Recommended 2009 – 2010 Budget Submitted to City Council

On August 29, City Manager Craig Kocian submitted a recommended budget for the years 2009 – 2010 to the Arvada City Council.  By City Charter, the City Council must approve a budget by October 31.  At the time of printing of the October/November 2008 issue of The Arvada Report, the Arvada City Council was scheduled to approve a final budget at their October 20 meeting.

The total for all funds in the recommended 2009 – 2010 budget is $162,902,437 and $167,313,317, respectively, and is based on a five-year financial plan which covers the period 2009-2013.  The plan anticipates modest increases in revenues and expenditures over the five-year period. 

In an accompanying letter to the City Council, Kocian stated, “We appear to be standing at the precipice of volatile economic times and an uncertain future, both locally and nationally.  Dramatically rising costs for such fundamental items as fuel, asphalt, concrete, health insurance, and more are impacting family budgets and government’s most elemental ability to serve our citizens.  Simultaneously, the rising costs of fuel and food turn those same citizens’ eyes towards government for assistance.  As the director of Colorado’s Center on Budget and Policy Priorities stated, ‘That’s the conundrum of all of this……When people are facing economic hard times, they turn to (state) governments for assistance, and that's also the time when governments are under pressure to cut the exact same services.’ ”

Arvada’s history of conservative budgeting, underpinned by careful forecasting through the five-year modeling process and our citizens’ passage of the police services tax in 2006, has served the City well.  Despite uncertain economic times, the proposed budget recommends modest increases in the City’s most primary services, made possible by concerted efforts to create efficiencies and hold down costs.  However, these efforts are not without serious longer term consequences, particularly in future maintenance of basic community infrastructure.  Ultimately, the City must improve its economic base to provide for increased revenues or suffer a slow and significant decline in service, maintenance, and capital construction and maintenance for parks, buildings, sidewalks, streets, medians, and other elemental infrastructure.

In the backdrop of unstable economic times, a Council-appointed committee of 33 citizens has been meeting as the Capital Improvement Project (CIP) Committee since September of last year, charged with prioritizing future CIP expenditures.  The extraordinary commitment of these citizens will result soon in recommendations to the City Council that have helped establish the direction for the proposed two-year budget.  (See related story on page 1). 

Unfortunately, due to circumstances beyond the City’s control, staff was compelled to propose rate increases for water, sewer, and stormwater services, realizing that this recommendation occurs during difficult economic times for our customers.  In addition to the increased rates being passed to the City by both the Metro Wastewater Reclamation District and the Denver Water Board, our aging water and wastewater infrastructure (much of which was constructed before 1975) is in need of major maintenance and/or replacement.  In order to simply keep up—not accelerate—our ability to maintain this critical infrastructure, staff reluctantly proposed rate increases of seven percent, nine percent, and two percent for water, wastewater, and stormwater, respectively.

As stated previously, the recommended budget for 2009 – 2010 includes some modest increases, made possible in part by concurrent reductions offered by departments throughout the organization resulting in a savings to the five-year model of $1,450,000.  Proposed increases to the budget include:

$175,000 every other year to provide the spring curbside cleanup program.

Two parks maintenance workers, one to provide specialized focus to Olde Town (including the new plaza and fountain, McIlvoy Park, Grandview and Old Wadsworth Streetscape, the Vance Street promenade, and the new pedestrian plaza at the Wadsworth/Grandview grade separation project) and one assigned to new facilities such as Beeman Park, Saddle Brook Park, Spring Mesa Park, and Sunrise Ridge Park. 

An increase in fuel budgets across all City departments.  Even with conservation, the City’s 2008 fuel budget of $792,600 had to be increased to $904,061.  For 2009, 20 percent has been added to all fuel budgets.  By 2013, the City expects to pay no less than $1.2 million per year for fuel to patrol our neighborhoods, maintain our streets, and provide utility services.

An increase in utilities costs for street and traffic lights.  In 2009 the City will spend $1.5 million in energy costs to keep street and traffic lights on, an increase of $205,000 over what was spent in 2007.  By 2013, the annual costs are expected to reach $1.7 million.

Many street maintenance materials costs are rising as much as 20 to 30 percent each year due to increased petroleum costs, such as asphalt.  The proposed budget accommodates these increases.

The City Manager’s recommended budget for 2009 – 2010 continues a financial management plan which will ensure fiscal stability for our organization and reasonable and appropriate services to our residents, businesses, and visitors.  It is our goal to ensure not only fiscal stability, but citizen satisfaction with our continued operations with the financial resources available.