Fenton staff present preliminary 2025 budget; sales-tax dip and $2M transfer flagged

Finance Officer Tammy presented the Board of Aldermen with a preliminary 2025 budget that projects $8.5 million in revenues, $6.2 million in expenditures and a general-fund balance of about $12 million. Using year-to-date 2024 receipts and conservative assumptions, Tammy recommended a $2,000,000 transfer from the general fund to the capital projects fund and estimated a positive change in fund balance of $241,000 under those assumptions.

Tammy told aldermen she based utility and intergovernmental revenues on a nine-month average projected to 12 months, left general sales tax at $5,000,000 and noted that adult-use marijuana tax revenue — expected to begin in January 2025 — is not fully reflected in traditional sales-tax lines because only one retail store currently exists. She said proposition/new-money sales-tax receipts have been strong this year and she projected $600,000 for that line.

Board members questioned a roughly $200,000 gap on sales-tax receipts when comparing 2025 projections to prior-year levels on an apples-to-apples basis excluding marijuana revenue. Tammy said she could not point to a single cause but suggested the 2023 year may have been anomalous; aldermen proposed several possible drivers including pandemic-related shifts in spending, changes in big-box retail and product mix effects tied to federal incentives for some durable goods.

Tammy reported interest income rose notably in 2024 and she conservatively projected about 4% on investments for 2025, while noting some current holdings yield higher rates. For wages and benefits she modeled a fully staffed organization (except for court and public works), applied a 4% general wage increase and estimated benefit cost increases (she referenced a 10% health-insurance increase for modeling purposes and uplift for dental premiums).

The budget includes reallocated salary costs to the parks and stormwater funds (specified percentages for the city administrator, clerk, public-works director and select technicians) per prior committee approval. Tammy also disclosed she budgeted new police-contract figures and a Riverchase operations contract amount of $1,400,000, noting discussions with contractors and the police department could change allocations.

The aldermen identified several line-item concerns — including a marked rise in administration services largely driven by residential trash and legal-fee increases — and Tammy committed to review and adjust specific entries. The committee set a follow-up review of the 2025 budget at a December committee meeting and invited members to submit questions by email ahead of that session.