Understanding Public Finance
Budget & Taxes
Where does the City’s money come from?
City revenue comes from a combination of sources including property taxes, state shared revenue, utility fees, impact fees, grants, franchise fees, and service charges. Some of these revenues are restricted and can only be used for specific purposes.
What do my property taxes pay for?
Property taxes primarily support General Fund services such as:
- Administration
- Planning and zoning
- Parks
- Streets (partial funding)
- General government services
Property taxes do not fund utility systems like water or sewer.
Does the City keep all of my property taxes?
No. Property taxes are divided among multiple taxing districts such as the County, school district, fire district, and other special districts. The City receives only a portion of the total property tax bill.
Why do property taxes increase?
Property taxes may increase due to:
- New construction and growth
- Voter-approved levies
- Changes in property values
- The annual allowable increase under Idaho law
The City does not control property assessments.
Utilities & Rates
Why are utility rates separate from taxes?
Utility systems operate as enterprise funds and are funded by user fees. This means customers pay for the service they use, and those funds must remain within that utility system.
Why do water or sewer rates increase?
Rates may increase to:
- Maintain aging infrastructure
- Expand capacity for growth
- Meet regulatory requirements
- Fund capital improvements
- Cover operating cost increases
Rates are set to ensure long-term sustainability.
Do utilities make a profit?
No. Utility rates are set to recover the cost of providing service, including operations, maintenance, reserves, and capital improvements.
Growth & Development
Doesn’t new development pay for itself?
Growth helps fund infrastructure through impact fees and new tax revenue, but it typically does not cover all costs. Existing and future users often share infrastructure costs.
Impact Fees
What are impact fees?
Impact fees are one-time charges on new development used to help fund infrastructure needed to serve growth, such as roads, water, and sewer improvements.
Why can’t impact fees be used for other things?
Impact fees are legally restricted and must be used for growth-related infrastructure. They cannot be used for operations, maintenance, or existing deficiencies.
Funds & Reserves
Why can’t the City move money between funds?
Many funds are legally restricted and must be used only for specific purposes. Examples include utility funds, impact fees, and grant funding.
Reserves
Why does the City maintain reserves?
Reserves help fund:
- Emergencies
- Equipment replacement
- Infrastructure repairs
- Economic downturns
- Cash flow timing
Maintaining reserves helps avoid sudden tax or rate increases.
The City shows a large fund balance. Why not spend it?
Fund balance does not always represent available money. Some amounts are restricted, committed for projects, or held as contingency reserves.
Debt & Projects
Why does the City borrow money for projects?
Large infrastructure projects can cost millions of dollars. Financing spreads the cost over time so current and future users share the expense.
How is debt repaid?
Debt may be repaid using:
- Utility rates
- Property taxes
- Impact fees
- Special assessments
The repayment source depends on the project.
Why can’t the City pay cash for everything?
Paying cash for large projects could deplete reserves or require large rate increases. Financing allows projects to proceed while maintaining financial stability.
Budget Process
How is the City budget created?
The City prepares a draft budget, holds a public hearing, receives public input, and then adopts the final budget annually.
Can the public provide input?
Yes. The public may attend budget hearings, council meetings, or contact staff directly during the budget process.
What is a balanced budget?
A balanced budget means estimated revenues meet or exceed planned expenditures for the fiscal year.
Transparency
Where can I view the City budget?
The adopted budget is available on the City website along with financial reports and supporting documents.
How often are financial reports provided?
Financial reports are typically prepared monthly, with an annual audit completed each year.
Why is the City investing in wastewater infrastructure?
Infrastructure investments help support growth, meet regulatory requirements, and ensure long-term service reliability.
How does growth affect the City budget?
Growth increases demand for infrastructure and services. The City plans for growth through capital planning, impact fees, and long-term budgeting.
Why are large infrastructure projects planned years in advance?
Major projects require planning, funding, design, and permitting. Multi-year planning helps reduce costs and coordinate improvements.
Victor is a family-friendly community, respectful of faces new and old, that values a high quality of life, inclusivity, economic vitality, outdoor recreation, and the preservation of the surrounding ecosystem. Victor is committed to creating a vibrant downtown and lively neighborhoods that are well connected to the city center and one another.
The City of Victor’s annual budget is developed to support the community’s long-term vision as identified in the Comprehensive Plan . The budget prioritizes infrastructure, responsible growth, and maintaining community character while ensuring long-term financial sustainability.
The city has prepared a budget in brief for FY2027, including the line items for each fund. The budget in brief can be accessed at this link: TO BE AVAILABLE JULY 2026. For FY26 Budget please see the Budget Book
Victor continues to experience growth and development. Infrastructure investment is a major focus of the City’s financial planning. The budget helps ensure infrastructure and services keep pace with growth by funding:
- Water System Capacity
- Wastewater infrastructure
- Road improvements
- Pathways and connectivity
- Planning and development services
- Capital improvement planning
This approach helps maintain service levels while supporting future development.
City funding supports a variety of public services aligned with community priorities.
General Government
- Administration
- Finance
- Planning and zoning
- Development review
- City events
Public Works
- Streets and road maintenance
- Snow removal
- Pathways
- Stormwater
- Parks maintenance
Utilities
- Water system operations
- Sewer system operations
- Infrastructure maintenance
These services are funded through a combination of taxes, fees, user fees, grants and other revenue sources.
City revenue comes from a variety of sources:
- Property taxes
- State shared revenue (for example liquor taxes and sales tax revenue sharing)
- User fees (water, sewer, and irrigation)
- Permit and License fees
- Impact fees
- Grants
- Interest earnings
- Service charges and reimbursements
Some revenues are restricted and must be used for specific purposes. For example, water revenue can only be used for water infrastructure, operations, and maintenance.
City expenditures generally fall into the following categories:
- Personnel (salaries and benefits)
- Operations (utilities, supplies, maintenance)
- Professional services (engineering, legal, IT)
- Capital projects (roads, equipment, buildings)
- Debt payments
- Transfers between funds
Personnel costs are often the largest portion of a city’s operating budget. These costs may include:
- Salaries and wages
- Benefits including health insurance and retirement
- Payroll taxes
- Training and certifications
Staffing levels are evaluated each year based on service needs, growth, and available funding.
One-time funding includes:
- Grants
- Impact fees
- Land sales
- Transfers from reserves
Ongoing funding includes:
- Property taxes
- Utility fees
- Franchise fees
- State shared revenue
One-time funding cannot sustain ongoing services. It is also important for the City Council to consider the ongoing maintenance cost when approving grant funding or project funding, as the ongoing costs can be significant.
Cities use fund accounting, which separates money into different funds based on how it can legally be used.
Key concepts:
- Each fund has a specific purpose
- Money in one fund cannot usually be used for another purpose
- The City may have many funds, but only one General Fund (property taxes)
- Each fund is reviewed separately and accounted for separately
Some funds are legally restricted and must be used only for specific purposes.
Examples:
- Water fees → water system
- Sewer fees → sewer system
- Impact fees → growth infrastructure, outlined in the capital improvement plan
- Grants → specific project, outlined in the grant application
- Debt proceeds → financed project
The City may use debt to fund large infrastructure projects such as:
- Water systems
- Wastewater treatment
- Roads
- Equipment
- Buildings
Debt is repaid over time using taxes, rates, or assessments.
The City maintains a multi-year Capital Improvement Plan (CIP) to identify and prioritize infrastructure needs.
The CIP may include:
- Roads
- Pathways
- Parks
- Equipment replacement
- Facilities
The City considers long-term financial impacts including:
- Growth and development
- Infrastructure replacement
- Utility expansion
- Capital needs
- Debt capacity
- Economic conditions
The City adopts a balanced budget each year.
This means:
- Revenues meet or exceed expenditures
- One-time funds used for one-time costs
- Reserves used strategically
- Financial stability maintained
Each year the City:
- Prepares revenue estimates (May-June)
- Develops a draft budget (June)
- Publishes public notice (July-August)
- Holds a public hearing (August)
- Adopts the final budget (August)
The City follows financial policies addressing:
- Reserve targets
- Budget practices
- Debt management
- Capital planning
- Use of one-time funds
Financial information is available through:
- Annual budget
- Monthly financial reports
- Annual audit
- Council meeting materials
- Public hearings
MAYOR-COUNCIL GOVERNMENT- There are two forms of municipal government in Idaho: Mayor-Council, which is the form adopted by Victor, and the Council-Manager form, which few cities follow. The Mayor-Council form of government is characterized by a clear separation of powers and a strong executive branch led by an elected mayor. The mayor serves as both the political leader and the chief executive officer of the city. They possess significant authority and are directly accountable to the public.
Under this model, the mayor has the power to appoint department heads, make key administrative decisions, and propose the city's budget. They play a central role in policy-making, setting the city's agenda, and implementing initiatives. The mayor often represents the city's interests in regional, state, and national affairs.
The city council, consisting of elected representatives, serves as a legislative body that enacts laws, approves budgets, and provides oversight. While the mayor may have veto power, the council typically can override vetoes through a prescribed process
•A city may only raise its tax levy by 3% every year (Idaho Code 63-802)
•County collects and distributes property tax every month
•FY2025 Levy Rate is .000897902
If you are interested in understanding Idaho property tax, watch this video provided by Idaho Association of Counties. Teton County, ID
Each year, the City of Victor prepares its annual budget following Idaho Code § 50-1002. City staff and the Council estimate costs for services including roads, utilities, parks, and public safety, and estimate revenue from taxes and other sources.
The draft budget includes data from the past two years and is shared with the public through a newspaper notice and a public hearing. After gathering input, the Council finalizes and adopts the budget, ensuring it reflects community priorities and stays transparent. Citizens are invited to comment, submit letters, or otherwise engage in the budget process. Then, each month, a report is posted showing the actual revenues and expenditures in relation to the budget adoption. If any adjustments are necessary throughout the year, the city can do a budget amendment which follows the same process as the budget adoption.
Between FY2024 and FY2026, the City of Victor successfully secured over $2.9 million in project funding through state and federal sources. This achievement reflects the City Council’s ongoing commitment to fiscal responsibility and long-term financial health. Despite the complex and time-intensive nature of the grant process, the City continues to prioritize identifying and pursuing external funding opportunities. These efforts allow Victor to invest in significant public improvements while reducing the financial impact on local taxpayers. Victor has been able to build bathrooms, pave roads, repair bridges, and construct pathways with a fraction of the burden on tax payers.
FY25 Accomplishments:
- Sherman Park Workforce Housing Project
- Missing Link "Final Leg"
- Agate Paving Completion
- Elm Street Pathway Bid
- Winter Festival Tree Lighting
- Arbor Day Celebration
- 4th of July Parade
- Four local artists' open houses
- Passage of new Area of Impact and Building Code & Design Standards Updates
- CBDG Grant Awarded for public bathrooms in city park
FY26 Accomplishments:
- City Park Bathrooms
- Skatepark in Sherman Park
- JPA with Teton Recreation District
- Wastewater Treatment Plant PER
- Missing Link "Final Leg"
- Trail Creek Mitigation Restoration
- Code Updates
The existing reserve balances are strong, with the last decade focused on building equipment reserves, following depreciation schedules, and focusing on the overall financial health of the city funds.
The audited numbers are less detailed than the City Actuals because the city actuals include specific policies and procedures as put in place by the city, where the audited numbers only include GASB defined assignments. For example, contingency is a city-defined policy that designates 50% of the operating budget of the funds to be set aside for emergency situations where the revenue may fall short or may stop accruing. Equipment reserve is the amount of money that the city puts aside each year to account for replacement of existing assets, based on the useful life of each asset and the purchase price of the asset, more information on equipment can be found on the depreciation schedule.
Committed and Assigned Projects have two separate meanings. Committed are for projects in the city’s policies and plans, that may be amended with city action. Assigned projects are specific projects that are outlined by either the payor of the revenue, or the fund itself. For example, water reserves from hook up fees, must be used for projects in the water infrastructure. These monies, as defined by statute, cannot be used for projects in the sewer fund, or the general fund.
The City may use debt to fund large infrastructure projects such as:
- Water systems
- Wastewater treatment
- Roads
- Equipment
- Buildings
Debt is repaid over time using taxes, rates, or assessments. Today, the city’s debt service is in a very strong position, with only 4 outstanding balances, equaling approximately $1.9M, with four loans. Near the end of FY26, Victor will pay off the JetVac loan and in the coming two years, two more debts will be fully paid off, leaving only the DEQ water loan bonds to be paid in 2032.