BY FREDA MIKLIN
STAFF WRITER
At a study session of the Cherry Hills Village City Council on October 3, Doug Farmen, CHV director of finance and administration, presented highlights from the proposed 2023 City Budget. The official budget presentation is scheduled for first reading and a public hearing on November 15.
Total 2023 revenues for the city are expected to be $13.2 million, with $8.5 million of the total budgeted for the general fund, $2.9 million for the parks and recreation fund, and $1.4 million for the capital fund. The general fund budget is balanced by transferring any surplus of revenues over expenditures to the capital fund. For 2023, the amount of that transfer is expected to be $417,242.
Property Tax is the city’s largest revenue source, accounting for $2.8 million, or one-third of general fund revenue. The next highest sources of general fund revenue are sales tax and motor vehicle use tax, each of which are expected to account for 14% of general fund receipts in 2023. Farmen told the city council that he “is assuming a stable local and national economy in 2023,” and expecting revenue sources to mirror their actual performance in 2022.
Farmen noted that, “The building industry is dependent on economic conditions,” and CHV’s forecast for building permits and plan review fees is expected to be about the same in 2023 as 2022. He pointed out that the actual amount for 2022 is presently anticipated to be 20% above what was budgeted for 2022 one year ago. City Council Member Al Blum, who is in the business of building high-end residential homes, pointed to the recent increase in interest rates, noting, “In my industry, we are seeing a big slowdown, projects put on hold.” He wanted to know if the estimates for building-related revenues might be too high. Farmen replied that he was comfortable with the estimates that were proposed but that he believed any shortfall would be offset by increased interest income as a result of rising interest rates. The 2023 budget currently anticipates interest income of $270,000, compared to half that amount expected to be earned in 2022.
Pointing to expected changes in 2023 expenditures compared to 2022, including an 8.5% increase in personnel costs over the current estimate for 2022, Farmen said, “Recruiting and retaining city personnel by offering competitive compensation is a high priority,” noting the city manager is proposing a four percent cost-of-living adjustment for all employees and a two percent merit increase for eligible employees. He said that other cities had given their employees mid-year salary increases in 2022 that averaged 4.5%, and were planning increases of five to six percent in 2023. He pointed to the fact that CHV had a higher than usual turnover rate in 2022 due to competition for employees from the public, as well as the private sector.
When Council Member Mike Gallagher asked if departing employees had cited salary as the reason they were leaving during exit interviews, City Manager Chris Cramer said they had not, but he believed the proposed salary increases were warranted to retain high-quality staff.
CHV will add an additional school resource officer (SRO) in 2023, the entire cost of which will be borne by private schools Kent Denver and St. Mary’s Academy. On September 6, officials from both schools testified at the regular CHV city council meeting that they wished to fund this position to provide additional safety for their students. Prior to 2023, CHV had one dedicated SRO who split their time between Cherry Hills Village Elementary School, Kent, and St. Mary’s. Beginning in 2023, two sworn officers will share this duty instead of one at no additional cost to city taxpayers.
Other expenditure highlights for 2023 include a wellness program for sworn personnel for $20,000, a subscription to a service that provides automated license plate readers for $12,500, computer tablets for field personnel to be purchased at a rate of three every year until all field personnel are equipped, and $25,000 for a contract for storm event clean-up costs if needed.
The city plans to install an electric charger, which will cost $23,000, but intends to apply for a grant to offset part of that cost.
Also planned for 2023 is the expenditure of $31,000 for public art, including $10,000 for a sculpture at John Meade Park.
In 2021 and 2022, CHV received $1.7 million total in American Rescue Plan funds, which it recorded in a stand-alone fund so that it can make sure it uses that money for the specific purposes for which it was intended. A total of $195,540 from that fund was expended in 2022. Presently, there are no plans to spend any of the remaining money in 2023. These funds must be appropriated by 2024 and spent by 2026.
The city’s projected unrestricted general fund balance at the end of this year is $11.2 million and expected to remain the same at the end of 2023. Long range financial forecasts are being deferred until the outcome of the sales tax ballot issue is known after the November 8 election.
The balance in CHV’s capital fund is projected to be $8.5 million at the end of 2023, down from $8.9 million at the end of 2022.
Of the total CHV municipal mill levy of 14.722 mills, approximately half is credited to the Parks and Recreation Fund each year. For 2023, that amount is $2.9 million, the same amount as in 2022. The ending fund balance for the Park and Recreation Fund in 2023 is projected to be $1.6 million, a decrease of $643,080 from the 2022 ending fund balance of $2.2 million.
fmiklin.villager@gmail.com