HomeMy WebLinkAbout06-05-17 City Commission Packet Materials - A1. FY18 City Manager's Recommended Budget
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Dennis M. Taylor, Interim City Manager
Anna Rosenberry, Assistant City Manager
SUBJECT: Presentation of the FY2017-2018 (FY18) City Manager’s Recommended
Budget
MEETING DATE: June 5, 2017
AGENDA ITEM TYPE: Presentation/Discussion
RECOMMENDATION: Listen to presentation, ask questions, and provide comments.
BACKGROUND: This presentation will outline the FY2017-2018 (FY18) City Manager’s
(CM) Recommended Budget, on a “large scale” view. We will be getting into further details
over the next weeks, with Final Adoption scheduled for June 26, 2017. Following are the
tentatively schedule dates of budget discussions, along with their topics:
June 5: City Manager’s Recommended Budget, overall
Special Revenue Funds (Part I)
June 12: Tax Increment District and Business Improvement District Work-plans
and Budgets, received on Consent Agenda
General Fund June 19: Enterprise Funds
Special Revenue Funds (Part II)
June 26: Final Budget Hearing, Appropriation Resolution Hearing
Attached to this memo is a copy of the Budget Message, which is included in the online
document itself (it is attached separately to the spiral-bound document.) It is a general summary
of the budget and its implications for citizens and property owners.
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The entire “FY2017-2018 City Manager’s Recommended Budget” document is available online
at http://www.bozeman.net/government/finance/budget-and-financial-reports. Copies are also
available to the public at the Bozeman Library and City Clerk’s office.
UNRESOLVED ISSUES: Because this is the beginning of the formal budget process, there
are many unresolved issues. We will be identifying and discussing those during this presentation
and the budget workshops and hearings in June.
ALTERNATIVES: If the Commission would like to make suggestions for changes to the
planned Budget Work Sessions, please do so tonight.
FISCAL EFFECTS: This presentation has no immediate fiscal effects. The adoption of
the final budget in June will have far-reaching fiscal effects. The Recommended Budget has the
following impacts on the Typical Residential Property:
Typical Residential Property:
Annual Increase
Recommended Budget
Street Maintenance Assessments $ 28.78
Arterial Street Assessment $ 27.57
Forestry Assessment $ 2.93
Property Taxes $ -
Water Services $ 10.12
Sewer Services $ 11.90
Storm Water Services $ -
Annual Increase $ 81.30
Monthly Increase $6.78
The details surrounding these increases will be discussed at length through the budget-adoption
process.
Report compiled on: May 30, 2017
Document on File: City Manager’s Recommended Budget for Fiscal Year 2017-2018
Attached Documents: Budget Message (excerpt from Budget Document)
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June 5, 2017
Bozeman City Commission:
I am pleased to present to you the City Manager’s Recommended Budget for Fiscal
Year 2017-2018 (FY18). This budget represents the thoughtful work of dozens of
people in developing the spending plan for our organization for the coming fiscal year.
Overview:
Bozeman is a vital, growing and changing city. In my brief tenure with the city of
Bozeman, I have been focused on bringing forward a budget that permits the city to
live within our means, while at the same time attempts to help the city organization
cope with our community’s rapid growth and change.
Significant changes during the past 12 months
1. Continued Growth – Our community’s most recent evidence of continued
growth includes the US Census data showing an estimated population
increase of 4.3% this year, on top of the 4.2% increase for last year. We see
strong building permit activity and increased traffic counts and congestion on
City streets. So much of our budget recommendation is made in response to
the prolonged growth that Bozeman continues to experience.
2. New Fuel Tax Dollars – As a result of the legislature’s adoption of House Bill
273, the City will receive approximately $266,000 in additional state fuel tax
funding in FY18. This amount is expected to increase to nearly $700,000 in
FY19. We are recommend a reducing the amount of Arterial & Collector
District assessment increase because of this new funding source.
3. Marcy’s Law Implementation – In order to respond to the requirements of the
Marcy’s Law provisions for victims of crimes, we recommend that a half-time
position in the City Attorney’s office be increased to full-time, support be given
for an increase in the County’s Victim’s Services programs, and to proceed with
software implementations within our City Attorney’s office that were approved
in FY17.
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4. Strategic Plan - With the Commission’s Strategic Planning effort underway
but not completed, we are attempting to get ahead of a few key Strategic Plan
priorities by including a full-time Communications Coordinator position
beginning in January 2018.
Staffing Level Changes
Attempting to maintain our current levels of service will require additional staff this
year in numerous departments.
General Fund Positions - Recommended additions in the General Fund include:
Department/Division Position Full-Time Equivalents
Municipal Court Veterans Court Administrator –
Pending the Grant Award
1.00
City Attorney’s Office 0.5 Administrative Assistant
to 1.0 Legal Assistant I
0.50
Facilities Facilities Service Worker 1.00
City Manager’s Office Communications Coordinator 0.5 FTE (Full Time, Jan 2018)
Total 3.0 FTE
Enterprise & Special Revenue Fund Positions - We are recommending the addition
of the following positions in the Enterprise and Special Revenue Funds:
Department/Division Position Full-Time Equivalents
Building Inspection Building Inspector I or II 1.00
Solid Waste Solid Waste Worker (Driver) 1.00
Stormwater Stormwater Specialist 1.00
Streets Streets ‐ City Service Workers 2.00
Vehicle Maintenance Vehicle Maintenance 1.00
Water Plant Water Plant Operator 1.00
Total 7.0 FTE
The General Fund:
The City’s General Fund supports the majority of administration, public safety and
public welfare operations. It’s most significant source of revenue comes from local
property taxes. As a result, the General Fund’s operating budget and fund balance
are critically important to the financial health of the city.
This year’s General Fund budget has $31.8 Million in expenditures, in the following
areas:
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Department/Division General Fund Amount
Commission $ 277,348
City Manager 1,216,952
Courts 943,811
Attorney 1,246,948
Finance (prior Admin Services) 1,065,951
Facilities 1,455,651
Information Technology 978,222
Human Resources 413,390
Police (incl. State Ret.) 9,242,015
Fire (incl. State Ret.) 6,188,814
Public Services/Streets 122,331
Cemetery 721,904
Parks 2,028,480
Library 1,993,372
Recreation 1,811,680
Economic Development 422,464
Sustainability 169,912
Non-Departmental 1,473,567
TOTAL Expenditures $31,772,812
Commission
1%
City Manager
4%
Courts
3%
Attorney
4%
Finance (prior
Admin Svcs)
3%
Facilities
5%Information
Technology
3%Human Resources
1%
Police (incl. State
Ret.)
29%
Fire (incl. State
Ret.)
19%
Public
Services/Streets
0%
Cemetery
2%
Parks
6%
Library
6%
Recreation
6%
Other
5%Sustainability
1%
Non‐Departmental
5%
FY18 Recommended ‐General Fund Budget
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As shown in the above graph, Police and Fire services combined comprise 48% ($15.4
Million) of the General Fund’s spending. The next largest departments are grouped
together, each spending roughly $1 - $2 Million and each comprising 3-6% of the
budget: Parks, Recreation, Library, Facilities Maintenance, City Manager, City
Attorney and Finance. Nine other departments/areas comprise the balance of
General Fund Expenditures.
General Fund Undesignated Fund Balance:
The City’s charter requires an established minimum level of General Fund
Undesignated Fund Balance in accordance with the Government Finance Officers’
Association (GFOA) Best Practices. GFOA’s Best Practice Recommendation was
adopted and our required minimum reserve balance is 16 2/3% of budgeted revenues.
This budget exceeds the required minimum reserve of approximately $5,060,000
(16.67%) at the end of Fiscal Year 2018.
Residential City Property Taxes for FY16, FY17, and FY18
In total, the Recommended Budget would levy an estimated 205.30 mills on all
taxable property within the City limits. This represents no increase over last year.
To achieve no increase in the levy we propose:
Calculation of maximum mill levy with estimated increase in inflation factor,
and estimate of newly taxable property increase of 4%.
Use of estimated cash carry-over from FY17 that can be used to forego an
increase to the levy.
Assessed Market Value Estimated Taxable Value
FY15 City Tax Levy = 188.76 mills
FY16 City Tax Levy = 210.16 mills
FY17 City Tax Levy = 205.3 mills
FY18 Estimated City Tax Levy = 205.3 mills
Median Home ~$240,000
$3,237 $678 $729 $665 $665
$200,000 $2,700 $831 $593 $554 $554
$300,000 $4,050 $1,246 $889 $831 $831
* Tax Rates and Median Value changed due to reappraisal in FY17
The median home “assessed market value” represents the value on the tax roll for a
home within the Bozeman city limits. Median simply means that half of the homes
in the city have a higher value and half have a lower value. Each year the Median
Home value changes slightly. This year is a re-appraisal year for the State
Department of Revenue; the value of a median home could change again with new
data from the reappraisal. Based on the information we have today, the median
home will pay $3.23 in City property taxes for every mill levied in Fiscal Year 2018.
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Residents living in the median home are estimated $665 in annual property taxes to
the City. Again, this represents no increase in property taxes.
General Taxes - Cost per Mill
For the coming fiscal year, we are estimating a 4% increase in the value of taxable
property across the city. Taking into account the 1.5% reduction in values we
experienced in FY16, taxable values for the City have an average increase of only
1.7% per year for the past 5 years. However, given the continued strong building
permit activity and the new two-year reappraisal cycle, we believe this estimate is
appropriate.
Citywide Street and Tree Maintenance Assessments
City property owners pay an annual street maintenance, arterial street, and tree
assessment based on the square footage of the lot they own. These assessments are
the major funding for Street Maintenance, Arterial Street capital, and Forestry
Divisions.
The recommended budget is based on a 17% increase in the Street Maintenance
assessment, resulting in an annual assessment of $198.02 for the average sized lot.
The majority of this increase is attributed to the least year of phase-in of an added $1
Million in annual pavement maintenance.
The new Arterial and Collector Street Assessment District is recommended to proceed
with the original plan: to phase-in assessments that will total $2 Million annually in
construction on arterial and collector streets over 3 years. For FY18 (third year), we
are recommending a 63% increase in the assessment from last year. The original
plan was for an approximate 90% increase, but the new fuel tax approved by the
legislature will bring in money to lessen the increase for property owners. For the
average sized residential lot, the annual assessment would be $69.11 for the year.
The Tree Maintenance District is in need of a 15% increase to continue to implement
the Urban Forestry Management Plan. There was no increase to this assessment in
FY13-15. There was actually a small decrease to the assessment in FY15, based on
revised assessment methods adopted in July 2014. For the average sized residential
lot, the annual assessment would be $22.48 for the year.
Combined, property owners of an average sized city lot would pay $289.62 in annual
assessments. This is an increase over the previous year of $58.43, or $4.86 per month.
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Lot Size FY16 Approved 10% Streets & 2% Trees, with Arterial Street District
FY17 Approved 15% Streets & 15% Trees, 90% Arterial Street District
FY18 Recommended 17% Streets & 15% Trees, 63% Arterial Street District
Small= 5,000 sq ft. Streets - $98.10 Streets - $112.81 Streets - $131.99
Trees - $11.33 Trees - $13.03 Trees - $14.98
New! Arterial Streets -
$14.36
Arterial Streets - $28.27 Arterial Streets - $46.64
Average = 7,500 sq ft. Streets - $147.17 Streets - $169.24 Streets - $198.02
Trees - $17.00 Trees - $19.55 Trees - $22.48
New! Arterials Streets – $21.54 Arterials Streets – $42.40 Arterials Streets – $69.11
Large = 10,000 sq ft. Streets - $196.23 Streets - $225.66 Streets - $264.02
Trees - $22.67 Trees - $28.34 Trees - $28.34
New! Arterial Streets – $28.73 Arterial Streets – $56.54 Arterial Streets – $93.29
Utility Rates
Water & Sewer: City property owners are by and large required to use the City’s
water and sewer treatment systems. Two years ago, we updated our five year funding
models for both Water and Sewer Rates. The Commission approved a 2.5% increase
in Water rates and a 3% increase in sewer rates, for each of FY16 and FY17. We had
planned to be underway with updated rate studies for both Water & Wastewater
systems, but have delayed the project until the arrival of a Finance Director. This
year, we recommend the Commission adopt a two-year rate resolution with
Wastewater increases of 2.0% each year, and Water increases of 2.0% each year.
Stormwater: The Stormwater rates were adopted in April 2015. The new base
charges took effect in May 2015 and the variable charges and credits took effect in
December 2015, based on impervious area and existing infrastructure. We do not
recommend a rate increase this year.
In Total: A residential customer utilizing 10 hundred cubic feet (HCF) of water each
month will see an estimated combined monthly increase for these services of
$1.83/month.
Average Residential Customer
ApprovedFY16 Monthly Bill 2.5% Increase Water 3% Increase Sewer Stormwater, Revised
ApprovedFY17 Monthly Bill 2.5% Increase Water 3% Increase Sewer 0% Stormwater
Recommended FY18 Monthly Bill 2% Increase Water 2% Increase Sewer 0% Stormwater
Water $41.15 per month $42.18 per month $43.02 per month
Sewer $48.13 per month $49.57 per month $50.56 per month
Stormwater $ 5.91 per month $ 5.91 per month $ 5.91 per month
Total $95.19 per month $97.66 per month $99.49 per month
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In Conclusion
The Recommended Budget was developed to continue current level operations in the
growing and changing community. A typical residential property owner will likely
see taxes and assessments increase by $81.30 for the year, or $6.78 per month.
Typical Residential Property:
Annual Increase
Recommended Budget
Street Maintenance Assessments $ 28.78
Arterial Street Assessment $ 27.57
Forestry Assessment $ 2.93
Property Taxes $ ‐
Water Services $ 10.12
Sewer Services $ 11.90
Storm Water Services $ ‐
Annual Increase $ 81.30
Monthly Increase $6.78
We are thankful to the Commission, community members and staff who participated
in the many processes that resulted in this Recommended Budget.
Change can be difficult, uncomfortable and challenging. Working together, we have
consistently found innovative ways to maintain services and invest in our community
in fiscally responsible ways. We are a resilient, enterprising and creative community.
This budget we propose for your consideration is an achievable plan to provide
efficient and effective services and to achieve the Commission’s vision and priorities
for the City of Bozeman.
Respectfully,
Dennis M.Taylor, City Manager
Anna Rosenberry, Assistant City Manager
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