2016 Budget Discussion
The City’s audited Fiscal Year 2014-2015 General Fund deficit is approximately $2.3 million. All things being equal, this deficit is budgeted to rise to about $2.8 million in Fiscal Year 2015-2016. Between Fiscal Year 2013-2014 and Fiscal Year 2014-2015 this deficit arose as a result of a loss of both actual and anticipated revenues and additional expenses.
Between Fiscal Year 2013-2014 and Fiscal Year 2014-2015, revenues dropped about $1 million. This was due substantially to the loss of fine and court fee revenues. During this same period, expenses increased about $900,000, as a result of civil unrest from both direct and labor [overtime] related costs. The balance is principally additional personnel related costs for which planned revenues did not materialize.
Taxes may be increased only by a vote of the people. General Fund revenues are derived from the following sources:
- 35% - Sales taxes. The City levies five of the six available sales taxes.
- 23% - Utility gross receipts taxes. These taxes are paid on utilities bills – gas, electric, water, telecommunications and cable. Tax rates are currently set at 6%, with the exception of the cable television tax, which is levied at 5%.
- 13% - Property Taxes. Taxes on real and personal property are at the statutory limit of $0.80.
- 10% - Licenses, permit, fees, service charges and assessments. These are mostly business and rental licenses, occupancy fees and building related permits.
- 9% - Intergovernmental taxes. These are state and county taxes shared on a per capita basis.
- 9% - Fines and public safety. These are mostly municipal court fines and costs.
- 1% - Miscellaneous revenues.
The City's General Fund expenditures increased from $12.7 million in fiscal year 2013-14 to $14.5 million as reflected in the City's Fiscal Year 2015-16 budget. The increase is comprised primarily of personnel-related costs, such as salary and healthcare costs, and expenditures related to civil unrest and ongoing negotiations with the Department of Justice. About 75% of the City's expenditures are employee related costs like salaries, health care and workers’ compensation insurance and pension costs. The balance of expenditures are for operational supplies and services.
The City is currently considering a number of significant budget adjustment alternatives. They fall into three broad categories: (1) employee related adjustments, (2) operations related adjustments and (3) tax related adjustments. A detailed list of these items may be found here http://www.fergusoncity.com/DocumentCenter/View/1913.
On December 12, 2015, a Town Hall meeting was held related to budget adjustments. An outline of that discussion may be found here http://www.fergusoncity.com/DocumentCenter/View/1914.
A listing of Neighboring Communities Property Tax Rates can be found here http://www.fergusoncity.com/DocumentCenter/View/1915
A listing of comparative sales tax rates of neighboring communities may be found here
Click here to read a memorandum from the City Manager outlining four different scenarios for addressing the a $2.8 million structural deficiency in the City’s General Fund.