Johnson City’s balanced fiscal 2013 budget is no longer in “proposed ordinance” status, thanks to two consecutive early morning meetings at which the City Commission approved a more than $209 million spending plan on the final day of the prior fiscal year.
Commissioners met at 7 a.m. in special called meetings Thursday and Friday in a move similar to last year at this time to put an end to what is known as “budget season” — a process that traditionally begins in December of the previous year and ends when commissioners put the final stamp on the financial plan.
On both days, the vote was 4-0 with Mayor Jeff Banyas absent.
Assistant City Manager Bob Wilson, who has worked with city staff for months to compile the budget, said they have had to work hard to meet the state’s July 1 deadline.
“That’s why we’ve been hustling so hard,” he said.
The 2013 budget is about a $7.8 million decrease compared to the recently concluded 2012 fiscal year, or a 3.6 percent reduction. The “city portion” of the budget — excluding Johnson City Schools’ roughly $72 million budget — comes to just over $137 million, a decrease of $7.7 million, or 5.3 percent, from the prior year.
The drop comes primarily from the completion of capital projects. With the vast majority of spending for the new $15 million Memorial Park Community Center and school construction beginning to slide out of the financial picture, one line item about to have a big drop is capital expenditures. That is expected to fall by half — from about $8 million to more than $3.6 million.
Still, several big projects are in the works. Three will cost $1 million or more, including remaining work at the community center, Freedom Hall improvements, the Indian Trail Intermediate School addition and Johnson City Juvenile Court’s move to the renovated Seniors Center.
Funds for projects paid for out of the general fund are divided into for separate funds: equipment, facilities, school facilities and infrastructure.
“This has been a challenging budget with the economy being what it is,” said City Manager Pete Peterson. “This budget includes the utilization of about $3 million of our fund balance. Having said that, we’re still providing all services and keeping up with needed capital improvements. We’re trying to position Johnson City for growth over the next 20 years.”
Major items include the new Memorial Park Community Center’s Phase III as well as other work in and around the new center. Infrastructure projects total about $6.2 million and include the redesign of the Indian Ridge Road/State of Franklin Road intersection, construction of the “intelligent transportation system” and right-of-way acquisition for a new access road to the VA.
The city also plans to purchase an additional 100-foot aerial platform truck. This $860,000 acquisition is funded mainly ($600,000) by a federal grant.
When asked why commissioners were finalizing the budget at such a late date, Peterson said it was not due to any gaffes or snags. Instead, the manner in which the budget was passed actually helped commissioners by presenting them with an ordinance that had gone through months of scrutiny and was in final form.
“The first reading has to be at a regularly scheduled meeting, and there must be a public hearing,” he said. “In an election year (2011 city election), commissioners are not seated until we’re nearing the end of the process. They’ve not had enough time to look things over.
“We have to present a proposed budget to the commission by the first Tuesday in May. That gives us enough time to where the budget office and myself have had an opportunity to get on the same page.”
He said the city conducted between six and 10 budget workshops at which department heads, who already have spent months getting their budgets ready, come in and spend time with commissioners and city staff to sort things out. Some will spend hours meeting with commissioners; others need only 10 minutes, Peterson added.
“So when we come in here for a first reading, it’s pretty well fine tuned,” he said. “We start in December and departments work on their budgets in January, February and March and we usually meet with them beginning in April. By that time, we’ve really run a fine-tooth comb through it.”
The budget ordinance does not include a property tax rate increase. The rates for the Washington, Carter and Sullivan County portions of Johnson City are unchanged at $1.57, $1.62 and $1.72 per $100 of assessed value, respectively.
Wilson said the city has experienced positive sales tax collections for the past 19 months, averaging a monthly increase of 5.2 percent in Washington County. This accounts for more than 99 percent of all local sales tax collections.
“This sustained rate is reflective of the economic turnaround that has been eagerly anticipated,” Wilson said. “However, this positive news could be impacted by fluctuating fuel prices during the upcoming year.”
Property tax accounts for 38 percent of the city’s general fund revenues, followed by sales tax at 25 percent.
Though property tax rates will not change, increases are in store for water/sewer rates and golf fees.
A four-year rate increase was proposed for water/sewer, with the first year increase averaging 7.5 percent between water and sewer rates. Green and cart fees will go up by $1 each. Other golf increases include the annual user fee for non-city residents by $25 and the annual private golf cart usage and storage fees by 10 percent.
During the 2012 fiscal year, the total expense for special allocations, including agencies and nonprofits, was $511,000. That will decrease to about $413,000, mainly due to the one-time $50,000 allocation to help complete construction of the Johnson City/ Washington County Veterans Memorial.
A total of 903 full- and parttime positions are budgeted, an increase of six employees. Money is budgeted for merit/cost-ofliving raises, but a specific breakdown on how any increases will be divided has not been determined, Wilson said. Merit increases are based on job performance and the results of the employee’s annual evaluation.