The city is proposing a 2022-23 municipal budget that is 3 percent smaller than the current 2021-22 budget, owing mostly to lower expected property-related tax revenue.
While the city’s heavy reliance on property tax related revenue has largely been (and remains) a godsend in keeping the city’s financial position stable, city officials said Monday night that the high rate of inflation, should it continue, could adversely affect house sales — and thus the city’s budget – in the next few years.
The 2022-23 budget is based on a projection of General Fund revenues of $33,953,000. That compares with $34,912,000 projected for the current 2021-22 fiscal year, and represents a 3 percent drop.
The city is budgeting $33,864,402 in General Fund expenditures, an increase of 7 percent from 2021-22 expenditure levels,
In Piedmont in 2021-22, property-related taxes — property tax revenues, real property transfer taxes, parcel tax revenue and property tax in lieu of Motor Vehicle License Fees — accounted for 72 percent of the General Fund budget. The city is expected to take in $24,986,000 in such taxes this 2021-22 fiscal year; that income is expected to drop to $24,247,000 in 2022-2023 (a 3 percent drop), and make up 71 percent of the General Fund budget this upcoming year, Michael Szczech, Piedmont’s finance director, told the council Monday.
The city’s recreation-related income went up 9 percent this fiscal year over last, Szczech said, a reflection of the return of Recreation Department programs and facility rentals as COVID has eased. That income, he said, will likely continue to go up. Income from building permits and other construction-related fees has also gone up this past year, he said.
The proposed 2022-23 budget also calls for 4 percent increases in the city’s Municipal Services Special Tax and its Special Municipal Sewer Tax. The Municipal Services tax on homes up to 4,999 square feet would rise from $551 a year to $573, and for homes up to 9,999 square feet would jump from $620 to $644 a year. The sewer tax on homes of up to 4,999 square feet would go from $625 to $651 annually, and from $712 to $741 a year for homes of 5,000 to 9,999 square feet. Larger homes, and businesses, would see similar percentage increases.
City Administrator Sara Lillevand told the council Monday that while the city has prepared well for two budget threats — rising employee pension costs and retiree medical costs — another major issue, upgrading the city’s aging infrastructure and facilities, will demand greater effort.
“From my perspective, (infrastructure) needs to return to the top of the list” of city priorities, Lillevand said.
Deborah Leland, a member of the city’s Budget Advisory and Financial Planning Committee, agreed. She said that while the city’s budget can handle facilities maintenance, it can’t handle the necessary large-scale renovations and replacements needed in the coming years.
“The cost of these infrastructure needs is beyond the city’s current funding capacity,” Leland told the Council Monday.
Monday night was the first of two City Council public hearings on the proposed 2022-23 budget. The second public hearing, and the expected formal adoption of the 2022-23 budget, is scheduled for the city’s June 20 meeting, just ahead of the start of the 2022-23 fiscal year on July 1.
In other actions Monday night, the City Council:
- Approval of spending $329,000 for 2022-23 to extend by 12 months the city’s contract with Computer Courage for information technology (IT) support services. The city approved its first contract with Computer Courage, a two-year agreement, in November 2016, and it has been extended or renewed three times since then. The city anticipates continued work in combined land management/permitting/licensing software, its geographic information system and implementation of a computerized maintenance management software over 2022-23 fiscal year. Tom Jakobsen of ClientFirst Technology, a city consultant, said the technological improvements are expected to pave the way for improvements for consumers of city services, including online billing for services. Lillevand said the city’s systems have gone through an “amazing overhaul” in the past several years. “From my perspective, I think we have been very well served by Computer Courage,” she said.
- Approved appointing Sharon Shohani to the Piedmont Park Commission, and Georgina Russell to the Piedmont Public Safety Committee. Both of those terms are through March 3, 2024.
- Approved spending $250,000 in state Senate Bill 1 funding in 22-23 for pavement projects on portions of Blair Avenue, Dracena Avenue, El Cerrito Avenue, Grand Avenue, Hillside Avenue, Kingston Avenue, Ricardo Avenue and York Drive. Some of these streets are part of the city’s five-year Pavement Management Program, while others are not, but have been determined to need the work.
- Issued separate proclamations declaring June as Pride Month and also as Gun Safety Awareness Month. Mayor Teddy Gray King said she is “thrilled” that Piedmont has declared its all-in support for all people in the LGBTQ community, and said the gun safety issue has, unfortunately, become all too timely, given recent mass shootings in Texas, New York, Philadelphia and elsewhere. “It has been a very somber past two weeks … We cannot stop the effort until, somehow, this epidemic of gun violence has been addressed.”
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