Some property owners in the City of Union will pay 40 cents more a year in property taxes while some utility customers could pay an additional $8.84 a month for their water, sewer, natural gas and electricity in fiscal 2012-2013.
Union City Council voted unanimously Tuesday morning to approve second and final reading of the 2012-2013 budget ordinance and second and final reading of the 2012-2013 municipal tax levy. The tax levy generates revenue for the General Fund portion of the budget which covers the operations of municipal government such as public safety and street maintenance. The General Fund is projected to increase from $5,239,760 in the current fiscal year to $5,566,600 in the new fiscal year which begins July 1, an increase of six percent or $326,840. 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.
The tax levy ordinance approved by council increases the municipal tax levy from 74.3 mills to 80 mills. The increase, however, is almost completely offset by 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 leaves a net tax increase of .1 mill or an additional 40 cents a year paid by the owner of a $100,000 home within the municipal limits of the city.
The General Fund includes $150,000 for five patrol vehicles for the Public Safety Department; $40,000 for a pickup truck, sand spreader, and brine tank for the Street Department; and $7,500 for a digital recording system for the Legislative Department.
The new budget, which is balanced as required by law, projects expenditures and revenues totaling $41,771,510, a decrease of two percent or $691,350 less than the $42,462,860 budgeted for the current fiscal year. The decrease in the total budget is due to a decrease in its largest component, the Utility Fund which covers the operations of the City of Utility Department. The Utility Fund portion of the budget for fiscal 2012-2013 is $34,012,670, a decrease of four percent or $1,253,170 from the $35,265,840 budgeted for the current fiscal year.
The decrease in the Utility Fund is attributed by city officials to a decrease in the price of natural gas, but while the price of natural gas has fallen, the cost the delivering it to the consumer has continued to increase. To deal with the increased cost of service delivery, the new budget include a five percent increase in the base rate the city charges it customers for natural gas. The increase means the city’s average residential customers will pay an additional $1.50 a month for natural gas service.
In addition to natural gas, the utility department also provides electricity, water and sewer services and the base rates for these will also increase in the coming fiscal year. For electricity, there will be a five percent increase in the base rate due to projections that show the wholesale cost of power will increase in fiscal 2012-2013. The increase in the base rate means the average residential customer will pay an additional $4.74 a month for power.
The combination of increased cost due to state and environmental mandates and the decrease in the city’s industrial customer base is behind a 9 percent increase each in the base rates for water and sewer. 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 Utility Fund includes $3,482,000 for utility infrastructure improvements and $145,000 for equipment replacement.
Solid Waste Fund
The third component of the budget is the Solid Waste Fund which covers municipal garbage collection.
For fiscal 2012-2013, the Solid Waste Fund 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 the 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
The other major feature of the new budget is a 3 percent cost of living increase for all city employees except the mayor and members of city council. The increased 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.
In other business, council voted unanimously to authorize Mayor Harold Thompson to enter into a contractual agreement with Terry Fant, CPA for auditing services for the next three years. Under the proposed agreement, the city will pay Fant $30,400, $31,500, and $31,650 is fiscal 2012, 2013, and 2014, respectively, for auditing services.
State law requires that all municipalities have an annual audit of all financial records and transactions by an independent auditor. Fant has been providing this service to the city for more than 20 years.