By Myrna Trauntvein
It is budget-setting time in Utah cities and Nephi is no exception.
The council adopted a tentative revised budget for the year ending June 30 and a tentative budget for the upcoming fiscal year ending June 30, 2014.
The council also established a public hearing on the tentative budgets to be held at 7 p.m. on Tuesday, June 18, at 7 p.m., just prior to the regularly scheduled council meeting.
"The purpose of the tentative revised budget is to adjust the budget adopted in June of 2012, to reflect changes needed due to unanticipated conditions," said Randy McKnight, city administrator.
Budgets dictate what government does and express the key policy decisions and priorities.
As for revising the budget for the year past, that is done, said McKnight, to make certain that each budget is adequate to handle the expenses still to be paid out and cover those budgets that might go into deficit.
By law, each city has to have a balanced budget.
"The fiscal years starts on July 1 and ends on June 30 each year," said McKnight.
In order to set the budget for the coming year, certain steps mandated by the state must be followed. One of those mandates is that a public hearing be held.
"Between now and the time the budget is adopted," said McKnight, "there will be considerable discussion."
Two budgets for the 2012-2013 fiscal year that needed to be revised were the budgets dealing with the golf course and with the organized recreation budgets.
The recreation budget needed to be revised because of changes in the staff and in the scope of the program.
The golf course budget for the past year was set at $254,969 and organized recreation budget was set at $137,782 and the actual amount used will be $155,000.
There are unexpended funds that can be used to balance the budget for the past year.
"There is no state statute to adjust a budget that is under-expended," said McKnight. "The legal requirement is to address those areas that are over budget."
The swimming pool budget reflects the fact that fewer expenditures happened last year than were anticipated and that money will be carried forward so those expenses can be paid.
"The purpose of the tentative revised budget is to adjust the budget adopted in June of 2012, to reflect changes needed due to unanticipated conditions," said McKnight.
The budget for a single year includes all spending and revenues projected for the year between those two dates. According to Utah Code, a major responsibility of local elected officials is to appropriate funds or to adopt and maintain a budget.
In Utah all budgets are "fund" based and expenses must equal revenue and all unexpended funds, except capital improvement funds lapse to respective fund balances on June 30.
A city's fund balance cannot exceed 18 percent of project revenue.
The tentative budget must be presented to the council by the first Tuesday in May and the final budget must be adopted by June 22.
"Besides expenses, we also deal with revenues to be brought in," said McKnight.
In Utah cities, most of the operating revenues come from property tax and for sales tax; with sales tax, the money collected when a sale is made, being the larger of the two.
Cities get only about 15 percent of the property tax collected with schools, counties and special districts also getting some of the property tax collection.
The property tax paid by property owners can change from year to year depending on the collection rate.
Total general fund expenditures for the 2013 through 2014 budget period are expected to be $3,568,222, said McKnight.
The capital projects fund is expected to be $2,301,151; the water and sewer fund should be $767,944; the electric fund is set at $7,110,662; the solid waste fund at $396,380; the natural gas fund at $2,512,332; and the Nephi Industrial Development Agency at $169,069.
The total appropriations budget for all funds is $16,826,761.
The tentative revised budget for the fiscal year ending on June 30 will be $16,030,220.
A public works building is being constructed by the city which will create a place where the garbage truck can be stored so that it can be more reliable on a cold winter morning.
"The final budget adoptions will not be considered by the council for more than two weeks," said McKnight. "The mayor and council will be having additional, in-depth budget discussions in the interim."
Revenue projections are part science, part art, part philosophy and part luck but the goal is that, while some revenue sources exceed projections by similar amounts that other revenue sources lag behind projections.
The budget for the coming year must plan for costs for administration, the justice court, non-departmental, general government buildings, police department, planning and zoning, streets, building inspection, airport, city engineer, parks department, golf course, organized recreation, library, cemeteries and contributions to the capital fund.
"Based on public comment coming from the public hearing or from council discussions, the budget may change between the hearing and its adoption," said McKnight. "Additional revisions to the tentative budget may still be made."