$354 million FY24 budget approved for city of Broken Arrow
By John Dobberstein, Editor
The Broken Arrow City Council has approved a $354 million budget for the 2023-24 fiscal year that includes funding for new positions, equipment purchases, upgraded computer and security measures and more.
Out of the total budget, $155 million is for operational costs, a 9.7% increase over the previous year, while capital outlay came in at $164 million, a nearly 20% increase compared to 2022-23. Debt service makes up nearly $36 million of the total, up 8% over the previous year.
The budget increase can be explained by several items, the city said: a cost-of-living wage increase for city employees; 14 new positions; a $40 million bond sale in fiscal year 2023 for the 2018 bond package; a $19.5 million Oklahoma Water Resources Board loan; three side-loader trucks purchased for the sanitation department, and the 1% PSO franchise fee paid by customers for economic development initiatives.
Upgraded computer software and security measures, funds for a classification and compensation study and a 3% increase in insurance premiums also factored in.
Financial picture ‘very stable’
City Manager Michael Spurgeon says the overall fiscal health of the city is “very stable” due to balancing operational needs with “continuing a conservative approach to the use of our available revenues.”
The city’s reserves are adequate, he says, to temporarily offset any unforeseen situation or circumstance that could occur, such as a natural or man-made disaster, downturn in the economy or unanticipated increases in the cost of doing business.
The city’s bond rating is unchanged and revenues are coming in above projections, but city officials say the year-to-year picture is often unpredictable because Oklahoma is one of the last states in America that uses sales tax as the primary revenue source to fund general fund operational expenses.
“It is enormously challenging to precisely estimate revenues in such an unpredictable system,” Spurgeon says in a written narrative for the coming year’s budget. “Because our state continues to use this antiquated business model, we spend an excessive amount of time chasing sales tax-type businesses to give our citizens more opportunities to shop local, therefore maintaining and growing our tax base.
“Conversely,” Spurgeon adds, “sales tax and other fluctuating revenues that under-perform lead to missed projections, causing reductions in operational expenditures. This could ultimately affect the level and breadth of services we provide to the community. This will continue to be an issue until we have an overall better or more diversified source(s) of revenue for municipal operations.”
Public safety looms large
City officials admit it’s becoming a bigger challenge to identify funds for Broken Arrow’s police and fire departments, which collectively have a budget of about $30 million.
There were plans to ask voters for permission to create a “public safety” district in Broken Arrow to help fund the police department through property taxes. The city planned to ask for 5 mills – one mill equals $1.1 million annually – to help pay for operations and capital.
But several Oklahoma cities believe this solution could conflict with the state’s constitution. Spurgeon said the Oklahoma Attorney General’s Office is looking at the issue and may render an opinion this summer.
Public safety (police and fire) consumes all available operational sales tax and 22.8% of all other general fund revenues available for all operations. The city says this forces all other general fund departments, such as parks, community development or economic development to operate with the remaining 77.2% of remaining general fund revenue.
City officials says “there’s no doubt” Broken Arrow will need to increase its authorized police force beyond the current 157 officers. The city has hired a consultant to study and report on Broken Arrow’s future needs, but funding will need to be identified to implement the findings. The city has also been hiring firefighters at a faster rate than the attrition rate to keep up with retirements.
“Because of the ever-increasing costs of collective bargaining and maintaining a high-level of service the community has come to expect, we must find an additional dedicated funding source for public safety,” Spurgeon said.
Another issue is the cost of replacing police and fire vehicles, which totals about $3 million a year. While the departments have adequate fund balances, if money is taken out of those balances for vehicles it could deplete the remaining pot of money that is needed for operations.
Assistant City Manager Ken Schwab said fleet maintenance crews are working “almost around the clock” to get the most out of the city’s current fleet.
Spurgeon says the city may need to consider implementing a vehicle replacement fee, which he is done in some other cities through utility bills.
No more LifeRide opt-outs
Another change in this year’s budget comes with LifeRide, a program the city implemented in 2015 that allows those who agree to a $5.45 monthly fee to cover all out-of-pocket costs when an emergency ambulance service/care is needed.
Any household resident needing emergency medical services is not billed for any out-of-pocket costs, and the city accepts the customer’s insurance payment as payment in full.
The initial fee was established at $5.45 per month because it was the same rate EMSA charged Tulsa residents, but the amount charged has not changed since LifeRide’s inception. An increasing number of the city’s 40,537 utility customers have opted out of participating or never opt in.
As a result of the opt-outs and the monthly rate not being adjusted, expenditures for LifeRide far exceed revenues by several million dollars annually. The city said it researched what is done in other Oklahoma cities and found it can charge all customers monthly for this service.
Spurgeon recommended the opt-out be removed and the City Council agreed. The City Council also agreed to increase the monthly fee by the current monthly fee by $1 to $6.45 and going forward, and the change can be reviewed each year.