Mark Beckdahl, the finance director for the city of Springfield, said the projected deficit is mainly due to the city having 27 payroll cycles next year instead of the usual 26 in a given year. He said it’s something that occurs every 11 years.
Beckdahl said personnel services, including salary and benefits for a large portion of city employees, will account for roughly $33 million of general fund expenditures for 2020 and employee health insurance will account for $6.7 million.
Those figures are based on the city having 585 employees next year, that is based on the city reaching full employment. Those projections do not account for current staffing levels.
“I don’t know of any better way to do it because it would be an absolute shot in the dark and probably wrong, either too high or too low,” said Springfield City Commissioner David Estrop on how the city’s finance department determines budget projections for staffing.
“So I think this is a safe way to do it, knowing full well that we will have lapses,” he added during a public hearing over the budget held this week.
The city also expects that 57% of general fund expenditures will be related to public safety, accounting for $28.5 million. That includes a police force of 131 officers and fire department that employs 127 people. The city’s court system is expected to spend $5.5 million dollars next year.
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As part of the budget proposal for next year, additional money is expected to be transferred from the general fund to pay for several scheduled infrastructure projects.
Beckdahl said that includes $750,000 to be placed in the city’s permanent improvement fund to help pay for the reconstruction of Broadway Street, which is expected to start early next year.
The project will include sidewalk, curb and gutter work and will include portions of the street that are between North Bechtle Avenue and Park Road. The project is expected to cost about $2.1 million, with $900,000 of that being covered by state funding.
The city projects revenues for its permanent improvement fund to be about $6.7 million next year, with $4.2 million coming from city income taxes. About $3 million will go towards neighborhood street paving projects and an additional $2 million will go towards general street paving, according to a copy of the budget proposal.
Another project the city is working on includes a roughly $7 million downtown Springfield parking garage, with construction on that project beginning earlier this year. Though construction is slated to be completed in April, expenses for the project will not be reflected in the 2020 budget since it is already financed, Beckdahl said.
The parking garage will be three-stories and include 305 parking spaces. Earlier this year, the commission voted in favor of entering a joint agreement with Clark State Community College, securing the funding to construct the garage. The joint agreement included $2.55 million in state funds, $1 million from Clark County and $3.3 million from the city.
The current budget proposal also factors in equipment expenses for next year such as the purchase of eight police cruisers, a new fire engine, a prisoner transport van, a parking control vehicle and two dump trucks that will be equipped with snow plows.
Beckdahl said the passing of an income tax several years ago and a general increase in city income tax revenues over the past two years has allowed the city to fit in several infrastructure projects as well as request for new equipment for 2020.
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The city is expected to generate about $6.9 million from the income tax increase approved by voters and implemented by the city in 2017. An increase in city income taxes has contributed to a jump in general fund revenues, with a majority of that money coming from those taxes.
For example, the city brought in a little over $37 million in revenue in 2010, Beckdahl said.
“Because it makes up so much of the general fund revenue it is sensitive to the economy. Our economy has been strong lately and so we had solid and strong revenues going into the general fund,” he told city commissioners during the public hearing.
General fund revenues for 2020 are expected to be about $1 million more than what is projected for the end of 2019.
Currently the city expects general fund revenues this year to be $46.4 million, with $36.4 million coming from income taxes. Expenditures for this year were expected to be $47.4 million. However, income tax revenues were higher than expected for both October and November.
Beckdahl said expenditures will likely be lower than previous projections this year and the city may actually have a slight budget surplus by the end of 2019.
By the numbers:
$47.5 million: Springfield’s projected revenue in 2020.
$50 million: Springfield’s projected expenditures in 2020.
$37.5 million: Amount of income tax the city is expected to collect in 2020.