The budget process is a very important part of municipal government. The attached ordinance reflects a significant commitment of time from the City Council, staff and other interested parties. A municipal budget is an effort in balancing the many wants, desires, and needs of a community. As in any effort to balance needs, some interests will not be met to the same degree as others. As priorities change, these needs will likely move up and down on the priority list. The City used modified budgeting for outcomes approach with an emphasis on historical data for expenditures in department operations. The budget should assist the Council in focusing expenditures towards those activities that support the overall goals of the community.

The following is the result of this year's prioritization. Staff held a public meeting on September 14, 2022, to solicit input on the budget.

Budget Overview:

   Overall

• Sales tax revenue is projected to increase 3.6% over current year estimates, based on the prior 10 year average increases.
• Budget includes an overall increase in compensation of 4% consisting of 2% COLA and a 1-3% pay for performance increase.
• Health care costs are projected to increase by 11.9% in 2023.

General Fund

• $10,000 increase in Construction Use Tax Revenue based on trending.
• $10,000 increase in Electric Franchise Revenue based on trending.
• $10,000 increase in Gas Franchise Revenue based on trending.
• $11,000 increase in STR Fees, new budgeted line item. Per Council direction, funds will be dedicated to implementation of housing plan.
• $10,000 increase in Lease Agreement Revenue based on trending.
• $20,400 decrease in General Government Miscellaneous Revenue based on trending.
• $12,000 increase in Economic Development Revenue based upon actual experience.
• $13,000 decrease in Legal Services expenditures.
• $35,000 increase to Local Alternative Sentencing since the JAG grant was not received for youth and adult diversion in 2023.
• $15,000 increase in Admin-Election due to the regular City election.
• $208,737 increase for Debt Service Golf Course- reminder that in the 2022 budget, staff recommended moving 3 years of the debt ($208,737,$208,737 and $140,743) in 2023, 2024 and 2025 to General Fund to allow for the continued maintenance of the new pay plan and approved CIP.
• $37,102 increase in IT-software.
• $20,000 increase in Gas & Oil Police Operations department.
• $10,000 increase in Canine Services due to retirement of current dog.
• $55,000 decrease in SWAT to return to prior levels. Every five year replacement of SWAT equipment occurred in 2022.
• $10,000 for a new line item in Fire Operations to serve as a match with the Fire District to hire a consultant to review the current structure, funding and future needs of the department.
• $90,000 increase for salaries and benefits to add a co-responder position to Police Support Services. Funded by ARPA grant funds.
• $24,000 increase in Gas & Oil in the Streets Maintenance department based on market prices.
• $20,900 increase in Electrical/Gas Services in the Streets Maintenance department base on Xcel customer rate increase of 11%.
• $11,000 increase in Housing Plan Implementation due to the increases in STR revenue.
• $10,000 increase to Outside Services for contract of levee maintenance in the Parks department.
• $706,768 for equipment, fleet and capital improvements.

Enterprise Fund

• Utility rates were increased per the 2018 ordinance: 5% Water, 8% Sewer and 4% Sanitation.
• $40,000 increase in Recycling Revenue based on trends.
• $500,000 Transfer from debt service to pay for water distribution system.
• $10,000 increase in Water department Electrical/Gas Services due to market costs.
• $13,750 increase in Water department Meter Repair due to cost of meters increasing and more failing.
• $10,000 decrease in anticipated Water Towe Telecommunication Inspection Fees.
• $10,000 increase in each of the Water and Sewer departments Operating Machines & Equipment line items for the expenses of operating crusher equipment.
• $24,600 increase in Sanitation department Gas & Oil due to market costs.
• $12,880 increase in Water Treatment department Electrical & Gas due to market costs.
• $6,420,192 for water, sewer, storm system improvements; and for equipment, fleet and facilities improvements.

Streets Trust Fund

• $500,000 transferred from the General Fund.
• $1,680,000 in anticipated Sales Tax Revenue.
• $2,385,560 for street improvements per resolution.

Conservation Trust Fund

• $20,000 increase in Lottery revenue
• $95,000 for operating equipment and park bathroom improvements.

Employee Benefit Fund

• $50,000 increase in Major Medical Premiums, representing 12% increase from insurance carrier.

Community Recreation Fund

• $423,000 in federal RAISE grant funds for phase 2 of the Pedestrian Bridge project. Remaining $4.3M in grant to be expended in 2024.
• $10,000 increase to Sponsorship and Donation revenue.
• $15,000 increase to Park & Special Events revenue.
• $15,000 increase to Golf Tournament revenue.
• $15,000 increase in Golf Membership revenue.
• $40,000 increase in Golf Merchandise revenue.
• $25,000 increase in Golf Merchandise expense.
• $600,000 for equipment, fleet, facility and capital improvements, including $423,000 for land purchase on the Pedestrian Bridge project from RAISE grant funds.

Other Funds

The City uses a series of various other funds for accounting purposes. These include Fund 12 ACLC Debt Service for the City Complex and Ice Rink/Multipurpose Facility; Fund 31 Debt Service for the Waste Water Treatment plant; Fund 6 for Cemetery improvements; and Fund 4 Capital Improvement reserves, used to set-aside funds for future vehicle and large equipment purchases. The detailed line items are listed in the budget of each applicable department as "Transfers Out". Fund 9 Firemen's Pension Fund is a fiduciary fund. The City reports on the activity, but decisions on the investments are made by an outside agent. These funds are not under the direct control of the City.

Following City Council's last work session regarding the budget, staff made the following changes:

• Added $3,000 to the Art line item as a one-time contribution to the Veterans' Memorial.
• Added $4,000 to Conservation Trust Fund for the installation of bike maintenance stations for Boyd and Zapata Parks.
• Added $1,000 to Non Departmental, Special Projects for the Chaffee Shuttle.
• The Outside Funding line item was update to reflect the following:
  • $5,000 Alamosa Food Bank
  • $2,000 Crisis Prevention
  • $4,000 Alamosa Veteran Services
  • $700 Alamosa Bicycle Coalition
  • $2,000 Veterans Coalition of the SLV
  • $20,000 Boys & Girls Club
  • $17,000 fixed amount + $1,500 one-time extra amount Alamosa Senior Citizens
  • $17,800 South-Central Colorado Seniors

Finally, staff was made aware of the large increase requested by the District Attorney's Office in order to comply with ethical guidelines.  Representatives from the County reached out to staff to see if there was any assistance the City could provide.  As Council knows, the budget is extremely tight and funding the District Attorney's Office is not a normal practice for municipalities.  However, recent experiences have shown just how important a well function DA Office is and the impact it can have on City operations.  In order to help the County with such a large, immediate increase, staff has included $40,000 as a one-time contribution.  It was emphasized that this type of assistance is a one-time situation and not something the City can do again.