Municipal services and programs will remain at current levels with no increases in real estate, meals and lodging tax rates as calculated in a proposed budget that Interim City Manager Ken Larking submitted to City Council on Tuesday night.
The proposed budget includes a utility rate study recommendation for an increase in electric rates. The bill for the typical residential customer would increase by $2.43 a month. Gas, water and wastewater rates will remain unchanged.
The proposed budget is a working draft for the next fiscal year, which begins July 1.
City Council will meet every Tuesday evening this month for a department-by-department review of the proposed budget. Changes are likely. The meetings are open to the public. The first meeting will be held Tuesday, March 8, at 6 p.m. in the fourth floor conference room at the Municipal Building.
Public hearings will be scheduled later in the budget process. Final adoption must take place no later than June 30. The final budget will serve as a blueprint for city operations from July 1, 2015, through June 30, 2016.
Under the proposed budget that City Council will review, basic city services, programs and facilities are continued at adequate funding levels. The cost to sustain those levels will increase by $1.3 million or 1.3 percent.
To offset the increase, the city expects more revenue from local sales, prepared meals and lodging taxes. In addition, business and occupational license revenue is expected to grow.
Use of cash reserves are proposed for one-time expenditures such as economic development incentives and capital improvements.
Larking said the City’s financial condition is excellent in terms of maintenance of appropriate cash reserves, levels of indebtedness and retirement system funding.
No increase is included in the transfer of utility funds for general operations.
The proposed budget includes $1 million for an increase in employee salaries and wages. That amount would allow for an average increase of 2 percent, but the percentage will vary from employee to employee because of the City’s pay-for-performance system. Under this system, which is entering its third year, each employee undergoes a performance evaluation. Salary and wage increases are based on the evaluation.
The total number of City employees will remain the same. The proposed budget includes two new positions in Adult Detention and one new position in Community Development, but it eliminates three solid waste collectors due to efficiencies achieved with the Public Works Department’s use of automated trucks.
The proposed budget provides $1.4 million for the next installment payments to the Tobacco Commission for non-performing grants.
Economic economic development incentives are reduced by $1.4 million; however,
Larking said staff might ask City Council for a special appropriation should new prospects express an interest in locating in Danville during the next budget year.
Support of Danville Public Schools operations would remain flat at $17.4 million
The proposed budget totals $271.8 million for all operations, capital expenses and debt service requirements. The total is an increase of nearly $9.9 million or 3.77 percent from the adopted budget that took effect last July. Of the increase, $9.5 million is due to an increase in the cost of purchasing power for utility customers.