The proposed Seymour city budget for 2016 includes a 2 percent salary increase for employees and little else in the way of new spending.
Mayor Craig Luedeman described the budget as flat, with just slight increases in projected costs for the transit department and the Department of Public Works in the coming year.
The overall 2016 budget is around 1.8 percent or $350,000 more than the current budget, Luedeman said.
City council members got their first look at the numbers during a meeting Monday night.
The city will advertise an overall budget of $18,354,440 with a projected tax rate of $1.66 per $100 of assessed valuation, which is 36 cents higher than the state approved 2015 rate.
But the proposed rate is purposefully inflated and will drop as the city’s overall assessed value increases, according to council member Lloyd Hudson, chairman of the finance committee.
Last year, the city adopted a rate of $1.50 per $100 of assessed valuation.
“We won’t know the actual rate until all of this is approved by the state,” he said. “This is based on last year and half of this year’s expenses. The rate is always less than this, however. It will drop. We don’t know how much, but it will change.”
Hudson said more information may be available by the second reading of the budget on Oct. 26, when it will be voted on.
“When you see it in the paper, it seems like a lot,” Hudson said of the increase in the tax rate. “It’s really deceptive.”
Two years ago, the tax rate ended up about 40 cents less than the one city council adopted, and this year’s rate dropped around 20 cents, council member John Reinhart said.
Luedeman said he expects the 2016 tax rate will come in at or less than the current rate.
The city’s general fund, which pays for city workers’ salaries and benefits and day-to-day operational costs, is the largest fund at roughly $12.5 million, with an advertised tax rate of $1.23 per $100 of taxable property. That’s followed by the debt service fund at $1.2 million (with a rate of 18.26 cents) and the motor vehicle highway fund at $1 million (with a rate of 7.44 cents).
Not all of the 2016 budget will be funded through property taxes. The city is seeking to generate $11.1 million through property taxes and the remaining $7 million will come from income taxes, Luedeman said.
He believes the 2 percent salary increase for city employees is fair but said the city likely will have to do a salary rate study for all departments next year.
“It’s been 12 years at least since we’ve done one,” he said.
Of that 2 percent salary increase, those who are on the city’s health insurance plan will spend half of it to cover increases in health insurance premiums, Luedeman said.
Health insurance costs are always a struggle for the city, he added.
“We’ll probably be short again next year,” he said. “We can’t raise enough money to get health insurance to be stable or above where it should be.”
Negotiations with the city’s insurance provider, however, resulted in the city saving as much as $750,000 for the upcoming year.
“That should help us out in the long run,” he said.
Luedeman said the slight increase in the transit department’s budget is a result of increased ridership and the overall demand on the transit system.
“It will help equal out the drivers’ pay,” he said. “Some of the older drivers are actually making less than the new drivers hiring in, so it was to balance those drivers out. We also added a girl in the office because of new federal regulations that go along with the transit program. Basically, we took one of our drivers and put them in the office.”
Ridership in 2014 was 30,791, compared to 27,975 in 2013.
A couple of temporary positions were included in the Department of Public Works budget for next year to help fix and install sidewalks as part of the city’s sidewalk improvement program, which Luedeman said was popular in its first year.
In 2017, Luedeman said he plans to propose adding a position to take a more aggressive approach with economic development, especially retail development in the city.
“I wanted to do it this year, but the budget just wouldn’t handle it,” he said.
What: Public hearing and adoption of the 2016 city budget
When: 7 p.m. Oct. 26
Where: City hall, 301 N. Chestnut St.