NORMAN — City Manager Steve Lewis has presented a $200 million-plus budget to city council members for consideration for the fiscal year that begins July 1. The budget is more than last year's but remains “lean and mean,” Finance Director Anthony Francisco said.
The proposed budget of $204.1 million is about $45 million more than the previous year's budget of just over $160 million, but Francisco said most of the increase is due to increased costs for capital improvements in the wastewater and water departments.
The budget maintains current staffing levels and includes no cost-of-living raises, Francisco said. It does include merit raises and longevity pay.
“While $204 million sounds like a big number, for a city our size it is relatively small. An average budget for a city our size would be about $280 million, so ours is pretty lean and mean.”
Francisco reviewed the proposed budget with city council members in a study session Tuesday. The general fund portion of the proposed budget is about $71.3 million. The city's main operating expenses are paid out of the general fund.
The proposal is based on a predicted 4.25 percent growth in sales tax revenue, based on historic growth patterns, Francisco said.
The main source of revenue for the general fund is city sales tax. Other sources are state use tax, franchise tax, and fines and forfeitures.
The city is still spending more than it is taking in to meet current service levels, Francisco said.
“This has been the trend for several years. It causes us to draw down on our reserve funds, which is not a good thing,” he said.
The overall economic outlook is for slow, continued improvement, Francisco said, “but there are clouds on the horizon.”
The world economy is volatile and military and defense cuts could negatively affect Norman's economy, he said.
The city's work force is aging, which means costs associated with health care and retirement are increasing, Francisco said.
Mayor Cindy Rosenthal said she is concerned about the city's end-of-year fund balances, which continue to shrink because expenditures are outpacing revenue.
“It does not bode well for the health of the city,” she said.
A public hearing on the proposed budget will be May 22. The budget will come before the city council for final approval on June 12.