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Recruitment and retention of qualified police officers and firefighters remains a challenge. Area
cities continue to increase public safety compensation in an effort to attract truly qualified
candidates, which makes it necessary to budget for an increase in public safety salaries in
order to remain competitive in the public safety job market. Beyond the typical salary
increases, area departments, including NRH, have initiated lateral recruitment programs that
recruit experienced staff and pay them as if they have been with that agency for a number of
years. This is a major departure from traditional practices where public safety employees
would have to start at the bottom of the pay scale if they moved to a different department.
Poaching of experienced employees is now much more common than in prior years.

Medical expenses from the City’s Self Insurance Fund have levelled off this year. It is expected
that changes to the health care plan along with changes to the retiree health insurance plan
will help this trend continue; however, medical costs continue to increase and we have to
consider the percent of medical inflation when considering expenses from the self-insurance
fund. In order to insure premium costs are keeping up with medical cost inflation, an
increase of 8% is included in both the city’s share of this cost as well as the employee’s
share. This results in an increase in transfers from the General Fund to the Self Insurance
Fund.

The City’s Debt Service obligation will increase this year as we plan to issue $3 million in
bonds to fund the replacement of the city’s 20 year old enterprise wide computer
system with a modern enterprise resource planning system, $4.5 million for street projects
and $1.3 million for major capital equipment.

General Fund Service Additions

Street Maintenance

Street conditions continue to be a hot topic in our citizen’s survey and on social
media. Between 2008 and 2015 we were contributing around $800,000 per year
toward street maintenance. In 2015 we increased the amount to $1,000,000 per year;
however, we are seeing that this amount is not adequate to keep up with the preventive
maintenance needs of our aging streets. In addition, the last bond program that included
streets was in 2003. A Capital Improvement Program is needed, but we also need to
seriously consider increasing our maintenance effort to keep pace with our existing needs
to prevent further deterioration. If we fail to keep pace with our current preventive
maintenance needs, the price tag for restoring our streets to an acceptable condition will
be cost prohibitive and deterioration will accelerate.

Each year we assess the condition of all of our streets. Based on the most recent
condition assessment it was determined that we would need $3,400,000 per year in street
maintenance funds to properly extend the life of our streets to their full capacity. While
this type of a budget increase is not practical, we have included the issuance of
$1,575,000 in short-term bonds to
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