As city of Buffalo officials prepare for another year of budget setting, they are met with good news – revenues are up from last year.
The 4 percent sales tax revenue, which is used to operate the city, is up by 7 percent over last year’s collections at this time and up by 22 percent over 2018’s collections.
“I predict we will end the year with 4 percent sales tax collections 7 to 10 percent higher than we budgeted,” said Julie Silbernagel, city clerk-treasurer.
The city has $433,818 in the optional 1 percent sales tax fund, which was originally intended to fill any deficit shortfall. With projections up, Silbernagel said she hopes the City Council will be able to put that money to good use.
“My hope is that this won’t be needed in the general fund, and we can push it to capital improvement reserves,” Silbernagel said. “This could help us get started earlier on one of the specific-purpose tax projects.”
Silbernagel said the optional 1 percent sales tax fund also includes $113,750 for the fire suppression system at the Bomber Mountain Civic Center, which will be carried over to next year.
The city is also ending fiscal 2019 on a good note. Silbernagel said the general fund remains in the black, and city officials were never forced to reach into reserves.
“On the other hand, we also haven’t done any chip and seal or pothole patching yet this year,” Silbernagel said. “I see our new shipment of potholes has arrived just in time.”
During a recent audit of the city, conducted by Cloud Peak Accounting, results showed that Buffalo’s water fund had a depreciation shortfall of approximately $179,000 in fiscal year 2018 and a whole depreciation expense of $698,000. A depreciation expense indicates the cost to the city to maintain aging equipment and systems.
“This fund has collected enough this year to cover the year-to-date operating costs, as well as the two upcoming loan payments,” Silbernagel said. “But this fund will probably not cover the depreciation expense for the year. Two options to address this would be a rate increase or to pay off the loans with water fund and capital improvement reserves.”
Options like these will be explored during the upcoming budget season, according to Councilmen Travis Lawrence and Wes Haskins.
The water fund is an enterprise fund, meaning that it’s a break-even service that pays for itself through service fees, according to state statute, and is one of the basic services a city must provide to its residents. The other enterprise funds are sewer and wastewater treatment and solid waste removal; both of these funds have done well over the past year, according to Silbernagel. The sanitation fund will be able to transfer $60,000 to its reserves, as the city saves to purchase new sanitation trucks. The budget season for the City of Buffalo will begin with the first meeting set for April 4.