GOSHEN — Mayor Jeremy Stutsman urged Goshen City Council to pass a funded budget rather than a balanced budget as they looked at a $47.9 million proposal for 2020.
The city’s proposed budget for next year includes $22.5 million in the general fund, $3.6 million in the motor vehicle highway fund, $2.7 million in economic development income tax and $2.5 million for the Parks and Recreation Department. It also includes $525,529 for the newly created Environmental Resilience Department.
The total represents an increase of about $3 million from the current budget. Council was scheduled to give the budget a first reading Tuesday and is expected to give final approval on Oct. 22.
In a letter to council members introducing the budget, Stutsman attributed most of the increase to a 2.5 percent raise for city staff and the rising cost of health insurance.
He also proposed in the letter using a large chunk of money to push road maintenance and capital projects forward. He said it would draw from the city’s cash balances, which are currently enough to cover city operations for over six months.
The reserve funds are at the point where city leaders can invest in the city rather than continuing to build up savings, he said.
“I would not be suggesting that we move forward with a funded budget if we hadn’t prepared for this over the last several years,” Stutsman wrote. “If you recall, I have committed each year that there will come a point when it is appropriate to spend more and other times where we will need to pull back on spending.”
He noted that the city is expected to spend only 95 percent of what would be appropriated for 2020, something that has become a longstanding practice. He estimated that just under $1.5 million will be contributed to the cash balance at the end of this year.
Stutsman also noted that in 2019 and again in 2020, city officials chose not to appropriate $500,000 from the Rainy Day Fund to help cover possible income shortfalls. It’s an annual appropriation they started making in 2014 but never needed to touch.
The city’s net assessed value is also increasing while losses due to property tax caps are decreasing, according to Stutsman.
Currently at $1.19 billion, the NAV in 2020 is expected to finally surpass highs that Goshen last saw in 2007, he said. He remarked that the city weathered the years since then with much lower cash balances than now.
“If we grow these balances too large, I fear we are crossing the other side of the line of proper fiscal management,” he wrote. “Knowing the number of projects we have on our lists, it is time to build our community instead of our savings accounts. There will be a day in Goshen when this trend turns around again. When that happens, we will have healthy reserve funds and we can revert back to a savings mode.”