FY23 FULL BUDGET REPORT ADOPTED

The proposed FY 2023 operating budget concentrates on the following strategies:

Existing Program Focus: Existing programs to be maintained and strengthened to support ongoing workplan goals and initiatives. This limits growth in the existing programs and any new initiatives other than as outlined in the budget message. Replacement Planning: An updated vehicle replacement strategy will allow us to evaluate vehicle replacement more holistically and distribute annual costs more evenly across a five-year planning window. Staff has also worked to restructure equipment replacement plans (especially public safety) and incorporate future replacement plans more effectively into a budget forecast, including changing technology needs. Facility Repairs and Improvements: The growth of the Town’s footprint inherently increases annual operating costs internally, and for service delivery to community stakeholders. Safety initiatives continue to be prioritized. While major projects move towards being shovel ready for activation, staff has also identified small impactful community improvement projects for inclusion in the budget. Long-Range Planning Focus: The FY 2023 capital investment plan (CIP) budget focuses on carrying out bond projects and select other consensus driven priorities, as well as meeting stormwater mandates. Operationally, work continues on both affordable housing and UDO update projects that have been delayed by vendor availability and project cost, but that are now getting underway and must be completed to provide the further guidance requested by Town Council for these important community objectives. Large ProgramArea Support: In the past several years, the Town has added several major program areas to its core focus, including the Smart Shuttle, Smart Cities and Sustainability. Each of these programs requires significant ongoing financial commitment as a part of a base budget strategy influencing recurring annual cost Remaining Market Competitive: I am grateful for Town Council’s vocal support and ongoing commitment to our Town staff and being able to focus on recruitment and retention of the best employees, which I fundamentally believe we have. The proposed budget includes recommendations for a pay plan adjustment for recruiting new employees, market rate adjustment for some positions to maintain salary competitiveness, and an across-the-board market rate adjustment and performance merit plan for all full-time and regular 30-hour employees. Pay rate adjustments for part-time employees are also recommended. Future Planning: In addition tomaintaining a strong fund balance, allocations of funds toward several capital reserves and strategic management debt capacity remain an integral part of the proposed budget and CIP creating a fundable program to realize tangible desired community outcomes At the time of drafting the FY 2022 budget message last year, the final rules for use of ARPA funds had not been finalized. Since then, guidance for eligible uses has been formally established. The final rule now provides maximum flexibility in the use of the Town’s entire ARPA a llocation through the revenue replacement option. ARPA resources may be used for the provision of government services. Compliance with federal purchasing and contracting rules is required; Town Council considered and approved some financial policies associated with ARPA spending in April. The Town also submitted its first annual ARPA

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