Proposed Highland city budget shows a deficit. City leaders explain why to community

While the proposed Highland city budget shows a deficit, city leaders say it is primarily due to capital projects rolled over from previous years.

The 2022-23 budget was presented to the Highland City Council on Monday, March 21, covering required operations and addressing deferred maintenance and infrastructure needs, according to city manager Chris Conrad.

Total revenues for 2022 are anticipate at $45.9 million, a 3% increase over 2021. Proposed expenditures are $48.1 million, which includes construction projects and deferred maintenance.

“Taking into account the impact of inflation on our operations, we continue to be conservative in the stewardship of the taxpayer’s dollar, and we continually evaluate our operations to keep the city on a sustainable path regarding revenue vs. expenses,” Conrad said. “Our staff have proven adept at finding solutions that realize efficiencies in operations without causing impact on the citizens or the services we provide.”

For example, Conrad said the city has two dump trucks and a capacitor bank that were budgeted for this year, but won’t actually be delivered or replaced until the next budget year. The money goes into the reserves this year, and then is paid out when the trucks are purchased next year, which appears as a deficit.

In all, the budget includes a 3% increase in operations and maintenance, although the total expenses are 5% lower than last year.

“We did our best to anticipate any other increases in operating costs due to inflation,” Conrad said.

One of those increases: Fuel. The rising cost of gas impacts several departments, but especially the police department. In one example, police have traditionally left squad cars with motor running when at the station, but given the cost of gas, that practice will be ending, city leaders said.

Among the highlights of the new budget:

• Police and fire departments have moved into the new Public Safety Building. The police department is working on its 911 consolidation, upgrading in-car computers and adding body cameras ahead of the new state regulations.
• Public works will continue replacing aging water and sewer systems, upgrading meters and repairing pavements, curbs and sidewalks throughout the city. Center Street will undergo a complete reconstruction this year.
• Community development will continue its project evaluating derelict properties and structures that require demolition. The department also is encouraging redevelopment in expanding the facade improvement program, which launched within the last year.
• Property values in Highland increased 2.88% in 2020, the most recent year available. City leaders anticipate another 2.5% increase this year.
• After the drops in sales tax revenue during the pandemic, Highland’s sales tax revenue is now expected to increase by 12%.

The budget will go to the city council on April 4 and will be available in its entirety on the city website Wednesday, April 6.