Utility rate increases driven by rising service costs and an increase in the property tax millage that’s smaller than it first appears are a major part of the City of Union’s proposed municipal budget for fiscal 2012-2013.
Union City Council voted unanimously Tuesday to approve first reading of the 2012-2013 budget ordinance. The proposed budget project expenditures and revenues totaling $41,771,510. This is two percent or $691,350 less than the $42,462,860 budgeted for the current fiscal year. The decrease is due to a decrease in the Utility Fund portion of the budget which went from $35,265,840 in the current fiscal year to $34,012,670 in the proposed budget for fiscal 2012-2013, a decrease of $1,253,170 or four percent. The decrease in the utility fund is attributed to the decline in the price of natural gas.
The proposed utility fund budget includes a five percent increase in the base rate the city charges its customers because even though the price of natural gas itself has fallen, the cost of providing that service has continued to increase. For the city’s average residential customer this means an increase of $1.50 a month.
Electric, water and sewer rates will also increase under the proposed budget. The five percent increase in the base rate for electricity is due to projections that show the wholesale cost of power will increase in fiscal 2012-2013. The increase in the base rate means the city’s average residential customer will pay an additional $4.74 a month.
The base rates for water and sewer will each increase by 9 percent. The increase is being driving by a combination of increased costs due to state and federal environmental mandates and the decrease in the city’s industrial customer base. The average residential water customer living within the city will pay an additional 96 cents a month while those living outside the city will pay an additional $1.44 a month. For sewer service, the average residential customer living in the city will pay an additional $1.16 a month while those living outside the city will pay an additional $1.72.
The proposed utility fund budget also includes $3,482,000 for utility infrastructure improvements and $145,000 for equipment replacement.
Property Tax Increase
Council also voted unanimously Tuesday to approve first reading of the ordinance setting the 2012-2013 municipal tax levy at 80 mills, up 5.7 mills from the current levy of 74.3 mills.
Even though the budget increases the municipal tax levy by 5.7 mills, the new fiscal year will also see the elimination of 5.6 mills levied during the current fiscal year to cover a loss of revenue the city experienced in 2010-2011. The net result of this exchange of millage will be a .1 mill tax increase for municipal property owners. On a $100,000 home this will amount to 40 cents.
The General Fund portion — which gets the majority of its revenue from the municipal property tax millage — of the proposed budget totals $5,566,600, an increase of six percent or $326,840 over the current total of $5,239,760. The increase is due mainly to the proposed allocation of $220,000 for equipment replacement for the Union Public Safety Department and other municipal departments.
Under the proposed budget, the public safety department would receive five patrol vehicles ($150,000); the Street Department would receive a pickup truck, sand spreader, and brine tank ($40,000); while the Legislative Department would receive a digital recording system ($7,500).
While the General Fund includes a tax increase and the Utility Fund rate increases, the fee charged by the city for residential garbage collection will remain the same.
The proposed Solid Waste budget projects $899,370 in expenditures, a 23 percent increase or $166,890 more than the current budget of $732,390. Most of the increase is due to a proposed allocation of $163,000 for equipment replacement.
Despite the increase in expenditures, the fee the city charges residential customers for garbage collection will remain the same at $14 a month.
Cost Of Living Increase
With the exception of the mayor and the members of city council, all city employees will receive a 3 percent cost of living increase in the new fiscal year.The proposed budget also includes a 3 percent cost of living increase for city employees which is projected to cost $200,000.
The 126 municipal employees who will receive the cost of living increase include 40 in the public safety department, 45 in the utility department, five in the solid waste department, and six in the street department. The other 20 employees are employed in the administrative, legislative, and planning departments and Channel 14.
First reading of the proposed budget is scheduled for May 15 at 6:30 p.m. The meeting will be preceded by a public hearing at 6 p.m. State statute requires municipalities hold two readings and a public hearing on a budget ordinance before it can become law