One-time expenditures and increased operating costs will grow Powell's budget by about 10 percent next year, city officials say.
A first draft of the general fund budget for 2013 includes expenditures of about $6.69 million, up from estimated expenditures of roughly $6 million this year. The preliminary budget was set to be reviewed by the city's Finance Committee Oct. 23. The review will continue Nov. 13, with the budget presented to council for a first reading Nov. 20 and a vote to approve the budget set Dec. 4.
Revenue is expected to drop by about $822,000 in 2013, mostly attributed to a grant received in 2012 through the American Recovery and Reinvestment Act that boosted the city's income. Just about $74,400 of the decrease is attributed to other causes, namely the loss of estate tax revenue and reduced state funding.
Overall, city officials project an operating deficit of about $594,000 in 2013. Accordingly, the city's projected carryover balance of $5.86 million for the end of calendar year 2012 is expended to drop to $5.21 million by the end of next year.
The preliminary spending plan would maintain current services despite the deficit.
"The proposed 2013 budget, which is higher than the 2012 operating budget, contemplates providing similar service levels with similar resources," said City Manager Steve Lutz in a written budget report.
The budget does include numerous one-time expenditures planned for next year, including $23,700 in election costs for the May 7 primary, when Powell residents will be asked to vote on a number of amendments to the city charter.
An additional one-time payment of $11,000 will go toward tax code revisions and an audit, and an extra $35,000 is budgeted for increased repairs to drains and sidewalks.
But the main drivers of the deficit are increases in personnel and operating expenses.
Rising health-insurance premiums will raise personnel costs by 6.5 percent, an increase of about $260,000. Increasing gas prices and other expenses will drive operating costs up about 22 percent, an increase of $273,000, according to the budget report.
Meanwhile, revenue sources are expected to be mostly steady in 2013, discounting the $822,000 federal stimulus grant received last year. The grant paid for energy-saving upgrades to city property, including solar panels that now help power the Municipal Building and police department.
Officials anticipate upticks in a few revenue sources, including 2.6 percent in expected income tax revenue. Income tax is the city's largest single revenue source, accounting for roughly 70 percent of revenue to the general fund.
A number of capital improvement expenses in 2013 are contingent upon voter approval of a levy at the polls Nov. 6.
If approved, the 1.8-mill levy would generate $7.1 million over 10 years and cost homeowners $55 a year per $100,000 of home value. It would not raise taxes. It would fund the extension of Murphy Parkway and other road improvements, plus the creation of a new park and extended bike trails.