The Watertown City Council approved the city’s 2013 general fund budget and tax levy during its Dec. 11 meeting. The 2013 general fund budget is nearly identical to the 2012 budget, but the overall tax levy will rise 3.9 percent to $1.8 million due to an increase in the debt service levy.
The 2013 general fund budget is set at $1.68 million, compared to the 2012 budget of $1.66 million. However, the overall levy increase of 3.9 percent is to due to a $77,000 increase in the debt service levy, an increase that city administrator Luke Fischer said was driven by the realization that the city has not been levying enough to manage its debt in recent years.
While the debt service levy will increase by 12 percent next year, it would have increased by much more — 28 percent — had the city council not been able to eliminate the water and sewer component of the debt levy. In 2012, nearly a quarter of the $415,864 debt service levy went to support the water and sewer and funds, but this year, because of recent utility rate and fee increases, those enterprise funds are expected to generate enough revenue to support themselves. As a result, the debt service levy is actually about $100,000 lower than it might have been.
The final 2013 budget is significantly lower than the preliminary budget that was passed in September. The preliminary budget sets a cap for what the city’s budget can be, and the city of Watertown historically sets a high preliminary levy before working to reduce that number in the coming months.
On Sept. 11, the preliminary levy was set at $1.84 million, which would have marked an increase in spending of 9.37 percent over 2012 and a total levy increase of 15. 8 percent. However, the city council was able to cut $157,968 from that preliminary levy, a decrease of 8.6 percent.
A large portion of the cuts made during a series of budget workshops since September stems from the reduction of two full-time employees. During its budgeting process, the city council chose to eliminate the positions of Senior Planner and Utility Billing Clerk due to market conditions, including stagnant development, and technological advances that have eliminated work demand. It is estimated that this restructuring will reduce the city’s 2013 budget by $50,000.
The recent staffing changes complemented changes earlier this year, including a restructuring of the finance department after the city separated with its finance director, and the reduction of one full-time public works employee through attrition. Overall, the city’s personnel related expenses are estimated to be reduced by roughly 22 percent in 2013.
One significant change to the 2013 budget is the addition of a Capital Improvement Plan, which is budgeted to receive $132,250 from the general fund. The city is still in the early stages of developing a CIP, which is designed to enable the city to better plan for equipment maintenance and replacement. While the city has always managed to pay for those needs in the past, this is the first time there will be line item in the budget to specifically acknowledge those needs. The goal is to have funds on hand for those projects, rather than sell bonds any time a major expense is encountered.
The Economic Development Levy, which is used to support economic development in Watertown, is set at $40,806. That’s down about $6,000 from 2012, due to a decline in market value in Watertown.
The 2013 levy will include a small increase in the city portion of property taxes for most homeowners in Watertown, although that obviously will depend on the changes in valuation for each property from 2012 to 2013. However, a fairly typical $175,700 home will pay roughly $1,007.27 for the city portion of its taxes in 2013. By comparison, a home with that same value would have paid about $942 in 2012.