Jun 12, 2022

Budget book shows city's attempt to remain revenue neutral

Posted Jun 12, 2022 10:00 AM

HUTCHINSON, Kan. — According to documents that the Hutchinson City Council will refer to in their general fund budget discussions on Monday, the valuation has been received from the County and shows a 7% increase in valuation which equates to a 2.96 mill decrease to remain revenue neutral.

Finance Director Angela Richard is presenting a revenue neutral budget to the council for their discussion.

Sales tax trends tend to predict that as inflation increases the cost of goods, sales tax will increase. The proposed budget predicts a 3% increase in 2023.

The personnel changes include 3 additional full time equivalents, also included in the budget is a 3% merit-based pay raise and wage compression adjustments.

Health insurance costs are predicted to increase 12%. The 2022 Projected and 2023 Preliminary budget numbers reflect that increase.

Inflation percentages provided by the CPI (consumer price index) for certain categories were suggested to departments.

Many departments that use gasoline and chemicals have seen significant increases.

Gasoline is up 38%

General Commodities 12%

Electricity 9%

Natural Gas 23%

Equipment and construction 11%

Due to inflation, staff were instructed to reduce their requested budgets.

Also included in the budget were outside agency requests, including:

Arts and Humanities Council $39,600

Cultural Activities Fund $47,250

Neighborhood Officer Position (Joint funded) $20,000

Start Up Hutch (Joint funded) $80,000

Chamber of Commerce Downtown Funds $50,000

Chamber of Commerce Fund $220,000

Downtown Architect $100,000

The Start Up Hutch request is an increase of $30,000 and the Chamber of Commerce requests an increase of $40,000.

Also, after the Chamber submitted their letter,they reduced their request from a full-time staff member for Downtown Development to a part-time. Additionally,the Chamber advises that there will be a request for

$100,000 to match to fund an architect for downtown Hutchinson.

Also to be discussed Monday are two alternate scenarios for increases in water rates for residential and commercial customers. The alternate scenarios provided by Burns & McDonnell don't have a significant impact on residential bills, with just pennies of difference in each scenario. However, increasing the minimum charge and decreasing the volume charge for large industrial users reduced the overall system increase.

The first alternative requires a reduction of 13% of capital projects, or about $700,000 from 2023-2027. The second requires a reduction of 23% of capital projects or about $1.26 million from 2023-2027.

This is without figuring whether or not stormwater utility fees will be reduced and if so, by how much.

Even the more revenue raising baseline scenario would still leave Hutchinson with water rates below the regional average.

The Hutchinson City Council will have its general fund budget work session Monday at 3 p.m. at City Hall.