(STILLWATER, OK) – Annually, City of Stillwater (COS) Leadership review department budgets, revenues and expenses, anticipated expenses to complete the fiscal year, and balance budgets per the law, while preparing for the upcoming fiscal year. Though General Fund revenues are increasing and sales tax collections are at an all-time high, action from Council was necessary to ensure a balanced budget due to three main reasons.
This fiscal year there was an increase in General Fund expenses of $290k and more than $300k in the Stillwater Utilities Authority due to inflation. Funds are typically transferred from SUA to the General Fund to balance the budget.
“Projects that are currently out for bid are estimated at a higher cost for completion than anticipated and budgeted. Inflation is one of the big reasons why we are experiencing a negative growth in revenue. Inflation for calendar 2021 was 5.1%. It is now 15.7% since utility rate adjustments (minus Waste Management) last occurred, which is an increase of more than 10%,” said Finance Director Christy Cluck.
Additional strains on the budget are due to $3.6 million from the fund balance used to pay Grand River Dam Authority (GRDA) for Storm Uri expenses. The total amount was more than $7 million, customers are paying half throughout 36 months with no interest charged, which is an average residential increase of $2.50 per month.
The other contributor to budget distress is while inflation has rapidly increased, there has been no change in utility rates to customers. Anticipated energy expenses and revenues are both $5.2 million, leaving a net revenue of zero to cover other expenses.
Historically, the rate escalator has been used to offset inflation. The rate escalator was last passed on in 2018.
“While nobody wants their electric bills to go up, it is important to point out that we have had two utility assistance programs and we are about to begin a third program. The City has covered half of Storm Uri’s expense to prevent customers from being charged that full amount,” said Councilor Christie Hawkins.
City leadership explained, if the rate escalator was reinstated that it would offset higher material costs for completion of projects and allow adjustments to employee compensations to be competitive in today’s job market.
Mayor and Council requested City staff bring the Rate Escalator Resolution to a future meeting for consideration.
Stillwater’s Human Resources Director Christy Driskel explained there are vacancies that have not been filled in two years and recruitment is challenging in today’s economy and workforce climate.
“We must be fully invested to retain our current quality employees and want to do what is needed to recruit and fill these positions. If we do not have personnel in departments then certain services cannot be provided,” Driskel included.
Driskel expressed that a layered approach is necessary to be competitive when hiring and it should include compensation, retirement, benefits and more responsive hours of operation. She included, “The City has been able to make adjustments with insurance companies to ensure there is no cost increase in to staff members for health, dental or vision.”
City Leadership is researching and evaluating tangible options to increase compensation to begin Fiscal Year 2023.
Deputy City Manager Melissa Reames presented options for improving the retirement vesting schedule. To be fully vested currently, staff members must be a full-time City of Stillwater employee for 10 years. The current employer contribution could also increase from the current 6%.
“Years of service for our current employees would be applied toward the new vesting schedule. Also, under the new retirement plan, individuals who reach age 65 will be fully vested regardless of years of service,” explained Deputy Manager Reames.
Mayor Joyce asked Deputy Reames to fine-tune the numbers, vesting schedule options and bring back to an upcoming Council meeting in April.
As determined at the previous Council meeting, New City Hall operation hours will begin on Thursday, June 2. The days and hours at City Hall will be Monday-Thursday, 7:30 a.m.-5:30 p.m. and Friday 7:30-11:30 a.m.
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For inquiries, contact Dawn Jones, PIO, Communications Department at (405) 742-8214 or email dawn.jones@stillwater.org.
