On March 7, the City Council convened as a Committee of the Whole in order to discuss the upcoming budget process with Mayor Ruthanne Fuller. Council President Marc Laredo opened the meeting by explaining that this meeting would take the place of a process in earlier years, in which the Mayor would meet with small groups of Councilors to go over parts of the budget. It also took place earlier in the budget season than those smaller meetings in earlier years. (See NewTV video.)
This meeting was held at The Allen House, and attendees sat at tables arranged in a large U-shape so that everyone could face everyone. The meeting was preceded by a dinner. After the meeting, President Laredo explained to Fig City News that the Mayor had suggested this conference format, as an alternative to meeting in the Council Chamber, and President Laredo thought it was a great idea. He said, “The Allen House is a beautiful setting. It was nice to have everyone together, in person, in the same room. It promotes civility and collegiality. The meeting was a good reminder for experienced councilors about the budget development process, and a good introduction for new Councilors. We also had the opportunity to hear various Councilors’ points of view.”
The Mayor titled her presentation, “Mayoral Listening Session: Council Priorities for the 2024-2025 Term and FY2025 Budget.” The outline included walking through the Key Financial Principles and Guidelines while balancing Overarching Goals. She noted that her administration looks at both a 20-year view in the future and the upcoming year.
The Mayor characterized the FY2025 budget as “…stable, strong, and sustainable …with few opportunities to add funding or FTEs [employees].” She said the vast majority of revenues are very stable. Total expected revenues are $526 million, with 90% coming from residential property taxes and 10% from commercial. An additional $28 million is expected from the state, growing at a predictable but low rate — not enough to keep up with growth in expenditures. Other pockets of low growth are auto excise taxes and fees for parking meter violations.
Unusual revenues include ARPA funds, Free Cash and investment income. The Mayor reported that there is only a small amount of this money left, and all ARPA funds must be fully under contract by December 2024 and fully expended by December 2026. She said her administration has been careful with ARPA funds, not using them for ongoing expenses. Interest income is expected to be large again this year and will become Free Cash this fall, but these are one-time funds.
Total expenses are expected to be $526 million. The Mayor emphasized that 63% of the budget dollars are dedicated to education. The budget for Newton Public Schools (NPS) is expected to be at $282 million, of which 89% of the expenditures are for personnel. The three biggest budgets on the municipal side are Police (24% of the budget), Fire (25%), and Public Works (26%).
The Mayor listed several pressure points on the budget: NPS, Capital Investments and Maintenance, Roads, Trash and Recycling, Fully funding expenses, Inflation, Stormwater, Union Contracts, Retiree Liabilities, and perhaps some unanticipated event or expense.
At the end of the presentation, Councilors raised various priorities and concerns including increased costs to address phosphorous and trash/recycling (Kalis and Danberg), roads (Downs and Grossman), funding education (Grossman, Bixby), school and municipal building projects (Grossman and Lucas), arts and culture programs (Albright), athletic fields (Bixby). Increased stormwater fees, trash and recycling fees, and possible tax increases (debt exclusions) were also mentioned.
Councilor Oliver said he was pleased with the overall tone of the conversation, but he and others (Bixby) stressed the importance of more transparency to better understand tradeoffs (i.e., needs and goals of the departments vs. budget constraints and new-found money). Councilor Block shared his experience in budgeting at the state level and asked the Mayor what process her administration uses. The Mayor explained that they go line by line and see if there are better and smarter ways to implement each department’s goals.
Ed. Note: We corrected the contract deadline for ARPA funds.