against last year's budget as it included increases he did not support. "In general, I think this is a good budget," he said.