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March 21, 2019 Budget Session Summary

CITY OF BUCHANAN BUDGET WORK SESSION
CITY COMMISSION SUMMARY
March 21, 2019

A Fiscal Year (FY) 2019-2020 budget work session of the Buchanan City Commission was held at City Hall, 302 N. Redbud Trail, Buchanan, Michigan, Thursday, March 21, 2019, at 6:00 p.m.

Commissioners Present: Patricia Moore, Dale Toerne, Mark Weedon, Sean Denison, Cameron Downey (6:07 P.M.)
Commissioners Absent: None    
Staff Present:           City Manager Bill Marx, City Treasurer Juli O’Bryant, City Clerk Brenda Hess
                
2019-2020 BUDGET
GENERAL FUND - Budget Books were distributed to the Commissioners on Wednesday, March 13, 2019.  
Juli stated Page 16, General Fund Budget Comparison FY 2018-19 VS FY 2019-20 (snapshot of Budget), decreased General Fund by 14% (from the 18-19 Amended Budget) with a $5,729 projected surplus. Capital Outlay Expenditure Requests from the Police, Cemetery, Fire, and DPW Departments were explained by Bill and Juli. Discussion was shared. It was noted that this will be the last year of a five-year increase of .50 tax mills for the Fire Department. Discussion was shared about continuing .50 tax mills in future years to help support a new DPW building. General discussion in regard to medical marijuana revenues was shared. Salary expenses were discussed.

MAJOR STREETS – The budget of $461,763 in this fund covers 11.72 miles of streets in Buchanan designated as being major.  Act 51 subsidizes major streets, local streets, and street repair and maintenance. 57% is designated for salaries and administrative costs, 41% is for supplies, and 1% is for sidewalks and 1% for utilities. Street Maintenance and Resurfacing budget projects $98,452 in available funds to perform some street repair work. General discussion focused on condition of major streets and lack of revenue sharing from the state.

LOCAL STREETS – The budget of $306,962 in this fund covers 16.09 miles of streets in Buchanan designated as being local. 84% is designated for salaries and administrative costs, 14% is for supplies, and 2% is for sidewalks. General discussion covered the differences between major and local streets, as well as the general condition of streets in Buchanan.

STREET REPAIR & MAINTENANCE- Four mills are designated to this fund per vote of electors in 1989. Tax revenue expected to be generated from 4 mills is $345,722. General maintenance practices were discussed. $69,951 in contractual can be used for future road repairs. 

BROWNFIELD TIF - The Brownfield Tax Increment Finance (TIF) budget comparison was discussed; River, Smith, and Third Street Brownfields capture $18,094 in taxes which is reserved in this fund. We have a total of 17 brownfields. General discussion of previous uses of brownfield funds was shared.

WATER AND SEWER - Juli distributed two budget scenarios, each including a Projected RTS & Water/Sewer Revenue – Effective July 2019, Long Term Debt Summary, Water & Sewer Rate History and Residential Utility Billing Rate Increase Comparison.  Juli explained that the future Oxidation Ditch Bonding terms (20 year versus 25 year) that the Commission will approve at a later date will determine which user rate schedule and budget the Commission will approve. Discussion was shared regarding the cost savings for our users to move forward with the 20-year bond, saving $1,317,400 in interest over the 25-year bond. All shared discussion for the future wastewater treatment plant and the SAW Grant’s Rate Study and which bond option to approve which will determine the user rate fee schedule. Capital Outlay expenses for this fiscal year include equipment needs in the amount of $18,000 in Wastewater and $28,000 in the Water Department. 

Commissioners’ specific questions were answered throughout the work session.  

There being no other discussion, the session adjourned at 8:14 p.m.

Brenda J. Hess, City Clerk
 

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