HURON — On Sept. 25, the Huron City Commission approved the second reading of Ordinance 2256-30-244, thus approving the proposed annual budget for the city of Huron for the 2024 fiscal year.
While Huron city Finance Director Paullyn Carey put together a straightforward set of spreadsheets to present to the commission and to any who chose to look it up on the city’s online meeting portal, those unfamiliar with what is going on in the city may be confused by the numbers and column headings without context.
The overall appropriation of $52,622,628 is up 14% from the 2023 budget of $46,265,115. The increase includes the new Solid Waste Transfer Station and the downtown projects that both start in 2024.
The Huron city appropriation is primarily allocated to four areas - general fund expenses, special revenue funds, capital projects, and enterprise funds.
The general fund expenses total $18,374,918. Within that fund are staff costs, snow removal and street maintenance, police and fire, library costs, and general operations of the city.
Special revenue funds include the Parks and Recreation and Kunhart Field staffing and costs, Central Park/Splash Central costs, Huron Community Campus, E-911 dispatch, and Huron Event Center, among others. Third penny and second penny taxes are part of this fund. The total budgeted for those funds is $8,772,924.
Capital projects is budgeted at $17,996,219. The revenues into this area are from second penny funds as well as grant funds and loans to help with capital projects of the city.
The enterprise funds include funds that generate revenue for the city, including water and sewer and solid waste.
There are budget lines for the airport and Broadland Creek golf course in the enterprise funds as well.
Overall budget for enterprise funds are $23,248,376.
In 2024, a new Solid Waste transfer station is included in the budget at a cost of $9.2 million on top of some large water and sewer projects.
Within the enterprise funds, there is a 4.5% increase for water and sewer rates that has been approved already. A resolution in December will apply the same level increase in rates for solid waste, which is included in the 2024 budget.
When reviewing where costs have gone up, staffing is a significant driver, with work compensation budgeting three percent higher, it is noteworthy this is a decrease overall, after the city saw an increase the previous budget cycle.
Property and liability insurance averages 10% of property value and health insurance costs for the city come in at 30% of staff salary in budgeting, though the exact renewal rates have not yet been received by the city. The city’s insurance committee is working on this.
City employees will receive a 6% cost of living increase as well as a step in pay. The commission approved a salary study that could also change those numbers going forward, now that the study is completed.
Beyond the funds where fees are earned through services provided (water, sewer, solid waste, golf course, etc.), how does the city bring in money to pay for these items?
Municipalities in South Dakota make use of multiple taxes. The first penny and second penny taxes (after the State of S.D.’s 4.2%) apply to all sales within the city, and, though the receipts for each have defined uses that each can be applied to, they are often grouped together as municipal general sales tax. The 2024 budget includes a projected 6% increase in both, which would be an additional $439,000 in revenue.
The third penny tax is often referred to as the “bed, board, and booze” tax, as it is applied to lodging, food, and alcohol sales within the city. This is also projected to increase by 6% in 2024, forecast to be an additional $66,000.
Finally, the city receives a share of property taxes. Those taxes are projected to increase approximately $245,000 in 2024.
Other funding is found through federal and state grants to fund equipment purchases and larger projects done by the city, within certain parameters of state and federal grant programs.
Finally, Carey noted that the total debt the city is carrying applies to two large projects, $10,687,034 for the sewer project and $1,071,333 for the water project. Overall, the city holds $11,758,367 in debt, with payments that totaled $755,145 in 2023 and will total $677,617 in the 2024 budget.
Planning for the annual budget begins in the mid-summer through departments proposing projects and budgets and submitting them to the capital asset committee. That committee works through the various requests and comes to a number for general fund budgets.
The commission meets each Monday evening for roughly a month to put together the budget before approving a preliminary appropriation for the city. That is then presented in a commission meeting two times for public comment before being approved the last meeting of September each year.