OGDEN — Ogden officials continue to be pleasantly surprised with the city’s financial situation during the ongoing COVID-19 pandemic.
Now halfway finished with Fiscal Year 2021, Ogden’s Management Services Director Mara Brown said the city expects its general fund revenue to exceed budgeted amounts by nearly $3.2 million — which means that by the time the fiscal year is over, city coffers will be quite a bit fuller than originally anticipated.
When the city built the 2021 budget during the initial weeks of the pandemic, the process was driven by what Mayor Mike Caldwell called an “extremely conservative approach,” due to predicted tax revenue losses.
“When we put this budget together, we were just barely into the pandemic,” Brown said. “So some of the revenue numbers ... are still a reflection of the conservative budget approach we took.”
In the 2021 budget, Brown said, the city programmed a 17% reduction in sales tax revenue from the prior year — a figure she said was recommended by the Utah League of Cities and Towns and some other third-party financial experts. The city was also expecting a decrease in licensing and permit revenue, but Brown said, thus far, neither of those losses have occurred.
The city expects tax revenue to exceed budgeted projections by $3.34 million during FY 2021. The city’s fiscal year runs from July 1 through June 30 and the Ogden City Council approved Ogden’s FY 2021 budget in late June. The city relies heavily on sales and property taxes to fill its general fund. According to city planning documents, property taxes make up about 26% of the city’s general fund operating budget. The city’s other main funding stream, sales tax, also accounts for 26% of the general fund income.
Ogden Chief Administrative Officer Mark Johnson said while some industries, like hospitality and food service, have been hit extremely hard during the pandemic, others have done surprisingly well. He said significant increases in spending at grocery stores, for home improvement purposes and even car sales have helped the city’s tax revenue bottom line stay relatively healthy.
Brown said the city is also expecting to exceed revenue projections for licensing and permits by about $205,000, though service charge revenue will likely be under budget projections by some $350,000.
“There’s kind of that cautious optimism,” Brown said. “I think (that) is a good way to describe where we are financially.”
Because of the city’s conservative, pandemic-centered approach to the 2021 budget, customary merit and cost of living pay increases for city employees and step-pay increases for public safety personnel were not implemented this year. Caldwell and others in the administration have said they would revisit that aspect of the budget frequently and make adjustments when warranted.
While Brown said Ogden continues to deal with salaries that lag behind comparably sized cities, Johnson said a pay-related proposal is in the works. While he didn’t want to divulge specifics, he said the proposal should come before the Ogden City Council in the next few weeks.