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Home My WebLink About06-05-17 City Commission Packet Materials - A2. FY18 Budget Work Session - Special Revenue Funds Part 1 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Assistant City Manager Dennis Taylor, Interim City Manager SUBJECT: Fiscal Year 2018 (FY18) Budget Work Session Special Revenue Funds MEETING DATE: June 5, 2017 AGENDA ITEM TYPE: Action Item – Budget Work Session RECOMMENDATION: Listen to staff presentations, ask questions, give direction, as you see fit. BACKGROUND: Attached are a budget worksheets and other materials regarding a portion of our Special Revenue Funds. This information has been prepared to assist us in developing the City’s Final Budget, and is based on what is contained in the FY18 City Manager’s Recommended Budget, available at http://www.bozeman.net/government/finance/budget-and-financial-reports Based on feedback during this work session, and other work sessions held this spring, we intend to prepare the Final Budget resolution. The hearing for adoption of the Final Budget is scheduled for June 26, 2017. SPECIAL REVENUE FUNDS: We will be reviewing the details of the following four funds tonight: 1. Community Development Fund 2. Building Inspection Fund 3. Tree Maintenance Fund (Forestry) 4. Community Housing Fund – Workforce Housing The following Special Revenue Funds will be the subject of another Work Session on June 19th: 5. Street Maintenance Fund 6. Arterial and Collector District Fund 330 7. Street Impact Fee Fund FISCAL EFFECTS: Although the Final Budget adoption has far-reaching fiscal effects, there are no immediate fiscal effects as a result of this work session. The funds discussed tonight have proposed budgets with changes in rates and fees that will affect all property owners and system users, including a portion of property taxes related to Workforce Housing. The Worksheets outline these effects in detail. As presented, the City Manager’s Recommended Budget is projected to have the following effects on the typical City resident, with areas affected by tonight’s Special Revenue Funds highlighted in yellow. Typical Resident: 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 Attachments: FY18 Special Revenue Budget Worksheets On File: City Manager’s Recommended Budget for FY18 Report compiled on: May 30, 2017 331 Community Development Fund – FY18 Budget Worksheet The Community Development Department can be found in the General Government section of the City Manager’s Recommended Budget document. Approximately four years ago, the “Planning Department” was re-named the “Community Development Department”, and we now refer to the Planning Fund as the Community Development Fund. (The other arm of Community Development operations is the Building Inspection division, with its funding segregated in the Building Inspection Fund.) Expenditures: Proposed expenditures in the Community Development Fund budget this year include a significant increase in recommended Consultants and Professional Services. Personnel costs include all existing authorized positions, including the full costs for the Planner III position that was approved for mid-year hire in FY17. Community Development Fund ‐ Expenditures FY14 Actual FY15 Actual FY16 Actual FY17 Approved FY18 Recommended Personnel $670,789 $626,090 $681,909 $888,931 $971,694 Operations $56,939 $160,061 $335,345 $362,941 $423,669 Capital $8,916 $0 $0 $0 $110,000 Total $736,644 $786,151 $1,017,254 $1,251,872 $1,705,363 Excluding personnel costs, a total Community Development Fund operating budget of $533,669 is proposed. Attached to this document you will find a break-down of the separate areas of the operating $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 FY14 Actual FY15 Actual FY16 Actual FY17 Approved FY18 Recommended Community Development Fund Expenditures Personnel Operations Capital 332 budget and a chart representing the same. As you can see, the largest areas of the operating & capital budget are:  Consultants and Professional Services - $315,860 total, including o Community Plan Part II $100,000 o Community Plan Data Collection (Current RFP) $75,000 o Neighborhood Conservation Overlay District Update $50,000 o City/County Regional Planning Efforts $20,000 o Development Review $35,000 o Historic Building Inventory $12,000 o Historic Program Outreach $3,000 o Business License Processing – Temp/Mailing $6,000 o Public Outreach – Print/Video $4,000 o Proof Reading Services $4,860  Capital Requests – Suggested use of funds for furniture and minor modifications to the main lobby area in the Professional Building, where customers are served by the Community Development Department. o Phase 2 Building Remodel Architecture Design $10,000 o Main Floor Lobby Construction and Demo $50,000 o Main Floor Lobby Modular Furniture $50,000 Revenues: The Planning Fund is supported by a number of different revenue sources. In the past, the General Fund provided significant support to the Community Development Fund. Over the years, as planning activity fluctuates, application fees and the amount of General Fund transfer change to fund the operation see chart below. During the recession, the General Fund Transfer exceeded the amount of application revenues. This year, the only transfer amount into the Community Development fund is for Health Insurance premiums coming from the Permissive Medical Levy. The property tax is a fixed 2-mill statutory authorization; it increases as our mill value increases. The FY18 Recommended Budget assumes a continuation of the current levels of planning application activity (subdivision, site plan, CUP, COA, PUD, etc.) Current activity is expected to exceed our current budget estimate by 4%. For FY18, we estimate these application fee revenues will be $746,000, or ~$62,000/month. Application Fees 61%Transfers 10% Taxes 15% State/Grants 9% Other 5% FY18 Community Development Fund ‐Revenues 333 Community Development Fund ‐ Revenues FY14 Actual FY15 Actual FY16 Actual FY17 Approved FY18 Recommended Application Fees $416,017 $416,017 $461,150 $719,899 $745,925 Transfers 184,033 184,033 164,228 209,162 124,284 Taxes 170,051 170,051 178,125 176,591 185,830 State/Grants 106,060 106,060 109,225 108,160 108,700 Other 16,070 16,070 16,000 50,694 59,400 Total $892,231 $892,231 $722,550 $1,264,506 $1,224,139 Restricted Revenue & Cash: Since approximately 2007, there has been a portion of Application Revenue that is moved to restricted cash accounts, under adopted fee schedules. This means that it is not generally available as working capital to pay for day-to-day operations, but is accumulated to be used to fund projects fitting with the restriction. Fees are restricted for: Long Range Planning, Conservation Overlay, Entryway Update, and Technology. Description Restricted Cash Balance – Estimated April 2016 FY17 Revenues ‐ Estimated April 2017 FY17 Estimated Expenditures Beginning Working Capital FY18 Conservation Overlay $198,286 $29,810 ($50,000) $178,096 Entryway Update *no fee 2015 $61,712 $0 $61,712 Long Range Planning $179,309 $66,420 ($107,000) $138,729 Technology Fee *new 2015 $17,733 $27,102 $44,835 Total s $457,040 $123,332 ($157,000) $423,372 As written, the Recommended Budget does not anticipate any of the expenditures being paid from restricted cash. However, if the Commission chose to do so, items could be funded from these accounts. In FY17, the Community Plan ($100,000) and personnel costs from a mid-year Planner III were paid from Long Range Planning. The Neighborhood Conservation Overlay District Update was approved for payment from the Conservation Overlay restricted cash. Budget Surplus or Deficit: The Recommended Budget results in a deficit of $281,000 – and can be supported by cash on hand in the Community Development Fund. If the Commission would like us to use Restricted Cash to pay for some eligible expenses again, this will reduce the deficit that would come from operating cash. Items described in the Consulting Services budget above, as well as some costs for the Long Range Planner - Planner III position are potential items to consider funding from Restricted Cash amounts. 334 Community Development Fund FY13 Actual FY14 Actual FY15 Actual FY16 Actual FY17 Budget FY18 CM Rec Revenues $952,831 $892,231 $836,318 $1,306,210 $1,264,506 $1,224,139 Expenditures 743,535 736,645 786,153 1,017,254 1,285,872 1,505,363 Surplus/(Deficit) $209,296 $155,586 $50,165 $288,956 ($21,366) ($281,224) 335 Date: 5/30/2017Community Development Fund Operating & Capital BudgetFY18 CM RECOMMENDED BUDGETDESCRIPTIONFY18 CMRECOMMENDED BUDGETVEH MAINT FUND ALLOCATION $359.00 BOOKS & REFERENCE MTRLS $500.00 SUBSCRIPTIONS $500.00 VEHICLE SUPPLIES $500.00 CLOTHING & UNIFORMS $700.00 GASOLINE & OIL $800.00 REPAIR & MAINT- EQUIPMENT $2,500.00 TELEPHONE $2,500.00 GENERAL $3,000.00 INTERNET $4,000.00 DUES & CERTIFICATIONS $6,000.00 POSTAGE $6,700.00 OUT-OF-STATE $8,500.00 IN-STATE $9,500.00 COMPUTERS & SERVERS < $5K $10,000.00 COMPUTER SUPPLIES $10,100.00 OFFICE SUPPLIES $10,250.00 ADVERTISING $14,400.00 MAINTENANCE CONTRACTS $17,000.00 BLD:BUILDINGS+BLDG DESIGN $110,000.00 CONSULTANTS & PROF SERV $315,860.00 TOTAL $533,669.00 0 100,000 200,000 300,000 400,000VEH MAINT FUNDALLOCATIONBOOKS & REFERENCEMTRLSSUBSCRIPTIONSVEHICLE SUPPLIESCLOTHING & UNIFORMSGASOLINE & OILREPAIR & MAINT-EQUIPMENTTELEPHONEGENERALINTERNETDUES & CERTIFICATIONSPOSTAGEOUT-OF-STATEIN-STATECOMPUTERS & SERVERS <$5KCOMPUTER SUPPLIESOFFICE SUPPLIESADVERTISINGMAINTENANCE CONTRACTSBLD:BUILDINGS+BLDGDESIGNCONSULTANTS & PROFSERVCommunity Development FundFY18 CM Rec Budget - Operations & Capital336 Building Inspection Fund – FY18 Budget Worksheet The Building Inspection Division information is included in the Public Safety section of the City Manager’s Recommended Budget document. Revenues: This budget estimate continues to be one of the most difficult to make, because the majority of department revenues come from the spring and summer months, and fluctuate according to actual construction plans. We are anticipating that Fiscal Year 2018 (FY18) will be similar to what we have experienced to date in FY17. The City Manager’s (CM) Recommended Budget estimates Building Inspection revenue of $1,769,150 or $147,400/month. Thru April of this fiscal year, monthly revenues have averaged $138,300/month, with our busiest quarter (April – June) underway. Expenditures: The Recommended Budget includes all of the existing department personnel plus the addition of a Building Inspector II position. Total estimated FY18 expenditures are $2,086,952. Excluding personnel costs (which is the largest area of the budget), a total Building Inspection Fund operating and capital budget of $520,995 is proposed. Attached on the following pages, you will find a break-down of the separate areas of the operating budget, along with a chart representing the same. Some of the largest areas of the budget are:  Capital: CIP BI01 replacement of a staff vehicle – $32,500  In-State Travel/Training - $40,000 for Inspection certification, training for recent code changes and community training.  Consulting & Professional - $106,000 for increased use of 3rd party plan reviewers for structural and expedited plan review, development of standardized solar/photovoltaic plan, completion of Building Division fee study, and revision of brochure materials. $‐ $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 Q4 Est Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1 FY17FY16FY15FY14FY13 Average of Monthly Building Fees 337  Payment of the City’s Administrative Overhead Allocation - $116,132 Budget Surplus or Deficit: Building Inspection Fund FY14 Budget FY15 Budget FY16 Actual FY17 Approved FY18 Recommended Revenues $1,160,700 $1,539,623 $1,843,206 $1,685,248 $1,769,150 Expenditures $1,228,610 $1,460,836 $1,640,228 $1,978,444 $2,086,952 Surplus/(Deficit) ($67,910) $78,787 $202,978 ($293,196) ($317,802) The resulting deficit budget would draw down Building Inspection Fund cash reserve. For a number of years, we have adopted deficit budgets but have not actually operated at a deficit. Greater than estimated revenues and lower expenses, mostly due to vacant positions, have yielded increases to cash reserves. For instance, FY16’s Approved Budget was for a deficit of ($321,044), however at the end of that fiscal year, the Fund actually saw a surplus of $202,978. Given where we are in FY17, it is again likely that we will have revenues that exceed expenditures. However, if the FY17 budget is fully realized, we will leave an estimated Building Inspection Fund cash reserve of $1,065,000 at the end of FY17; in compliance with the state’s maximum of one-year’s worth of expenditures ($2.1 Million.) In years past, the desired level of Building Inspection Fund reserve was discussed at length. We were targeting to develop a budget that would result in a reserve no less than 50% of annual expenditures. By State law, we can have no more than 100% of annual expenditures in reserve in the fund at the end of the year. This proposed budget is estimated to leave the FY18 ending reserve amount at 50% of FY18 annual expenditures. If FY17 operations yield a positive cash position, we will add to the reserve amount. 338 Date: 5/31/2017FY18 Building Inspection Fund Operating & Capital BudgetDESCRIPTIONFY18 CMRECOMMENDED BUDGETVEH MAINT FUND ALLOCATION$505.00 SUBSCRIPTIONS$850.00 SHIPPING & HANDLING$1,500.00 POSTAGE$2,000.00 DUES & CERTIFICATIONS$3,000.00 CLOTHING & UNIFORMS$4,500.00 GOODS PURCHSD FOR RESALE$4,500.00 REPAIR & MAINT- BUILDINGS$6,000.00 SMALL EQUIPMENT AND TOOLS$6,500.00 BOOKS & REFERENCE MTRLS$8,500.00 GENERAL$11,000.00 ADVERTISING$12,000.00 TELEPHONE$12,000.00 OFFICE SUPPLIES$15,000.00 REPAIR & MAINT- EQUIPMENT$16,500.00 COMPUTERS & SERVERS < $5K$18,000.00 GASOLINE AND OIL$20,000.00 COMPUTER SUPPLIES$30,500.00 VEH:AUTOS + LIGHT TRUCKS$32,500.00 IN-STATE$40,000.00 MAINTENANCE CONTRACTS$53,508.00 CONSULTANTS & PROF SERV$106,000.00 ADMINISTRATIVE OVERHEAD$116,132.00 TOTAL $520,995.00 040,00080,000130,000VEH MAINT FUND ALLOCATIONSUBSCRIPTIONSSHIPPING & HANDLINGPOSTAGEDUES & CERTIFICATIONSCLOTHING & UNIFORMSGOODS PURCHSD FOR RESALEREPAIR & MAINT- BUILDINGSSMALL EQUIPMENT AND TOOLSBOOKS & REFERENCE MTRLSGENERALADVERTISINGTELEPHONEOFFICE SUPPLIESREPAIR & MAINT- EQUIPMENTCOMPUTERS & SERVERS < $5KGASOLINE AND OILCOMPUTER SUPPLIESVEH:AUTOS + LIGHT TRUCKSIN-STATEMAINTENANCE CONTRACTSCONSULTANTS & PROF SERVADMINISTRATIVE OVERHEADBuilding Inspection FundFY18 Operating & Capital Budget339 Tree Maintenance Fund – FY18 Budget Worksheet The Tree Maintenance Fund is the single source of support for the Forestry Department. Their Department information can be found in the Public Welfare section of the City Manager’s Recommended Budget document. In developing the budget for the Tree Maintenance Fund, we also customarily look at a 5-Year Projection of expenditures and revenues. This projection is on the following page. Revenue The vast majority of revenue in the Tree Maintenance Fund comes from annual Tree Maintenance District special assessments. Revenue increases are needed to fund the costs of the recommendations of the Urban Forestry Master Plan. Last year, during budget work sessions we discussed a three year plan to fund the recommendations of the Master Plan and a $100,000 surplus to address a future Emerald Ash Borer incident. That plan was a three-year implementation of rate increases (15% each year,) the hiring of the Forestry Program Manager, and increases to contracted services for tree trimming. This will be the second year of implementation. The Recommended Budget includes a 15% increase for Tree Maintenance Assessments. Total Revenues are estimated to be: $692,073. One of the recommendations in the Plan is to have adequate funds available to address an Emerald Ash Borer incident. Growing and maintaining the Fund’s reserves to a level that provides for this reserve in addition to a 45 day operating reserve is our recommended strategy. With the increased assessment this year, and a similar increase next year, we anticipate we could be at that level before FY20. Expenditures Expenditures total $717,219 with $57,000 of capital projects begin funded. Also attached is a more detailed list and chart of the Fund’s budget for operating expenditures. Personnel: $420,950. This includes currently approved staff. No additional positions are proposed. Assessments 99% Penalty and Interest 0% Interest Earnings 0% Sale of Cost‐ Share‐Trees 1% Grants/State Shared 0% Tree Maintenance Fund Revenue 340 Operations: $228,987 o Gas & Oil - $12,900 o General Supplies - $72,265 o Includes: 175 Cost share trees - $26,250, and 225 Tree replacement vouchers - $22,500 o Contracted Services: Increase of contracted tree maintenance services from $30,000 in FY17 to $60,000 in FY18 Capital: $57,000 o FOR10 – Stump Grinder $24,000 o FOR12 – Vehicle for Forestry Program Manager $33,000 Tree Maintenance District - 5 year Projection FY2018 Budget Preparation Adopted Recommended Projected Projected Projected Projected Proposed Rate Increase 15% 15% 15% 2% 2% 2% Estimated Growth in Assessable Sq Ftg 2% 2% 2% 2% 2% 2% FY17 FY18 FY19 FY20 FY21 FY21 Beginning Fund Balance - Projected 243,700 117,164 102,300 108,638 203,330 338,053 Estimated Revenues: Assessments (FY17 Actual Billed) 581,733 682,373 800,423 832,760 866,404 901,407 Penalty and Interest 1,350 1,350 1,350 1,350 1,350 1,350 Interest Earnings 1,600 1,600 3,000 3,000 3,000 3,000 Sale of Cost-Share-Trees 6,000 6,000 6,000 6,000 6,000 6,000 Grants/State Shared 750 Total Estimated Revenues: 590,683 692,073 810,773 843,110 876,754 911,757 Proposed Expenditures: Existing Personnel 390,966 420,950 433,579 446,586 459,983 473,783 Operations -- 191,253 228,987 265,857 273,832 282,047 290,509 Capital 135,000 57,000 105,000 28,000 - - Total Proposed Expenditures: 717,219 706,937 804,435 748,418 742,031 764,292 Ending Fund Balance - Projected 117,164 102,300 108,638 203,330 338,053 485,518 Annual Assessments: Small Lot, 5,000 sq ft. 13.03 14.98 17.23 17.58 17.93 18.29 Average Lot, 7,500 sq ft. 19.55 22.48 25.85 26.37 26.90 27.44 Large Lot, 10,000 sq ft. 26.07 29.98 34.48 35.17 35.87 36.59 Extra Large, 15,000 sq ft 39.10 44.96 51.71 52.74 53.80 54.87 Reserve Policy: Working Capital for Emerald Ash Incidents 100,000 100,000 100,000 100,000 100,000 100,000 45 Days Pers & Ops 71,780 80,129 86,232 88,819 91,483 94,228 171,780 180,129 186,232 188,819 191,483 194,228 341 Date: 5/31/2017 FY18 Tree Maintenance Fund Operating & Capital Budget DESCRIPTION FY18 CMRECOMMENDED BUDGET MEDICAL SERVICES $200.00 SHIPPING & HANDLING $200.00 SUBSCRIPTIONS $200.00 NATURAL GAS $300.00 BOOKS & REFERENCE MTRLS $500.00 ELECTRICITY $500.00 REPAIR & MAINT - OTHER $500.00 DUES & CERTIFICATIONS $1,000.00 REPAIR & MAINT- BUILDINGS $1,000.00 TELEPHONE $1,550.00 CLOTHING & UNIFORMS $2,000.00 OFFICE SUPPLIES $2,000.00 PERSONAL COMPUTERS $2,000.00 ROAD SUPPLIES $2,000.00 VEHICLE SUPPLIES $2,000.00 COMPUTER SUPPLIES $2,100.00 CONSULTANTS & PROF SERV $2,200.00 CHEMICALS $2,500.00 INSURANCE $3,000.00 INTERNET $3,600.00 IN-STATE $4,000.00 SMALL EQUIPMENT AND TOOLS $4,500.00 REPAIR & MAINT- EQUIPMENT $6,000.00 ADVERTISING $8,000.00 POSTAGE $8,250.00 OUT-OF-STATE $9,000.00 GASOLINE AND OIL $12,900.00 VEH MAINT FUND ALLOCATION $13,822.00 M&E:MACH+EQUIP/HEAVY TRUK $24,000.00 VEH:AUTOS + LIGHT TRUCKS $33,000.00 MAINTENANCE CONTRACTS $60,900.00 GENERAL $72,265.00 TOTAL $285,987.00 0 40,000 80,000 100,000 MEDICAL SERVICES SHIPPING & HANDLING SUBSCRIPTIONS NATURAL GAS BOOKS & REFERENCEMTRLS ELECTRICITY REPAIR & MAINT - OTHER DUES & CERTIFICATIONS REPAIR & MAINT-BUILDINGS TELEPHONE CLOTHING & UNIFORMS OFFICE SUPPLIES PERSONAL COMPUTERS ROAD SUPPLIES VEHICLE SUPPLIES COMPUTER SUPPLIES CONSULTANTS & PROFSERV CHEMICALS INSURANCE INTERNET IN-STATE SMALL EQUIPMENT ANDTOOLS REPAIR & MAINT-EQUIPMENT ADVERTISING POSTAGE OUT-OF-STATE GASOLINE AND OIL VEH MAINT FUNDALLOCATION M&E:MACH+EQUIP/HEAVYTRUK VEH:AUTOS + LIGHTTRUCKS MAINTENANCECONTRACTS GENERAL Tree Maintenance Fund FY18 Operating and Capital Budget 342 Community Housing Fund – FY18 Budget Worksheet Community Housing Fund (Fund 120) is included in the Community Services Expenditure Information in the Public Welfare section of the budget document. The Community Housing Fund holds revenues from some previous housing loans that are slowly coming back to the city, and has also been where we have deposited and recorded the activity of the City’s tax dollars dedicated to Workforce/Affordable Housing. Revenue & Expenditures The CM Recommended Budget includes tax revenue of 3 mills (estimated at $278,745) for Workforce Housing efforts. The proposed expenditures include our annual amounts for Road to Home administration (HRDC request) $40,000 and the HRDC Administration contract $14,400. We also recommend including $70,000 to be used for administration of the affordable housing program in the coming fiscal year. Ending Balance If all of FY17 Approved Budget is spent (which is highly unlikely), the FY 18 budget would end with an estimated $345,647 in cash on hand. If only approximately $85,000 of FY17 Approved Budget is spent (seen as more likely), the FY18 budget would end with an additional $202,400 in cash for an ending balance of $548,047 in cash on hand. 343 Workforce Housing Funding Within the Community Housing Fund Approved Recommended 0.5 Mills 1 Mill 3 Mills 3 Mills 3 Mills FY14 FY15 FY16 FY17 FY17 Beginning Balance 336,926 347,769 21,858 188,966 178,802 Revenues: General Fund Transfer 56,248 Dedication of Tax Revenue 42,819 88,470 241,158 264,886 278,745 Interest Earnings 2,555 2,958 2,850 2,850 3,000 Loan Principal Repayments 5,000 682 9,500 9,500 9,500 Total Estimated Revenues: 50,374 148,358 253,508 277,236 291,245 Expenditures: Road to Home - Administration 40,000 40,000 40,000 40,000 40,000 HRDC - West Edge Project Downpayment Assistance ‐ 160,000 HRDC Administration of Revolving Loan Fund 14,400 14,400 14,400 Workforce Housing Ordinance Development/Update 50,000 Support for Low Income Housing Projects (offset Impact Fees)24,269 Remainder of CAHAB Support not contained in Fund 121 (to total $14,400/yr)3,407 GMD - Project Assistance 200,000 Administrative Costs 8,000 70,000 Affordable Housing Action Plan Update 10,000 Impact Fees For Home Purchase 100,000 Impact Fees For Rental Housing 32,000 40,000 Emergency Shelter 25,000 Down Payment Assistance 50,000 Total Proposed Expenditures: 40,000 477,676 86,400 287,400 124,400 Ending Balance 347,769 21,858 188,966 178,802 345,647 344