Orem’s city council unanimously approved a strong budget for fiscal year 2022 at its regular meeting on Tuesday.
The unanimous vote included a caveat. City Councilor David Spencer was not happy with the fees in the budget for sports groups that are not sponsored by the city. He would like to see these lowered and hopes that will be fixed in the near future.
The budget is approximately $ 131,138,860. The money is spent on personnel, operations and capital projects.
“The budget is the financial plan for the 2021-2022 fiscal year (July 1, 2021 to June 30, 2022). It represents the financial direction needed to prudently implement the goals and plans of the mayor and city council, ”Jamie Davidson said in a cover letter to the budget documents. “The budget is built with a conservative mindset of underestimating income and overestimating expenses. All income and expenditure are monitored throughout the year by management and administrative controls.
Safeguards have been developed to monitor, authorize and analyze spending. These processes and guarantees allow staff to change the budget quickly, allowing the city to react to any unforeseen changes or changes due to economic circumstances as they become known.
Despite COVID-19, Orem has seen significant growth in sales tax revenue, according to Brandon Nelson, the city’s chief financial officer.
“The earnings continue to be good,” Nelson said.
Year-over-year comparisons show that Orem saw a 14% increase in sales tax revenue from May 2020 to May 2021.
“A sustainable budget provides for sufficient operations, human resources and capital investments to meet the service delivery needs and expectations of Orem citizens,” Davidson said. “This effort requires a stable blended revenue stream that can withstand inevitable fluctuations in the economy without causing dramatic shifts in service levels.”
“Despite the negative effects of the COVID-19 pandemic on the nation as a whole, the local economy has rebounded well and continued to perform well,” Davidson added.
As the city expects sales tax revenue, building revenue and other revenue to increase, some sources of revenue, such as court fees and fines as well as interest income, are expected to be negatively affected. by the pandemic.
Various service charge increases are being requested to bring a number of services in line with their delivery costs, Davidson noted.
“Construction costs have been reduced to their normal base amount of $ 815,000 (they have been reduced to $ 400,000 for the 2020-2021 budget) because they appear to be doing well despite the pandemic,” he said. Davidson said. “They are normally underestimated in the general fund, as these fees represent one-time income and, in accordance with city budget guidelines, have excess income over the base budget amount used to fund improvement-type projects. fixed assets during the following financial year. . “
The good news for the city is that some fees are going down, which Mayor Richard Brunst says is unheard of this year for other cities.
Basic water and sewer tariffs will not be increased and tariffs for multi-tiered water use will in fact be reduced in this fiscal year as the city has issued bonds to pay for large projects. multigenerational rather than continuing to depend solely on cash funding from the latter. projects.
“The city is nearing completion of the process of updating master plans to meet the needs of these utility systems for years to come,” Davidson said. “The Rainwater Equivalent Service Unit (ESU) charge is to be increased to $ 7.60 per ESU per month, from $ 7.35 per ESU per month currently.
“Finally, residential solid waste (garbage) rates need to be increased in line with increases in service costs from the city’s private solid waste carrier, Waste Management, Inc., as well as a higher standard of treatment for waste. recycled materials. The increases are as follows:
First box – $ 11.85 per month increases to $ 12.15 per month.
Second box – $ 10.85 per month to $ 11.15 per month.
Recycling – $ 3.90 per month up to $ 4.15 per month.
Green waste – $ 6.40 per month up to $ 6.60 per month.
First combined container and recycling container (required for new accounts) – $ 15.75 per month up to $ 16.30 per month.
To keep the city’s compensation program aligned with the market, a compensation study is currently underway and an amount has been set aside to account for any potential adjustments that need to be made, Davidson said.
In addition, 3% of compensation has been budgeted for merit / performance based increases and public safety step program increases for all beneficiary employees.
The costs of health insurance and other benefits also continue to rise. The city has forecast an 8% increase in health insurance costs for the coming year.