Muskogee city councilors reviewed publicly for the first time this week a proposed budget for fiscal year 2022 that includes a 5.48% increase for the general fund.
City Manager Mike Miller said the budget proposed for the fiscal year that begins July 1 is designed to transform "strategic initiatives into an action plan." Strategic initiatives prioritized by city councilors include streets and infrastructure, public image, economic development, housing and tourism.
The overall budget totaling more than $80.03 million — up 20.56%, or $13.56 million, from the $66.38 million proposed as the pandemic began to set in a year ago — consists of several funds. The proposed general fund of $36.84 million is the largest of the eight funds — 71.4% of the general fund would go toward salary and benefits for 432 budgeted employees.
Miller highlighted the $10 million budget set aside in the general fund for street maintenance and improvements during fiscal year 2022. It would be the second consecutive year for a $10 million streets budget, an amount made possible by a voter-approved sales tax for capital improvements and matching grant from the City of Muskogee Foundation.
The budget also includes $2.6 million for ongoing improvements to the city's water and sewer infrastructure, and an increased allocation from hotel and motel tax revenue to bolster tourism efforts. The proposed budget also includes funds that can be used to match grants that might be secured.
Miller said he expects sales tax revenue during the coming year will remain flat following 12 months of "unusually high" deposits fueled by federal spending. Sales tax revenue is the city's "largest single revenue source" available for the general fund.
Despite flat revenue projections and anticipated increase in expenditures of about $1 million, Miller said the city is able to budget for the future because of sound fiscal policies. He credited councilors for a policy adopted three years ago that nearly doubled the city's emergency reserve funds while navigating three federal disasters.
"Our friends at Oklahoma Mutual Assurance Group ... were here last month and told us we have the best reserve policy in the state," Miller said. "This is something other cities look at and are trying to do, something you've already put in place."
Before implementation of the policy, the city had emergency reserves that totaled about 10% of its projected annual expenses. That has grown since fiscal year 2018 to nearly 20% two years later, but slipped the past year to about $6.58 million — 17.2% of projected expenditures.
"That was after three federal disasters, and FEMA hasn't reimbursed us for hardly anything yet," Miller said. "We feel like we will bounce back — we have used that money to fund COVID-19 and some real world disasters and we are still paying out on those."
A second public hearing is scheduled when city councilors meet at 5:30 p.m. Monday during their regular meeting. The proposed budget may be viewed online at https://tinyurl.com/yx9weztm.