The Stillwater City Council is preparing to adopt an overall operating budget totaling just over $110 million for fiscal year 2022-2023. That’s almost $2 million less overall than the fiscal year 2021-2022 adopted budget, which ends June 30.
The adopted budget is an estimate of what city staff expects in the coming year, but flexibility is assumed and budget amendments are inevitably made as actual revenues or expenses rise and fall.
Municipal and county governments are required to have balanced budgets so increased expenses in an area require cuts to another area or pulling from reserve funds. They are not allowed to spend more than they have or to appropriate money beyond the current fiscal year.
Other parts of the city government, like the Stillwater Utilities Authority have the ability to borrow money and debt has been funneled through the SUA in the past.
The overall budget for the coming year includes $61.4 million in both revenue and expenses for the General Fund but that includes a transfer in from the SUA of $17.2 million and total of $25.2 million transferred out to other funds within the City of Stillwater, leaving $36,225,817 in the General Fund.
Government accounting is complicated by transfers, which can show the same dollar multiple times as it gets transferred between funds, making it difficult to glance at a budget sheet and tell exactly how much money is being received or spent.
Regardless, the actual money allocated for the General Fund is up almost $2 million from the current fiscal year, in spite of the overall budget being smaller.
The General Fund is where primary operating budget items, including personnel costs, will be found. General government, Transportation and services like Police and Fire, Parks and Recreation and the Stillwater Public Library are funded through the General Fund.
The main sources of General Fund revenue are sales and use tax, franchise fees and taxes, licenses and permits, fines and forfeitures and fees.
The Stillwater Utilities Authority and Stillwater Economic Development Authority and Stillwater Public Works Authority are public trusts that have separate operating budgets.
Their budgets are considered financial plans rather than legally adopted budgets, according to the City’s budget narrative for 2021-2022.
The City of Stillwater is the beneficiary of those trusts.
Revenue from utility sales is received through the SUA, which transfers surplus revenues to the General Fund to cover expenditures and has loaned money to SEDA to fund upfront development incentives for businesses approved through Tax Increment Financing District No. 3.
The TIF is an economic development mechanism – used to encourage development where it might not happen otherwise – that captures increases in property or sales tax collections and uses them to help cover some of the cost of developing or renovating a property for business use.
In addition to the General Fund and trust authorities, the City’s overall budget includes special revenue funds, a debt service fund, capital projects funds, enterprise funds and internal service funds.
The City also maintains reserve funds for major areas of operation, to provide a cushion for emergencies.
The City Council has approved goals for reserve fund balances. In the 2022 budget those targets were:
- General Fund – $11 million
- Electric Utility – $15 million
- Water Utility – $11 million
- Wastewater Utility – $7 million
- Waste Management Utility – $1 million
- Airport Fund – $3 million
The City Council will hold a final public hearing before voting on adoption of the fiscal year 2022-2023 budget at 5:30 p.m. Monday in the Municipal Building, 723 S. Lewis St.