Marysville city officials got their first look Monday of the 2020 budget.
City Finance Director Justin Nahvi presented the budget proposal at Monday night’s finance committee meeting. The meeting was opened to all of council so members could hear what was in the works.
Nahvi recommended the city be “a little more aggressive” in servicing debt.
He said that over the past several years, the city has completed major infrastructure projects associated with growth. He said nearly every bridge, overpass or major thoroughfare has been improved but now most of the required projects are underway or complete so it is time to look at paying for them.
“Looking at next year, we are refocusing our financial priorities,” Nahvi said.
He said “trying to pay down short-term debt is my priority.”
The proposed budget allows the city to pay off about $700,000 of principal on almost $7 million of short-term debt and about $1.425 in principal on about $10.7 million in long term debt.
Nahvi did say the city will be looking at two major infrastructure projects — a second phase of the Route 31 work and improvements to Columbus Avenue. But, Nahvi explained, state and federal grants will pay for 75% of the Route 31 project and a TIF on the Woodside project will eventually pay for the Columbus Avenue work.
Nahvi said department heads are being told to keep operations expenses flat, not to ask for new positions and not to replace any equipment that is not critical.
Nahvi said the “major increase driver” for costs is salary and benefits for employees.
Nahvi said the budget proposal includes a 2.75% cost of living increase for collective bargaining unit staff in the police and fire departments as well as a 2.25% increase for all other employees. He said it also includes a 10% increase in health insurance costs.
“Obviously, we want to maintain the high level of service in the police department, the fire department, the roads and infrastructure, all while trying to be conservative for next year,” Nahvi said.
He said city officials will go back to department heads for any final revisions. He also said department heads have asked for eight new positions.
“Some are very minor in nature and some are more,” the finance director said.
Nahvi said those positions will be discussed at the next finance committee meeting and a recommendation will be made.
Nahvi said he was pleased overall with the budget. He said the city will need to issue some debt for the proposed water treatment plant and some other projects, but there will be no need to issue operational debt.
Officials say they expect to present the full budget at the Oct. 14 city council meeting.
Nahvi is projecting the 2020 general fund revenue at $22.86 million, which is above his 2019 beginning of the year estimate of $22.75 million, but below his current end of the year projection of $23.23 million.
“I try to be conservative,” Nahvi said. “If you overestimate your revenue for the next year and you have expenses like you had budgeted but you don’t hit the estimate, you are going to shoot yourself in the cash flow.”
Nahvi also said there likely will not be any rate reductions in 2020. He said that while the water and waste water funds are healthy, it is the capacity fees that have bolstered the accounts not the monthly recurring service fees. He said the capacity, or tap, fees are unpredictable and should not be used to make long-term decisions.
He added that while he is not saying there will be a recession, he needs to prepare on the chance there is.
“I am just trying to be cautious,” Nahvi said.
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