We all hear or read about it. Some say we should cut taxes, but then they say the City needs to do more. This may include more street repair or may be make improvements to areas such as Grant Avenue. Or maybe it is to make major improvements on South Spring Valley that were mentioned recently that apparently were promised 17 or so years ago. Soon the City staff will begin working on the 2025 City budget and in early June this budget will be taken to the City Commission for review, adjustments, and ultimately approval.When we discuss budgets, I often find it best to go with some basics. I have found one of the best ways to discuss budgeting it so bring out the “Budget Box”. May sound funny, but bear with me for a few minutes. For this example, we are going to just deal with the funds that are dependent on property taxes and not the funds that are enterprise funds such as water, waste water, sanitation, and storm water.So, the size of the box is determined by the amount of revenue the City receives. We will discuss other funds later, but for now let’s just focus on property taxes. In the large box there are 5 smaller boxes that fill the space. All 5 of these funds receive property tax, motor vehicle and other vehicle taxes. For the most part each smaller box stands on its own and can’t be reduced to make room for another except for 1 that we will mention later. The smallest of these is for Economic Development as about 2% of property taxes are needed. The City has an agreement with the County and the Chamber of Commerce to operate the Economic Development Committee. There is some funds in reserve for some projects from time to time.The next on the list is the Fire Equipment Reserve that needs about 4% of the taxes. Even though the Fire Department is included in the General Fund, State law allows a reserve fund for equipment. For the most part this fund is to build a reserve as bottom-line, the equipment used by Fireman is not cheap, so funds are available when needed. Next is the Library Fund that is used to fund the Dorothy Bramlage Public Library. This takes about 8.4% of your tax dollar.For 2024, a smidge more than 18% of taxes is needed for debt service of General Obligation Debt. 10 years ago, it was over 50%. The Debt service Fund also receives a 1% City sales tax. The refinancing of bonds over the past few years to lower interest rates allowed less tax dollars for debt and those could be moved to the General Fund.The General Fund is the largest of the 5 as over 2/3rds of your taxes go here. The General Fund includes Police, Fire and EMS, Streets, Parks, and Municipal Court and Legal. General Fund dollars also are needed for Administration and IT, but the transfer of enterprise funds also contribute. This fund also received revenue from sales tax, franchise fees, fines, and other fees.So, let’s focus on the large Budget Box. Some may say we need to spend more money on streets for example. We have basically 2 choices, make the box bigger or take something out of a box. Each year we hear of many ideas, but to spend more you have to increase taxes, therefore it boils down to priorities.Naturally everyone has their individual thoughts but remember what is important to you may not be as important to someone else. One may want more street improvements, but another may want more dollars for Parks and Recreations. Of course, we still have to fund Police, Fire and EMS.As I mentioned above, lowering the large amount of debt that was accumulated at the time when the City hit Financial “Rock-Bottom” is going to free up more funds. In 3 years when the 2028 Budget is being developed there will be $3 Million less needed for debt service than is needed in 2024. The “debt tunnel” has been long, but the light is shining. This debt path has been tough, and funds spent covering that debt could have been used elsewhere. However, “It Is What It Is.” We can cut many expenditures but that one can never be cut out of the budget until it is retired.There will be many ideas discussed when the 2025 budget is developed. However, it simply boils down to the concept of the “Budget Box”.

Allen Dinkel releases the 515 Report