In the City of Springfield’s annual budget report, City Manager Gina Holt is suggesting a 25-percent rate hike for stormwater, an eight-percent increase for water and a two-percent rate increase for sewer.
In October, a 1.5-percent rate increase is anticipated from TVA.
All other rates are projected to remain the same, according to a memo from Holt to the Springfield Board of Mayor and Aldermen sent on April 29. The total funds budgeted for revenue in the draft for the General Fund and all of the city’s utilities is $86,077,200, with the expenditures projected to be $86,138,188.
“Both revenues and expenditures are forecast at a slight reduction from the current fiscal year,” Holt wrote.
She said she’s been very conservative with the revenue and expenditure estimates throughout the entire budget.
“We are continuing to move forward by focusing more on using depreciation, operating funds and, where necessary, reserve funds to balance budgets and reduce borrowing,” Holt said.
The General Fund proposals include the use of revenues of $20,279,189 to pay for expenditures of $20,654,663.
Holt noted that the unrestricted cash reserves in the amount of $375,474 will be used to balance the budget.
“However, included in expenditures is $124,989 for a buyout of golf carts,” Holt said in the draft memo. “We will not exercise this option, but we are required to show this amount as debt.”
She indicated that a more realistic estimate of cash reserves being used to balance the budget is $250,485. The projected fund balance at the end of FY20 will be $7,473,963.
Employment pay could increase
The city manager is proposing a 3.4-percent across-the-board pay increase for the city’s 254 full-time positions and the four regular part-time employees. Holt said she’s hopeful the pay increases will help to recruit employees when needed.
“Another matter to address is the compensation of three department heads who are currently on steps two or three in their levels,” Holt said. “If we are fortunate to find a qualified candidate for the public works director, the new hire will probably start at step five.”
The steps are part of a new classification and compensation plan the city implemented three years ago.
The assistant city manager, police chief and parks and recreation department head would all be moved to step five in the proposed budget, so that a new department head cannot be compensated at a higher step than the current employees.
“The remaining department heads will be at step six and above with the new budget,” Holt said.
The estimated cost for these increases is estimated to be $14,500.
The 25-percent projected rate increase would be the city’s first increase since the stormwater rates were implemented in 2011, according to Holt.
The current storm water fee for single family residential properties is $2 per month, according to the city’s web-site. An average residential bill will increase from $2 monthly to $2.50 a month.
Large industrial and retail customers will have average increases from $60 to $120 a month, with the highest customer bill increasing by nearly $300 monthly.
With the eight-percent proposed rate increase for water, the average residential customer using 5,000 gallons of water monthly will see their bill go up $3.16 to $42.64, according to Holt.
The largest expenses include the Highway 257 water line replacement project, which will cost $500,000 in the year 2020 and an additional $2 million in 2021.
There has been $1,380,000 budgeted in the draft for six months of water to be purchased by the Logan Todd Regional Water Commission. The project is estimated to be completed by the end of the year, with the city purchasing 2.3 million gallons of water per day by next January.
The cost of the water is $3.29 per 1,000 gallons. The cost for the water in the 2021 fiscal year is anticipated to be $2.8 million for the full year.
The cost of city sewer is high, Holt notes. She has proposed increasing the rate by two-percent, following recommendations from a rate study by the Municipal Technical Advisory Service (MTAS).
Average residential customers could see their monthly bill increase $1.44 to $73.54.
An additional smaller rate increase is anticipated for next year.
“We have to remain compliant with the Wastewater Facilities Act of 1987, which means we must have a positive change to our net position at least every other year,” Holt said. “We are compliant at this time, but we need to be vigilant with our resources.”
A two-percent rate increase has been placed into the budget draft for all customer classes.
The current water rates can be viewed at: https://www.springfield-tn.org/240/Water-Wastewater-Rates
Holt said the community is beginning to see quite a bit of interest for both infill and redevelopment, as well as new residential and commercial development.
“If only a fraction of the development proposals reviewed with staff come to fruition, then many others will follow,” Holt said. “Springfield will benefit from the traffic congestion and high cost of living in Nashville. We are on the cusp of major development headed our way.”
The proposed 2020 budget continues to move the city forward with many large capital projects geared to contribute to the growth, according to Holt. They include:
*The extension of William A. Batson Parkway
*Improvements with water/wastewater
*Electric system improvements
*Upgrades to Martin Luther King Jr. Park
Holt said that Springfield is situated in a great geographic location, with many amenities close by and many opportunities for growth and development ahead.
She encouraged the board to be advocates for the city and promote, “the positives every chance we get.”
The Springfield Board of Mayor and Aldermen is scheduled to meet with city staff members and administrators at 5 p.m. on Tuesday, May 7 in a special-called meeting at City Hall to review the proposed Fiscal Year 2020 city budget. The meeting is open to the public.