In a significant gathering at Watertown, SD, the City Council embarked on its inaugural discussions regarding the budget for 2025. This critical session laid bare the intricate tapestry of budget appropriations, encompassing both the city budget ordinance as well as the budget for enterprise funds.
Chief Financial Officer, Kristen Bobzien, unfurled the first reading of this budget ordinance, delving into the intertwined realms of the General Fund alongside various special revenue streams. Notably, while the enterprise funds budget was evaluated in isolation, it still necessitated the council’s approval—a testament to its importance.
Council member Mack spotlighted key facets of the forthcoming budget, outlining several pivotal elements:
- Budgeted Deficit Reduction: An encouraging decrease was noted in the projected deficits stemming from the general fund, indicating a more stable fiscal outlook compared to prior years.
- Wage and Health Insurance Adjustments: A planned 4% augmentation in wages paired with a substantial 7% rise in health insurance costs reflects the city’s commitment to employee welfare.
- Sales Tax Projections: The budget earmarked a modest sales tax growth trajectory, pegged at 2.1%, indicative of cautious optimism in the local economy.
- General Fund Expansion: The general fund is set to witness a $0.41 million boost from the last adopted budget, translating into a 1.6% escalation.
City Manager Amanda Mack underscored a strategic emphasis on operational efficiencies and enhancements that promote long-term financial viability as the cornerstone of the 2025 budget.
Delving deeper, Bobzien outlined notable modifications from the preliminary budget hearing to the ordinance that followed:
- Wellness Center Initiatives: A positive adjustment arose due to equipment allocations within the Wellness Center and the Capital Improvement Fund.
- Parks Department Modifications: Adjustments led to a minor reduction in positions budgeted for the Parks Department.
- Casualty Reserve Fund Dynamics: The closure of this fund moved $15,000 to other uses, streamlining city expenditures.
- Pay Grade Corrections: A necessary increase of $15,000 addressed previous inaccuracies in pay grade allocations.
- Capital Improvement Fund Growth: This fund saw an infusion of $43,000 designated for a mobile equipment lift that was initially omitted from early calculations.
Amidst the discussions, Councilman Randy Tupper probed the overall strategy and any potential budgetary cuts. In response, Mack reassured attendees that no service or staff reductions occurred; rather, the budget was tactically “right-sized” based on empirical expenditure trends over the last half-decade.
Additionally, the anxious specter of IM 28—a prospective ballot measure with potential ramifications on sales tax revenue—loomed over the deliberations. Mack clarified that the current budget does not factor in possible revenue declines linked with IM 28, as its implications would not manifest until the latter half of 2025. She, however, assuaged concerns by asserting that contingency plans are firmly in place to navigate these uncertain waters.
Counterbalancing optimism, Councilman Lynn Jurrens raised apprehensions concerning the assumptions underlying projected sales tax growth in light of the prevailing economic milieu. Nevertheless, Mack reiterated the city’s conservative fiscal approach and expressed confidence in the projected 2.1% growth, anchored in historical performance metrics.
The clock is ticking—the budget must receive the Council’s seal of approval no later than November’s end. The stakes are high as the city navigates fiscal management in today’s unpredictable financial landscape.
