Fiscal Year 2023 Budget Documents

Fiscal Year 2023 Budget Presentation

Fiscal Year 2023 Budget Overview Presentation (PDF)
Watch the City Manager's Presentation at the March 1, 2022 City Council Meeting
Budget Book
March 30, 2022 Budget Summary Memo

Department Budgets

Budget Overview Memo (March 3, 2022) - This memo from the City Manager details key changes in each department's budget.
March 3, 2022 Budget Committee Meeting (Presentations from Assessing, Communications, Police, Finance, and Technology)
March 7, 2022 Budget Committee Meeting (Presentations from City Clerk, Human Resources, Code Enforcement & Emergency Management, Public Works, Fire, and Planning & Economic Development)
March 22, 2022 Budget Committee Meeting (Presentations on Non-General Fund Budgets, including Wastewater Treatment Plant and Recreation budgets)

School Budget

School Budget Presentation (PDF)
Watch the Superintendent's Presentation at the March 15, 2022 City Council Meeting

Municipal and Social Service Budgets

Watch Presentations from Municipal and Social Services at the March 17, 2022 Budget Committee Meeting
Requests and Informational Materials from Social and Municipal Service Organizations (PDF)

Budget Presentation Overview

Budget History

A City's budget is an expression of the community's values. Up to 2010, those values centered on community affordability, citizen service delivery, and economic development in the industrial parks. With the Great Recession and State of Maine raids on local revenues in order to balance the state budget, communities moved into economic survival mode.

By 2012, the economic development focus shifted to addressing MERC’s impact on the community. The 2016-2020 budgets focused further on economic development in the downtown. In 2020-2022, community building and engagement were prioritized when building the budget.

Ten years ago, the community’s situation was different. Any development was considered good, whereas today, only good projects are positive development. The City had more staff even though there was less activity in the community, and employee expectations have increased. Citizen expectations have also changed and expanded over time.

FY23 Budget Overview

The Fiscal Year 2023 Budget looks to transform operations to meet new citizen expectations while maintaining core services and being frugal in the process.

Other key factors that will impact this year's budget include:

Inflation Impacts: Higher costs of essentials such as gasoline, diesel and biosolids disposal from the Wastewater Treatment Plant as well as other operating costs.
Costs associated with attracting and retaining employees in the current job market: The City must provide competitive wages, comprehensive benefits and be a preferred employer in order to attract and retain talent.
New Debts and Leases: Payments on the Emergency Radio Lease approved in November 2020 ($4.5 million total cost over 8 years, $550,808 payment) and bonds authorized by voters in 2020 ($12.5 million over 20 years, $625,000 principal payment) have a combined $0.45 impact on the tax rate.
Desirability & Affordability: Property values are now increasing so quickly in Biddeford that despite a 10.5% adjustment to residential property values in Fiscal Year 2022, forecasts show that an additional 18% adjustment of values will be needed in Fiscal Year 2023 in order to meet the State's recommendation to certify at 100% of value.
State Property Tax Support: Revenue Sharing is set to increase for Fiscal Year 2023, bringing a projected increase in revenues.
Financial Goals have been reached: With a Fund Balance of 12.5%, there is money available for potential capital projects and one-time expenditures
Existing Positions as New Drivers to the Budget: Four firefighter positions were funded off-budget for half of Fiscal Year 2022. Additionally, full funding for the Police Department’s opioid outreach position and two mental health outreach positions is included in the budget this year.
Capital Funding: The budget accounts for $250,000 increase in capital funding.
Municipal and Social Services Requests: These organizations requested an additional $386,000 in funding this year. The submitted budget reflects a $206,000 increase in funding.

FY23 Capital Improvement Plan Presentation

The City Manager presented the FY23 Capital Improvement Plan recommendations to the City Council on February 15, 2022. This plan is not a funding document, so it will need to be integrated with the Fiscal Year 2023 budget once the budget is adopted.

Based on historical data, the City has $210 million in capital assets, and the City Council is directly responsible for over $152 million of those assets. This number is likely significantly larger based on the economic conditions today.

In order to properly update and maintain buildings, vehicles and infrastructure on a regular schedule, an estimated $5,158,203 would need to be invested each year. Using that estimate, there is a gap of about $54.5 million over the past 13 years between the amount of funding that was appropriated due to budget pressures and the amount needed to keep up with maintenance.

The City Manager recommends that the goal for annual appropriations for capital spending should be $2.5 million. This would account for roughly $1 million for roads, $75,000 for sidewalks, about $725,000 for vehicle purchases, and $700,000 for other infrastructure items.

This year the City is expected to reach the goal of having an unassigned fund balance that totals at least 12.5% of the total budget. The City Manager recommends using the excess funding over the 12.5% to be used towards capital projects. Even with reaching this goal, the owner of the median home in the community is paying less in taxes today than they were eight years ago.

The City Manager suggests phasing in the recommended $2.5 million appropriation for capital funding over three years ($250,000 each year). This year, that would mean a recommended $2 million appropriation from the budget. There are also $2.7 million in ‘excess’ fund balance and nearly $2 million in unrestricted American Rescue Plan Funds to be considered to fund capital projects. The City Manager recommends that some of this funding is used to cover expected higher bids for existing approved projects.

School Budget Presentation

The Superintendent presented the FY 2023 School Budget to the Council on March 15, 2022.

Valuation Impacts

Property valuations impact state subsidies significantly. As Southern Maine home prices have surged over the past several years and Biddeford’s valuation rises with downtown revitalization, our valuation growth is at about 7% while the State average growth is at about 5%. Because of this, Biddeford schools have lost some state subsidies in this budget. The Superintendent expressed caution about future subsidy loss if our growth continues to outpace that of other Maine communities.

This year, the local share for education costs is projected at 59.12% with the state share set at 40.88%. The presentation covered the formulas for school subsidy calculations in detail.

Overall Budget

Key cost drivers to the budget for FY23 include:

Staffing costs, including employee steps and wages and a projected 10% increase in health insurance costs
Revolving Renovations Loan funding
Utility cost increases

The increase locally for K-12 education is about $638,000. Adult Education budget is up $21,000. In total, a 2.9% increase in funding is projected for this year.