March 28, 2023 City Council Meeting

Presentation and discussion of the proposed fiscal year 2024 operating budget, highlighting revenue and expenditure increases, and challenges in balancing the budget without significant rate increases or capital investments.

Discussion on the need for increased revenues, utility rates, and other fees to address inflation, rising costs, and maintain financial stability, including potential strategies like grants, leases, and public-private partnerships.

An ordinance amending the 2022 Stillwater Reinvestment Plan, clarifying capital payment obligations to Stillwater Public Schools and allocating increment from District Number 5, with an emergency clause also adopted.

Fiscal Year 2024 Total Proposed Revenue Budget

An increase of 15.9 million compared to FY23, driven by increases in use tax, sales tax, ad valorem tax, fuel sales, electric sales, and water/wastewater revenues.

Fiscal Year 2024 Total Proposed Expenditure Budget

An increase of 11.8 million compared to FY23, primarily due to increases in personnel, health insurance claims, aviation fuel purchases, natural gas for the Stillwater Energy Center, and wholesale purchase power costs.

Emergency Reserve Balances

Discussion on the status of emergency reserve balances, noting that electric, water, wastewater, and general fund reserves are not fully funded due to loans for economic development initiatives.

Health Insurance Expenditures

A projected increase in health insurance claims for FY24, following a 2 million dollar amendment in FY23, with no premium increases passed to employees since FY16.

Utility Rates

Utility rates are estimated to be 13.5% behind due to significant inflation, with cost of service studies underway for electric, water, and wastewater utilities.

Available Fund Balance

Discussion on the declining trend of available fund balance, which has been relied upon to meet budget balancing needs and fund one-time capital expenditures.

Credit Rating

The city and SUA maintain a double A minus credit rating, but S&P changed the outlook to negative due to concerns over fixed charge coverage ratio, higher purchase power costs, winter storm Yuri costs, high transfers from SUA to the general fund, and lack of base rate increases.

Transfers from SUA to General Fund

Concerns raised by credit rating agencies regarding the upward trend, volatility, and lack of a cap on transfers from the SUA to the city's general fund.

Presentation of the Fiscal Year 24 Operating Budget including discussion and Direction staff

Christy Cluck presented the proposed FY24 budget, outlining revenues, expenditures, strategic priorities, and the budget cycle. She also discussed challenges and concessions made to balance the budget.

Presentation regarding the necessity for increased revenues utility rates and other fees

Melissa Reams discussed the future financial outlook, highlighting environmental pressures like inflation and supply chain issues, and potential revenue streams such as sales tax, utility rates, grants, and leases. She also outlined staff priorities including public health and safety, economic development, infrastructure, and workforce.

Ordinance Number 3521

An ordinance amending ordinance number 3494, approving a minor amendment to the 2022 Stillwater Reinvestment Plan, clarifying capital payment obligations to Stillwater Public Schools and allocating increment from District Number 5. It also included an emergency clause.