ST. GEORGE — Despite taking a short-term hit on Southern Utah’s moneymaker – tourism – city officials say the St. George budget is sustainable for now.
The city has presented its preliminary 2020-21 budget, and it is now open for public viewing before community members will have the chance to comment.
“These are challenging times,” St. George City Manager Adam Lenhard said. “When we first started this process six months ago … it was a totally different world, a totally different economy. The original plans we came up with have changed a lot.”
The city has nearly a $303 million budget for 2020-21, with more than $70 million in its general fund account. This represents a $50 million decrease – or a 14.2% drop – from the current year budget.
Although there was a decrease in the general funds, a large portion of the decrease came from the completion or canceling of major capital projects, including the completed $26 million airport runway reconstruction and the city hall and police building expansion project, which was approved in 2020. Approximately $12.6 million was canceled because of the economic downturn from COVID-19.
St. George’s budget and financial planning manager, Deanna Brklacich, said the budget proposal will now undergo public scrutiny, with two open meetings scheduled for June 4 and June 18. By state law, the budget must be officially adopted by June 30.
Brklacich said the 2020-21 budget has been a moving target.
“When COVID-19 hit, we stopped and pretty much pumped the brakes,” she said. “We sent the budgets back out to all the departments to redo them, and then we had to go through the process all over again.”
Brklacich said the recommended budget on the general fund side also experienced a decrease of $7.1 million, which is slightly more than a 9% drop.
“This is not due to projects. It’s due to COVID-19 and having reduced revenue and cutting our expenditures,” she said, calling it a “pretty significant cut.”
To accommodate the reduction in revenue, the city will draw from its appropriated fund balance – more commonly known as the “rainy day fund” – to realize a balanced budget for 2020-21.
“We are only pulling a little less than $200,000 out of the appropriated fund balance,” Brklacich said. “This is less than one-quarter of 1%, which is a really good sign. Hopefully, when we turn a corner, we can have some budget openings and increase that budget.”
Composition of St. George budget
- General Fund: 23%
- Enterprise Fund: 53%
- Capital Fund: 21%
- Economic Development Fund: 1%
Expenditures
- Personal Services: 23 %
- Material and Supplies: 26%
- Capital Outlays: 31%
Specific line items
- Create and contributed $250,000 to the Greater Together Small Business Resilience Fund (2020).
- More than $70 million recommended (2020-21) for operating expenses that include personnel costs.
- Increase of 5.59% in annual health care premiums to city employees.
- Property taxes fiscal year 2021 estimates $9.9 million.
- Police and dispatch expenditure $19.8 million.
- Fire Department $7 million.
- Parks and sports fields $7.2 million.
- Airport $3.9 million.
- Golf courses $5.3 million.
- Recreation $4.3 million.
- Community development $2.1 million.
- Other leisure services $833,493.
- Community arts $614,817.
- Debt service and transfers $1 million.
“We are not proposing an increase in property tax,” Brklacich said. “But we are including a couple of fee increases for our enterprise fund … (extending) the $1 per month per residential base increase on (power for five years) and … a new water rate schedule that incorporates a pass-through 10 cent per 1,000 gallons of wholesale water costs from the Water Conservancy District.”
The city is also asking to increase sewer and wastewater fees from $11.50 to $15.50 per month.
Before COVID-19, the city was experiencing a strong increase in sales tax revenue of approximately 7.5%; however, since the pandemic struck, it has experienced a loss of about $388,000 per month, which decreased the estimate for the fiscal year 2021 by approximately 30% – a decrease of more than $4.6 million or a 21% drop.
St. George Mayor Jon Pike said there will be plenty of time to go over the budget, and City Council member Dannielle Larkin agreed.
“With COVID-19 I can’t imagine going in and slice and dice to get to what we can afford,” Larkin said.
In a sober note, Pike said city employees are likely to feel the effects of the economic downturn caused by COVID-19.
“We will want to make it up to them when we can,” Pike said. “We appreciate them … but we will not be taking raises in the coming fiscal year. There is some level of increase, but for the most part (employees) will not be getting the raises they would normally receive.”
According to city officials, all of the compensation increases have been removed from the 2020-21 budget.
“I think our employees realize the situation that we are in,” Lenhard said. “They understand when everybody gives a little bit, and I think for the most part our employees are grateful to have employment and to serve this community. … We are going to be OK.”
Pike added that the city is going to have to take the lead to get jobs back and not rely on state directives.
“We are going to step up,” he said. “It’s going to take all hands on deck – not just state, but locally – to do that and make sure we are addressing the needs of those who need it the most.”
It’s been crazy, Pike added.
“A day has seemed like a week and a week like a month and a month like a year,” he said. “This has been since March 11 basically, and it feels like forever. I think we will get there, and I definitely feel a door (has) opened.”
One silver lining on the budget is that is user-friendly for the community to digest the information before the public hearings.
The national Government Finance Officers Association has singled out St. George for the first time by presenting the city with the Distinguished Budget Presentation Award. To qualify, the city must demonstrate that the budget is easy to read and interpret by citizens.
“It can be a little intimidating to crack open a 311-page document and make sense of all of the different numbers,” Lenhard said. “Presenting the budget in a way that’s (understandable) is the best way to do business when it comes to our finances.”
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