Grand Island City Council Study Session on FY2025 Budget – July 16, 2024

The Grand Island City Council held a study session on July 16, 2024, beginning at 6:00 PM, to review the proposed FY2025 budget. The meeting opened with the Pledge of Allegiance and roll call, with all council members present except Councilmember Connolly. Assistant City Administrator Patrick Brown presented a general fund overview, followed by departmental budget proposals from administration, human resources, finance, information technology, community development, and the Community Redevelopment Authority (CRA). No formal votes were taken; the session was for discussion and direction.

General Fund Budget Overview

• Brown reported FY2024 general fund budget expenditures of $56,688,000, with projected actuals of $54,560,000, a savings of $2.1 million largely because fire station 3 construction had not yet begun.
• He noted that vacancy savings typically total at least $800,000 annually. A proposed fiscal policy change would allocate 50% of vacancy savings to the following year's personnel budget and the other 50% to reserves for one-time expenditures. Councilmember Hawsey expressed support for this idea, citing consistent vacancy savings.
• FY2025 budget is balanced with revenues and expenses at $53,792,000, a 1.1% revenue increase and a 3.4% operating expense growth, matching May 2024 inflation at 3.4%.
• Fifteen FTE requests were submitted by departments; administration recommends five: two police officers, a plumbing/mechanical inspector, moving a part-time admin assistant to full-time, and a fire captain. The property tax ask remains level.
• Councilmembers Nickerson and Paulett expressed caution about adding positions given uncertainty over state property tax legislation and multi-year costs. Brown noted that adding more than the recommended FTEs would require new revenue or cuts elsewhere.

Mayor, City Council, Administration, Legal, City Hall, and Clerk Budget

• Administration personnel costs increase 14.5% (partly from sharing a legal secretary with the legal department) and operating costs increase 9.4% (about $20,000) for a strategic planning consultant in early 2025.
• Mayor and City Council budget is unchanged; $10,000 for travel and training remains. Council President Stelk raised a proposed council pay raise; Brown said staff would provide a memo on the process.
• Legal department personnel decrease 0.7% while operating expenses increase 32% ($21,000) for software licensing and travel training for three staff.
• City clerk's office personnel decrease 11.1% due to a retirement, but operating expenses will increase to include $80,000 for the August special election, to be paid from FY25. A discrepancy was noted: the slide showed $35,000, but Brown corrected it to $80,000.
• City Hall maintenance personnel increase 4.4% and operating expenses 4.5% for repairs and upkeep.

Human Resources Budget

• HR personnel increase 4.84% (3% COLA plus step increases for two positions); operating expenses increase 32.18%, primarily for consulting services for upcoming compensation surveys (non-union, FOP, IBW, wastewater) and a $6,000 EAP cost increase.
• No FTE changes. The previously approved recruiter position was delayed because an employee slated to retire chose to stay for another year; HR will soon begin recruiting for that position.

Finance and Information Technology Budgets

• Finance personnel increase 2.98% due to turnover (three positions hired at lower steps); operating expenses increase 3% for the annual audit and certifications.
• IT personnel increase 6.32% due to two reclassifications approved on June 11, 2024, plus step and COLA increases; operating expenses increase 0.88% for contract services and software renewals.
• IT capital outlay of $827,000 previously approved was only about $80,000 spent; the remainder will carry forward to FY25 for PC replacements, server replacements, network switches, and a phone system.
• Councilmember Hawsey questioned whether IT costs per city employee (approximately $4,000 per employee, based on a ~$2 million budget and 500 employees) were comparable to other cities. Mayor Steele directed Finance Director Gleason to prepare a benchmarking memo. IT staff (Stephanie) described cybersecurity upgrades and planned switch and router improvements.

Community Development Budget

• Regional planning: personnel increase 7.32% (step and COLA) and the admin assistant split shifts from 90/10 to 100% within the building department; operating expenses increase 0.62%.
• Building services: personnel increase 18.95% to add a dedicated mechanical inspector (first for the city) and move a part-time admin assistant to full-time. Operating expenses rise from $63,000 to $85,000 for new building permit software and field devices for inspectors.
• Building department revenues are projected at 162% of expenses (budgeted $700,000, actual $1.2 million). Councilmember Nickerson supported the mechanical inspector, noting the need for specialized inspections on large projects.
• CDBG: personnel increase 10.81% (step and COLA, no FTE change), operating expenses unchanged. Grant funds were used for a housing study.

Community Redevelopment Authority (CRA) Budget

• CRA proposes significantly lower revenue for 2025 due to completion of ARPA/Grow Grand Island payments, but the property tax ask increases 3% to $791,000.
• Operating funds remain the same; facade improvement budget increases to $450,000 (from $300,000) to meet demand. TIFF payments include an extra $1 million buffer for flexibility.
• Committed projects include Husker Harvest Days ($200,000), Conestoga Marketplace ($200,000), and various facade/life safety grants. Cash balance is approximately $1 million.
• Councilmember Hawsey asked for tracking of return on investment from facade grants; Nabity agreed to follow up with data. Councilmember Nickerson expressed frustration that facade funds allocated quickly in one meeting, while Nabity explained conservative budgeting due to property tax uncertainty.

Key Outcomes

• No formal votes were taken; the meeting was a study session.
• Mayor Steele directed the Finance Director to prepare a memorandum on IT cost benchmarking for council distribution.
• Staff to provide a memo on the process for a potential city council pay raise.
• CRA to follow up on tracking property value increases from facade grant investments.
• The council will continue department-level budget presentations and consider adjustments before adopting the FY2025 budget.