March 28, 2023 City Council Meeting

Christy Cluck presented the proposed FY24 budget of $153.4 million in revenue and $133.8 million in expenditures, detailing revenue sources, expenditure categories, and emergency reserve balances. Discussion ensued regarding the apparent surplus and the declining available fund balance.

Melissa Reams discussed the challenges facing the city, including inflation and staffing issues, and outlined potential strategies for increasing revenue through sales tax, ad valorem tax, utility rates, service fees, grants, leases, donations, and private partnerships. She also highlighted priority projects and the need for policy frameworks.

The council adopted Ordinance 3521, which amends the 2022 Stillwater reinvestment plan for the downtown campus link project. This amendment clarifies capital payment obligations to Stillwater Public Schools and allocates a portion of increment generated by District number five to affected taxing jurisdictions.

A motion to declare an emergency related to Ordinance 3521 was approved, allowing the ordinance to take effect immediately.

Fiscal Year 2024 Proposed Operating Budget

Proposed budget of $153.4 million in revenue and $133.8 million in expenditures, with a focus on sales and use tax, electric, water, and wastewater revenues. Challenges include a $3 million increase in health insurance claims and a $4 million increase in wholesale purchase power costs.

Health Insurance Expenditures

A $3 million increase in health insurance expenditures is projected for FY24, following a $2 million increase in FY23.

Public Safety Radio System Lease Payment

Year two lease payment for the public safety radio system.

General Obligation Bond Payment (Fire Station)

Year one general obligation bond payment for the new fire station.

Fire Truck Lease Payment

Year one lease payment for two new fire trucks.

Available Fund Balance

Discussion on the declining available fund balance, which has been used to balance budgets and fund one-time capital needs. Concerns were raised about its sustainability for future budgets.

Credit Rating Concerns

S&P affirmed the city's AA- credit rating but with a negative outlook, citing concerns over the fixed charge coverage ratio, high purchase power costs, winter storm Yuri costs, high transfers from SUA to the general fund, and lack of base rate increases for utilities.

SUA Transfers to General Fund

Analysis of historical transfers from the Stillwater Utilities Authority (SUA) to the city's general fund, noting an upward trend and volatility, which are concerns for credit rating agencies.

General Orders: Presentation of the Fiscal Year 24 Operating Budget

Presentation and discussion of the proposed operating budget for fiscal year 2024, including revenue and expenditure projections, and challenges faced by the city.

General Orders: Presentation regarding the necessity for increased revenues, utility rates, and other fees

Discussion on the current financial environment, pressures, and potential strategies for increasing city revenues and addressing financial challenges.

Ordinance Number 3521: Amending Ordinance Number 3494 approving a minor amendment to the 2022 amended Stillwater reinvestment plan

Second reading of an ordinance to amend the Stillwater reinvestment plan, specifically regarding the downtown campus link project plan, clarifying capital payment obligations and budget allocations.

Emergency Clause for Ordinance Number 3521

Motion to declare an emergency for Ordinance Number 3521.