“That’s a very minimal increase,” said City Manager Pete Peterson. Most years, he said the city is accustomed to seeing a 1.5% to 3% growth in the general fund. “Revenues are just slow right now, so as a result of that, we’ve worked very diligently to look at our operations and where we can cut cost without diminishing service delivery.”
Ahead of the Johnson City commission’s first vote on the FY 2020 budget, Peterson outlined the specifics of the budget ordinance in a presentation to local media on Thursday morning. The city is planning for a $605,320 increase in general fund revenues next year, bringing total revenues to about $92 million, but the city’s overall budget of roughly $249 million is 0.7% smaller than fiscal year 2019.
The proposed budget would not change the property tax rate for city residents and includes a roughly $6.6 million, or 22%, decrease in capital expenditures.
“When we start having to start to really look at controlling expenses, the first thing we always have to look at is, ‘What capital projects can we change scope on?’ or ‘What capital projects can we delay a couple years?’” Peterson said. “A lot of the reduction this year is those types of decisions.”
Peterson said the city is drawing down its fund balance by about $911,000 to balance the budget his year, which will be used to pay for one-time equipment purchases.
The proposed budget sets aside money for the purchase of a new $500,000 fire truck, $3 million for the implementation of new financial software and about $500,000 to bolster the city’s data security infrastructure. The budget also includes construction design for the improvements along West Walnut Street and money for a 4% increase in the pay scale for city employees.
Peterson said the city consistently has 30 to 40 open positions at any given time.
“What we’ve found in comparing ourselves to the private sector as well as some other local governments is our pay scale is not in the middle,” Peterson said. “It’s more on the low end, and we’re having a real hard time recruiting new employees.”
The budget does not contain extra funding for the Johnson City School System. Peterson said school officials have asked the city for a roughly $1.1 million increase in their appropriation to pay for salary increases. He said the school system’s revenues grew by $1.8 million this year, about three times the revenue growth experienced by the city in its general fund.
“The school revenue growth will allow them to do raises this year,” Peterson said. “They’re going to do raises. They came and asked us for money for raises beyond what they’ve got revenues to do.”
In Johnson City, property tax revenue has increased 41% since 2010, which was bolstered by a 25-cent property tax increase in FY 2016. Sales tax revenue has increased 29.5% in the same time frame.
City commissioners approved the ordinance on the first of three readings Thursday evening.
Commissioners will hold a special called meeting at 9 a.m. June 13 to vote on the second reading of the budget and will vote on the third and final reading during their regular meeting on June 20. The city has to approve the budget by June 30.