Meeting Summary
The city council held a study session to review the proposed FYE 2025 city budget, focusing on the general fund and special revenue funds. The presentation covered financial policies, revenue projections, expenditure assumptions, and the financial health of various city departments and enterprise funds. The budget approach for the coming year was characterized as "Steady As She Goes," with projected sales tax growth and updates on the successful operations of the Young Family Athletic Center.
Financial Matters
FYE 2025 City Budget Overview
Introduction of the city manager's proposed budget for FYE 2025, outlining its function as a financial plan, policy document, and operations guide for the city.
General Fund Budget
Discussion of the general fund, which is the largest single fund, with sales and use tax as its primary revenue source and Public Safety (Police and Fire) and Public Works as the largest expenditure areas.
Sales and Use Tax Projections
Sales tax is projected to grow at approximately 2% and use tax at 4% for FYE 2025, influenced by factors such as inflation and the 'SEC effect' on local commerce.
Personnel Costs and Projections
Salary and benefits are projected at full cost for the fiscal year, including a 4% merit increase for eligible employees. No cost of living adjustment (COLA) was projected for the Fraternal Order of Police (FOP) union. A turnover savings assumption of $800,000 was included.
General Fund Subsidies
The general fund is projected to subsidize the Public Safety Sales Tax (PSST) fund by approximately $225,000 in FY25, primarily due to the four additional School Resource Officers (SROs). A subsidy is also projected for the Westwood fund. No subsidy is projected for the Public Transit Fund.
Westwood Golf Course and Swimming Pool Fee Adjustments
An update was provided on approved fee increases for the Westwood Golf Course ($3 for green fees, $1 for golf carts) and the Swimming Pool ($2 for adult entry, 20% for season passes), effective July 1st, to address deficits.
Room Tax Fund Projections
Room tax revenues are projected to grow by approximately 8% for FYE 2025, driven by anticipated increases in hotel rates and occupancy due to the 'SEC effect' and a higher number of home football games.
Public Transit Funding
The Public Transit fund is currently self-supporting, funded by federal grants and a local voter-approved sales tax, with no general fund subsidy projected for the coming fiscal year.
State Grocery Tax Repeal Impact
Discussion on the potential negative impact of the state's grocery tax repeal (effective November 1st) on city sales tax revenue, particularly from smaller retailers who may struggle to differentiate between state and local tax rates at the point of sale.
Coming Up
Deadlines
- Budget adoption by midnight of the last day of June (June 30th)
- Budget adoption must be seven days before the start of the fiscal year
Watch For
- Public budget hearing on April 23rd
- Second study session on May 7th (Capital Budget documents)
- Third study session on May 21st (Enterprise Funds)
- Second public budget hearing on May 28th
- Council consideration for budget adoption on June 11th
- Optional study session on June 4th to discuss budget amendments
- Reconstruction of Fire Station 5 (projected after 2027, once debt on the Emergency Communications and Operations Center and radio system is paid off)
- New hotels coming online in summer (Conference Center Drive, University North Park, Lindsay Street)
- Impact of the state's grocery tax repeal on city sales tax revenue (effective November 1st)
- Development of metrics and a user-friendly dashboard to evaluate the economic impact of the Young Family Athletic Center
- Potential federal legislation to close the Wayfair loophole for use tax collection
Announcements
- Kim Kaufman, budget manager, was recognized for her significant work in preparing the FYE 2025 budget.
- The Young Family Athletic Center (WFAC) has been highly successful since opening, hosting major tournaments (Puma, Texas basketball circuit, Mood Hoops/Nike, Adidas live period tournament) and attracting college coaches, which is contributing to increased hotel occupancy and local spending.
- The Emergency Operations Center is nearing completion, with dispatchers expected to move into the facility by July 18th.
Agenda Summary
Discussion regarding the proposed FYE 2025 city of Norman budget general fund discussion and special Revenue funds
Presentation and review of the city manager's proposed budget for the upcoming fiscal year, covering financial policies, revenue sources, expenditures, and fund balances for the general fund and special revenue funds.