Members of the Vermillion City Council had to deal with a factor that no other city council has faced for approximately a century -- formulating a budget during a global pandemic.
They were successful in doing just that during their budget meetings last month thanks to paying attention to budgetary details.
More work lies ahead because the city is scheduled to receive potentially $1.8 million in federal American Rescue Plan funding which will affect both the 2021 revised budget and the 2022 budget.
Tuesday night, city council members approved a 2022 appropriations ordinance that includes total general fund revenues of $7,986,725, second cent sales tax fund total of approximately $2.2 million and a Bed, Board and Booze (BBB) revenue total of $380,000.
It also approved the first reading of a revised 2021 appropriation ordinance that allows the council to make changes to the city’s 2021 budget, which was adopted last year at this time. The revised appropriations budget includes changes and adjustments made to the 2021 budget based upon actual financial information obtained thus far in 2021.
“I know the council spent a lot of time on this; the department heads and staff spent a lot of time in developing a budget for the community for the 2022 year,” City Manager John Prescott said, “so thank you to everybody who has contributed and helped with that process.”
He said that the council received over 200 pages of recommendations for the 2022 budget.
“In two special meetings earlier in August -- on the 9th and 10th – the council went through those pages and developed the budget proposal they will be voting on,” Prescott said, explaining the process to members of the public viewing Monday’s meeting.
The American Rescue Plan poses a big change to the city’s propose budget.
“We anticipate receiving about $982,000 from that. We anticipate half this year and the second half (in that same amount) no sooner than a year later,” he said, “which would be during our 2022 budget.”
It is projected that the city’s first and second penny sales tax revenues will go up about 3% over its revised 2021 number.
“In the next ordinance, you will be revising sales tax receipts by about $85,000 for both first and second penny, so we are seeing some rebound and certainly when you were adopting the 2021 budget during the pandemic of 2020, you did not know how this year would unfold,” Prescott told council members.
He shared additional positive financial news with council members. The city’s BBB (Bed, Board and Booze) fund and receipts for BID #1 from occupied hotel rooms are seeing an increase in 2021 compared to 2020 at this same time and are on par with 2019 which displays a good sign. An anticipated increase in revenue for 2022 is projected for both funds.
“There is no increase in electric rates that’s proposed in our 2022 budget,” Prescott said. “We are looking at a 2% increase in our water rates. Our curbside recycling program has proposed a 20 cent per month increase to help with the curbside recycling costs.”
The city will also review wastewater rates in April 2022, he said, to see if an adjustment is needed.
“One of the things that people ask is ‘what are you going to do next year; what are the exciting things that are going on?’” Prescott said.
He shared some of those improvements that are included in the 2022 budget.
“In Prentis Park, we’re continuing to make improvements. Next year, we’ve proposed to update the outfield and the fence (of the ballpark),” Prescott said. “A couple years back, we had a project to re-do the infield. This would increase that project with the outfield and the fence.”
Improvements are also planned for the WPA-era bandshell in the park that serves as a focal point for everything from outdoor weddings to the annual South Dakota Shakespeare Festival.
“It’s been a long time since the 1930s and that wall needs some rehab and renovations done to it,” he said, “so we’re going to hopefully find a mason to help us make some repairs and continue to stabilize one of the centerpieces of our park.”
Other planned improvements for the park include the addition of a sand volleyball court and the addition of a new sidewalk along Prentis Avenue from the ballfield south to Main Street.
It is also hoped that renovations can be made to the Lions Park campground.
“We have applied for land and water conservation funding. Hopefully we will receive that, and that paired with dollars in your proposed budget for 2022 would allow that project to happen,” Prescott told city council members.
The city will hopefully be able to move forward on the Vermillion River Bike Path/Walking Trail project in 2022, he added, along with the installation by the water department of new AMI meters and the design of a new lift station in northeastern Vermillion.
“We do have some proposed increases in street funding. A slurry seal for the downtown area is what we’re looking at next year which would enhance the driving surface and to use non-engineering terms, give it a new, black, smoother coat,” Prescott said, “and we’d also get our parking stalls aligned where they need to be with the improvements that have been made.”
The 2022 budget will include a 3% cost of living adjustment for city employees.
“We’re still waiting on our health insurance; it usually comes in at the end of September or the first part of October and any increase will hopefully be minimal for next year.”
Funding is also available in the 2022 Appropriations Ordinance to meet the requests of outside agencies.
The city council also approved the first reading of the 2021 revised appropriations ordinance which makes needed changes to the city’s 2021 budget that was approved by the council in September 2020.
“As we all know, a budget is a plan and not everything comes out exactly as we may hope and there are changes and flows along the way,” Prescott said. “This is one of the changes with our 2021 budget.”
Part of the revisions for the 2021 budget include accounting for the funding stream from the American Rescue Plan.
“We received some additional funding for the Historic Preservation Commission. They did a program, brought in a speaker at the end of July and did some additional programming,” the city manager said. “We also had some additional expenditures that we’ve discussed along the way. We have a new Christmas tree for Ratingen Platz that I’m anxious to see -- I’ve only seen the boxes -- and it will be displayed for the first time this year and we hope it will last for many years.
“This is a new item for Ratingen Platz in partnership with the Vermillion Chamber and Development Company that was an addition and change to our budget since you adopted the 2021 budget,” he said.
In 2019, the city provided a portion of funding that helped with the operation of the Vermillion Transit Bus. A bus originally budgeted in 2019 arrived early this year so one of the revisions of the 2021 budget is to account for the funding the city approved for the new bus.
The revised budget also includes the cost of paving Roosevelt Street east of N. Norbeck Street. Roosevelt Street was paved in 2020 but a delay in closing out the project led to the final payment taking place in 2021.
“Some good things for our community include the Bliss Pointe phase two development. At this time last year, we didn’t have a very exact amount of what the costs would be for the infrastructure that’s the city’s responsibility,” Prescott said. “We know that number now, so that’s a revision for 2021.”
Stimulus funds were used to purchase a used garbage truck to help with cardboard recycling and several smaller changes were made line items in the 2021 city budget.
All of the needed changes revised the general fund from $8.4 million to $9.3 million.
“Interestingly enough, that is just about the same amount as the American Rescue Plan,” Prescott said. “It’s only off about $20,000.”
Second penny revenues and expenses are revised in the ordinance from approximately $3.287 million to $3.3 million.
One more revision to the budget will be made in December to allocate any needed funding before the start of the 2022 city budget in January.