Page Six
N/Warren Town and County News
- Thursday, March 5, 2015
~J
MARKETA OLIVER
Continued from p. 1
Revenues and Expenditures
The City's overall proposed expenditures for FY 16 are $24,285,227 due to the
number of capital projects underway and proposed. The largest projects underway
are the NCIS projects of Holly and Wakonda. These projects are funded with bond
proceeds, the revenues from which are included in the FY 15 year end estimate. The
large capital projects that have been started in FY 15 and those proposed for FY 16
are the reasons you will notice that the FY 16 expenditures are dramatically higher
than both the FY 15 expenditures and the FY 16 revenues of $18,173,651. Some of the
revenues for the FY 16 expenditures have been received in FY 15, contributing to the
difference between revenues and expenditures in FY 16. TIYe remainder of the rev-
enues being used for large purchases or projects in FY 16 are fund balances. Please
note that fund balances are proposed to be used for capital purposes and not opera-
tional purposes.
The following graphs show how the City's funds are proposed to be spent.
In order to pay for the services that the City provides and the capital improve-
ment projects, the City collects property taxes, charges fees for service, applies for
and is fortunate quite often to receive grants and donations, and also receives reim-
bursements. Following is a graph showing the sources of the City's revenues.
General Fund
The City maintains many "funds" within the City budget. The General Fund
supports the bulk of the City's operations and the operations most identified with
the City, such as Police and Fire. The Police, Fire, Parks, Recreation, Library, Build-
ing Inspection, Community Development and Administrative operations are funded
primarily with General Fund and Trust and Agency dollars. Some grants and dona-
tions are also included in the General Fund. Donations and revenue from Parks and
Recreation programs help fund those operations. Other General Fund revenues con-
sist of property taxes, licenses and permits, fines, miscellaneous revenues and charges
for services. Other funds, such as Water, Stormwater, Sewer (Wastewater) and Trust
and Agency (Employee Benefits), are charged an administrative service fee to offset
the support provided by administrative staff. This is reflected in the budget through
transfers. A list explaining the transfers included in the re-estimated FY 15 budget,
the FY 16 proposed budget and the FY 17 projected budget can be found on the City's
website at http://www.norwalk.iowa.gov/YourGovernment/CityFinancialInformation
.aspx. Following is a graph showing how the General Fund is broken down by ex-
penditure category. Total General Fund expenditures, as shown below, including
transfers are $4,589,285. Total General Fund revenues are $4,643,291.
This is the first year in a number of years that the City has had any kind of real
contingency available or the possibility of increasing the general hand reserve level.
This is largely due to the release of TIF valuation for the fiscal year. Council has
given staff direction to work towards less reliance on TIF and the proposed budget
accomplishes that goal. Later in the budget, there is a significant decrease in TIF
revenues and those revenues reflect the release of valuation for this year.
Benefits dollars. Any remaining expenses are augmented with General Fund dollars
or debt service dollars. A great deal of discussion has been underway about the gas
tax, which translates into the Road Use Tax which the City receives. Prior to recent
action taken by the Legislature and Governor, the tax has not been adjusted since
1989. There are many needs, both in Norwalk and statewide for roadway and bridge
improvement. The City is projected to receive $886,775 in RUT revenues from the
State. Combining the RUT from the State with other sources of revenue brings the
total FY 16 RUT fund revenues to $997,475. RUT operating expenditures are
$1,090,965. Following is a graph tracking seven years of RUT revenues, expenses and
eligible expenses. As you can see, the RUT barely covers the cost of routine mainte-
nance of the City's roadways and does not cover the cost of capital improvements.
The recent adjustment in the gas tax is projected to increase the revenues Norwalk
receives by $147,682 however that revenue is not included in the budget figure be-
cause it was not known at the time of budget development.
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The Parks Trust is also a special revenue fund. Last year in the budget message,
the Parks Trust fund (Fund 184 in Department 430) was discussed at length. This is
the fund that receives the revenue from the "Friends of the Park" check off on resi-
dential utility bills. In FY 2014, the City sent confirmation letters to customers ask-
ing them to reaffirm their participation in what was previously known as the "Buck-
a-Month" club and explained the money was used to support special events, like 4th
of July Fireworks and Parks improvements. The number of people reaffirming their
participation to support these events was very low, leading to an 80% drop in antici-
pated revenue, from more than $28,000 annually to approximately $4,800. The City's
contribution for fireworks came directly from this funding source and was approxi-
mately 45% of it. The City previously contributed $12,500 annually for fireworks,
which was approximately 45% of the revenue. Therefore, in the FY 15budget, the
City budgeted $2,400 for fireworks, reflecting the level of contributions. Since that
time, the Mayor has written articles in Norwalk Living and in the newspaper about
the issue and it was discussed on social media. The City now has many more people
contributing to this fund and the revenue projection is now $7,293. At one of the
budget workshops, the Council discussed this issue and directed staff to use all of
the "Friends of the Park" collections in FY 15 to put towards fireworks, in an effort to
provide a year of cushion so that the sponsoring organization would have additional
time to promote funding for the display. The FY 16 proposed budget has been up-
dated to show expenditures of $3,600 towards the fireworks. The fireworks display
in Norwalk is extremely popular and Norwalk is well-known for the display and
staff will continue to publicize the issue and encourage subscription to the "Friends
of the Park" in order to sustain these activities.
TIF Special Revenue Funds
Tax Increment Financing (TIF) expenditures are reported in a separate category
on the State budget documents. The use of TIF dollars is restricted to certain projects
within an urban renewal area or canbe used to repay debt for urban renewal projects.
In FY 16, the City is projected to receive a total of $1,912,609 of revenue into the TIF
fund. Expenses for the same period are $3,809,179. The fund balance is planned to
be used in conjunction with the annual revenue to pay for the expenses. The TIF
fund pays for rebates created through economic development agreements, debt ser-
vice for the certain urban renewal bond issues and capital projects. It is also used to
pay for costs that are directly connected with economic development. Many of the
budgeted projects, such as the completion of Cedar Street, will require an urban
renewal plan amendment. Staff is currently working with legal counsel to prepare
the necessary amendments and proceedings for Council consideration.
Debt Services Fund
The Debt Services Fund is dedicated for the payment of the principal and interest
on the City's long term debt. Revenue for this fund comes from property tax or from
TIF, but can also come from other fund transfers. Following is a graph showing the
long-term, annual debt service expenditures. This graph includes the 2015 NCIS
issue and the 2015B bond, which refunded the 2007A series for savings. The City
currently has a constitution debt limit of $30,037,676 and as of January 20th, has
outstanding obligations attributable to that debt limit of $19,646,093 (including NCIS
issue) of 65.4 percent.
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Special Revenue Funds
Special Revenue Funds contain proceeds from a specific source and are required
by law to be accounted for separately and used for a specific purpose. Examples
include Road Use Tax(RUT) and Employee Benefits (T&A).
Public Works operations are funded primarily with Road Use Tax and Employee
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Continued p. 7
