The Nevada City Council is expected to hold its public hearing for this coming fiscal year’s budget on March 11 at 6 p.m.
That public hearing has been preceded with a great amount of work preparing a budget that will hold the city tax levy stable for the fifth consecutive year.
“The city of Nevada FY2020 budget will have the same levy rate as last year,” said Matt Mardesen, city administrator, but then added an additional explanation about taxes in total. “As it relates to property taxes, the city of Nevada only is a portion of the property tax totals, so state rollbacks and other entities also factor in determining the total property tax levy for property owners.”
Overall, Mardesen and City Clerk Kerin Wright say they are happy with how this year’s budget process has gone. “The city was able to maintain the same levy rate as the last four years while dealing with the changes in the State of Iowa property tax rollback and the implementation of the Water Excise Tax that took away the 1 cent Local Option Sales Tax on our water sales,” Mardesen said.
Last week, in a City Council budget work session, there was a full presentation and conversation about the fiscal year 2020 budget.
One of the most discussed segments of the budget process by the council members was the Equipment Revolving Plan. There were questions as it relates to leasing equipment and purchasing equipment and which method is best for the city. There was also a discussion about the number of mowers the city owns and is planning to purchase, against the concept of a shared pool between departments.
Even though discussions were had, the council did not propose any changes to the budget during the workshop; but city staff will be clarifying a couple issues before finishing the budget that is presented at the public hearing.
The total FY 2020 budget is $23,924,497. As explained by Mardesen, “FY2020 is down from the re-estimated FY 2019 budget at $27,416,736, but slightly higher than actual FY 2018 at $22,219,022.”
On the revenue side, total FY 2020 revenues are $21,615,704. “FY2020 is down from the re-estimated FY 2019 budget at $27,175,850, but slightly higher than the actual FY 2018 at $20,159,097,” Mardesen said.
“The big differences from year to year are the projects that are planned and the equipment purchases planned,” he explained.
Mardesen and Wright point out that one of the biggest changes in working on the 2020 FY budget was the reduction in the former DuPont valuation. Moving forward, that valuation will decrease tax revenues, they said. Also, the planning and preparation for the huge central business district infrastructure project — the city expects to spend approximately $2,265,000 in FY 2020 — affects the upcoming budget as the city plans for those construction expenses.
Another thing the city has budgeted for in FY 2020 is the proposed rec center to be built at SCORE, north of the aquatic center. The city has budgeted $500,000 in FY 2020; but the project is still dependent on council approval.
As far as the daily operations of the city, however, Mardesen said, “There aren’t a lot of major changes (in the proposed budget).”
One thing that’s always looked at as the city presents its new budget is solvency. Mardesen and Wright give an explanation about why looking at solvency is important.
“Cash solvency is measured by how much cash is in the bank. Currently, the city of Nevada has $23 million in the bank, but not all of these funds are expendable and much of which is, is restricted to its use,” Mardesen said. He continued, “Budgetary solvency is measured by the ability to remain within the confines of your adopted budget and limiting those changes to the budget with amendments that are only for projects and emergency expenditures.”
Long-range solvency, he said, “is about the sustainable factors to increase city revenues through controlled growth within the community.”
Mardesen and Wright offer a couple of factors to consider in being financially stable in the future.
• We need new businesses and construction to add value to the commercial and industrial tax base
• We need to continue review of fees to cover costs (revenues vs. expenditures)
Mardesen likes to present the budget annually as a “team sport.”
“Completing an annual budget is a major task that incorporates the many factors that make up a community,” he said. “The process begins with input from our community and what they would like to see in Nevada. From there, city staff reviews the multiple plans that are developed over time. Examples of these plans include the Vision 2020, City of Nevada Strategic Plans, Comprehensive Plan and the Capital Improvement Plan, to name a few.
“In the review of these plans and the goals of the Nevada City Council, staff begins to involve financial advisors, legal counsel, city engineers, department staff and administrative staff to develop a strategy to accomplish these goals,” he said. “Once we have developed a plan, we review this plan with all of the stakeholders previously mentioned and begin to seek approval from council. Typically, ideas change or issues arise that cause us to re-evaluate the plan before final approval, so these (budgets) can take time to develop and finalize.”
Nevada city staff members have been working on this year’s budget since August.
For residents who would like to review the proposed 2020 FY budget, it is available to see on the City of Nevada website or by stopping in at City Hall to review a copy. The city will also be putting the budget workshop packet link under the other council packet link on the City of Nevada website.