Last Tuesday the Moab City Council voted to approve the city’s annual budget for fiscal year 2013-14. Though the budget is in many ways very similar to those of previous years, there were several unforeseen issues that arose during the last year that will affect the city’s spending in the coming fiscal year.
“It was a challenge this year,” said city councilman Doug McElhaney. “Our biggest challenge this year has been the health care costs for city employees.”
In addition to the increased cost of insurance, the city has had to adjust this year’s budget in light of the unexpected costs in repairing frozen pipes over the winter.
The new budget also sees dramatic cuts for the Moab City Teen Center: Club Red’s hours and the elimination of the city’s Personal Responsibility Education Program (PREP).
However, a number of capital improvement projects are planned.
Sewer fees will be increased by 5-percent and residents will see their solid waste fees increase by 6-percent in the coming fiscal year.
This budget, like those in past years, began with the Moab City Council meeting in February for their “visioning workshop” to decide on what they would like to see happen in the city for the coming fiscal year. The goals set at that meeting were then communicated to the heads of the city’s various departments.
“Based on that information the departments submit their budgets on March 1st of each year,” said city manager Donna Metzler, the person responsible for drawing up the budget.
Two weeks after Metzler receives this information, and meets with the head of each department, she presents a balanced administrative budget to the city council, who then hold several workshops to go over the draft.
“Based on all those workshops, and the inputs, the city sends a tentative budget to public hearing,” Metzler said.
The public comment is taken into consideration and the budget is passed.
The goal of the multi-step process, Metzler said, is to ensure that there is as little divergence as possible between the city council’s vision and that of the city’s various departments.
Unlike every other city in Utah, the money that funds the City of Moab’s programs throughout the year comes from sales tax rather than property tax.
“We are the only city in Utah where the bulk of our budget is funded by sales tax,” said city councilman Gregg Stucki. “The city doesn’t have a property tax.”
Moab’s property tax was abolished in the early 1990s when “the city council, seeing the influx of tourism, wanted to make sure that the tax burden of city services wasn’t falling primarily on local residents,” Metzler said.
Last year this meant that roughly 85-percent of the tax dollars that the City of Moab collected came from tourists, according to numbers published by the City of Moab. This is an approximation because the city cannot differentiate between resident and visitor sales tax. However, with over two million visitors a year, the council assumes that the lion’s share of the sales tax is paid by visitors.
The city has also managed to almost entirely avoid debt, Metzler said.
However, some of the city’s programs rely on state and federal funding. This year two grants which funded both the Moab City Teen Center: Club Red and Moab’s PREP program were not renewed. One was a Safe Passages Grant for $30,000 and the other was a PREP grant for $55,000.
This will drop the Teen Center’s annual budget from $49,000 last year to $14,000 in the coming year.
“The Teen Center’s hours will be reduced significantly,” Metzler said. “All of the expenses of the Teen Center will be paid for by local contributions.”
The PREP program will be eliminated.
Cuts also had to be made to city employee’s cost of living adjustments. This is because despite a 4.8-percent growth in sales tax revenue in the last year, there has been a 9-percent increase in the cost of insurance for the city’s workers.
“All of our employees will get a 1-percent cost of living adjustment, and beyond that classified employees are eligible for merit based increases,” Metzler said. “Those are generally around 3-percent.”
The increasing cost of insurance has been a problem for several years, Stucki said.
“The last few years one of the big factors the city has had to deal with is the increase in insurance,” he said. “It’s been staggering at times.”
Due to the financial struggles of the Canyonlands Health Care Service District, the city council elected to give the service district $82,000 that was earmarked for the new University of Utah extension campus. The money will be used to help cover the local component of a grant for Moab Regional Hospital to receive reimbursement for charity care. The city hopes to resume putting aside money annually for the new campus in the coming fiscal year.
The cost of repairing the water and sewer pipes that froze on 400 East last winter is another issue that has affected this year’s budget. The money used for the repairs was originally designated to build a storage building for the city’s sewer vacuum truck. That money will now have to come from this year’s budget.
The increase in sewer and water fees will continue over the next few years in order to pay for the incremental replacement of the city’s water and sewage infrastructure, most of which is 50 to 60 years old.
Moab’s capital improvement projects in the coming year include chip seal and crack repair, the completion of Rotary Park, improvements to the Lions Parks Trail Hub, an upgrade to Power House Lane, improvements to 400 East, and the construction of the North Area Water and Sewer Line, which will run to Lions Park.
Though the City of Moab faced several financial challenges in organizing this year’s budget, Stucki and Metzler do not believe that these have been anything out of the ordinary. They are confident that Moab’s fiscal house remains in order.
“The city is in great shape financially because we have some good people handling things,” Stucki said.