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Home My WebLink About06-19-17 City Commission Packet Materials - A3. FY18 Budget Work Session - Special Revenue Funds, Part II 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, Part II MEETING DATE: June 19, 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. Some of the Special Revenues Funds were the subject of a budget work session on June 6th. 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. Street Maintenance Fund 2. Arterial and Collector District Fund 3. 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. 126 The funds discussed tonight have proposed budgets with changes in rates and fees that will affect all property owners and system users. 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: June 12, 2017 127 The Streets Department information begins on page 151 of the City Manager’s Recommended Budget document. This section contains all of the city’s spending on street projects (except items included in TIF Districts); spending occurs in numerous funds including Street Maintenance Fund, Arterial & Collector District Fund, and the Street Impact Fee Fund. Street Maintenance Fund – FY18 Budget Worksheet Revenue 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 third year phase-in of an added $1 Million in annual pavement maintenance. Fiscal Year 2018 is the last year of the phased-in maintenance increases. On the following page you will find a “5-Year Projection” of revenues and expenditures for the Street Maintenance Fund. We have utilized these long-range financial projections to give us an indication of what the current program costs, with small inflationary increases, and approved capital projects that will require in assessment increases. Expenditures The following 5-Year Projection also describes the expenditures for Street Maintenance. Personnel Costs: $1,563,254  We recommend adding two Street Maintenance Workers (2.0 FTE) in order to maintain service levels for street maintenance, including winter snow plowing.  Due to our existing labor contract, we expect personnel costs for existing staff levels to remain somewhat flat in the fund, over the next few years. The negotiated union contract brings new positions on board at a lower rate due to the market price for the work. Actual costs will be dependent on employee turnover. Attached, you will also find a more detailed listing of Street Maintenance Fund operating and capital expenditures titled “FY18 Operating Budget”. The budget, excluding personnel, totals $4.3 Million this year. Notable items include:  Operating Expenditures: Existing Personnel 27% Added Personnel 3% Operations 30% Debt Service, incl Intercap 6% Approved CIP *with adjustments 34% General Street Maintenance 128 o Electricity for non-SID street lighting, traffic signals, maintenance buildings - $81,700 o Road Supplies - $129,000 o Gas & Oil - $108,000 o Repair & Maintenance of Equipment - $189,000 o Vehicle Maintenance Allocation - $290,000; the Street Maintenance Fund is one of the heaviest users of the Vehicle Maintenance Shop services.  Capital Expenditures: A complete listing can be found in the appendix to the budget document, page 222. CHIP SEAL PROJECTS: $ 365,000.00 ELLIS, OLD HIGHLAND BLVD, KENYON DR., BERTHOT, CHAMBERS, BAXTER DR., KNABB, LOMAS, FIELDSTONE, CONCORD, LEXINGTON, PARK PL., CAMBRIDGE, OXFORD, CORNELL, PRINCETON, STANFORD. PEDESTRIAN RAMPS‐ADA $ 25,000.00 THERMOPLASTIC LANE MARKING PROJECTS $ 25,000.00 CURB, GUTTER AND SIDEWALK REPLACEMENT PROGRAM. $ 50,000.00 ADDED: SHARE OF ARTERIAL & COLLECTOR PROJECT $ 266,000.00 STR20: BIKE PATH IMPS AS RECOMMENDED BY BABAB $ 25,000.00 FY18 STR38:MINI LOADER $ 90,000.00 FY18 STR40:DUMP TRUCK W/PLOW & SANDER‐1 $ 180,000.00 FY18 STR58:TANDEM AXLE DUMP TRUCK W/PLOW&SANDER $ 230,000.00 FY18 STR62:REPLACE #2751‐WATER TRUCK $ 160,000.00 FY18 STR64:STEEL DRUM ROLLER & TRAILER $ 120,000.00 FY18 STR56:TACK OIL DISTRIBUTION UNIT $ 90,000.00  Transfers to Other Funds: o Assessment money to fund Reconstruction Projects will be transferred to our street reconstruction fund. $700,000. (SCR04: South Grand) 129 Street Maintenance District - 5 year Projection FY2018 Budget Preparation Approved Projected Projected Projected Projected Projected Customer Increase - sq ftg 2% 2% 2% 2% 2% 2% Rate Increase - General 6% 6% 4% 4% 4% 4% Rate Increase - Added Maintenance 9%11%0%0%0%0% Rate Increase - Street Reconstruction 0% 0% 0% 0% 0% 0% 15.0% 17.0% 4.0% 4.0% 4.0% 4.0% General Street Maintenance FY17 FY18 FY19 FY20 FY21 FY22 Proportional Assessment Share 85.0% 85.0% 85.0% 85.0% 85.0% 85.0% Beginning Fund Balance - Projected 753,359 112,915 (429,422) 32,588 423,776 558,213 Estimated Revenues: Assessments: Undesignated 3,355,587 3,617,390 3,826,041 4,046,727 4,280,142 4,527,021 Assessments: Added Maintenance 592,493 1,026,782 1,047,317 1,068,264 1,089,629 1,111,421 Street Cut Permits 7,619 17,500 10,000 10,000 10,000 10,000 Interest Earnings 15,000 10,000 15,000 15,000 15,000 15,000 Penalty & Interest 11,000 11,000 11,000 11,000 11,000 11,000 Total Estimated Revenues:3,981,699 4,682,671 4,909,358 5,150,990 5,405,771 5,674,442 Proposed Expenditures: Existing Personnel 1,335,254 1,433,694 1,462,368 1,491,615 1,521,448 1,551,876 Added Personnel 97,500 130,000 135,200 140,608 146,232 152,082 Operations 1,628,066 1,592,207 1,639,973 1,689,172 1,739,848 1,792,043 Debt Service, incl Intercap 184,822 295,207 295,207 295,207 295,207 295,207 Approved CIP *with adjustments 1,376,501 1,773,900 914,600 1,143,200 1,568,600 1,312,889 Increase Pavement Mtc Total Proposed Expenditures:4,622,143 5,225,008 4,447,348 4,759,803 5,271,334 5,104,097 Ending Fund Balance - Projected 112,915 (429,422) 32,588 423,776 558,213 1,128,558 Street & Curb Reconstruction FY17 FY18 FY19 FY20 FY21 FY22 Accumulated Assessment Amount 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% Beginning Designated Fund Balance - Projected 53,970 54,743 38,744 39,222 46,840 47,299 Estimated Revenues: Annual Assessments Designated: Reconstruction & Curbs 673,773 684,000 695,478 707,618 720,459 734,040 Proposed Expenditures: Transfers to Construction Fund 673,000 700,000 695,000 700,000 720,000 734,000 Ending Designated Fund Balance - Projected 54,743$ 38,744$ 39,222$ 46,840$ 47,299$ 47,339$ Total Annual Assessments: Small Lot, 5,000 sq ft.112.81$ 131.99$ 137.27$ 142.76$ 148.47$ 154.41$ Average Lot, 7,500 sq ft.169.24$ 198.02$ 205.94$ 214.17$ 222.74$ 231.65$ Large Lot, 10,000 sq ft.225.66$ 264.02$ 274.58$ 285.57$ 296.99$ 308.87$ Capped Residential, 15,000 sq ft.338.49$ 396.03$ 411.87$ 428.35$ 445.48$ 463.30$ 130 Date: 6/13/2017 FY18 Operating Budget CM RECOMMENDED BUDGET STREET MAINTENANCE FUND DESCRIPTION FY18 CM RECOMMENDED BUDGET STORM WATER $525.00 BOOKS & REFERENCE MTRLS $700.00 SHIPPING & HANDLING $700.00 SUBSCRIPTIONS $800.00 COMPUTERS & SERVERS < $5K $1,000.00 OFFICE SUPPLIES $1,800.00 MEDICAL SERVICES $2,000.00 DUES & CERTIFICATIONS $2,300.00 ADVERTISING $3,000.00 REPAIR & MAINT- BUILDINGS $5,500.00 STREET SIGN REPAIR $7,000.00 COMPUTER SUPPLIES $7,420.00 CLOTHING & UNIFORMS $8,000.00 POSTAGE $8,250.00 INTERNET $8,550.00 RENTS & LEASES $9,800.00 IN-STATE $11,000.00 REPAIR & MAINT - OTHER $11,000.00 WATER SERVICE $11,000.00 CHEMICALS $11,500.00 REFUSE DISPOSAL $14,500.00 INSURANCE $15,000.00 TELEPHONE $16,600.00 INTEREST $16,851.00 OUT-OF-STATE $17,000.00 SMALL EQUIPMENT AND TOOLS $23,000.00 MAINTENANCE CONTRACTS $26,205.00 VEHICLE SUPPLIES $42,500.00 CONTRACTORS $58,000.00 CONSULTANTS & PROF SERV $80,800.00 ELECTRICITY $81,700.00 GASOLINE AND OIL $108,000.00 GENERAL $124,780.00 ROAD SUPPLIES $129,000.00 REPAIR & MAINT- EQUIPMENT $189,000.00 ADMINISTRATIVE OVERHEAD $263,996.00 PRINCIPAL $278,356.00 VEH MAINT FUND ALLOCATION $290,281.00 TRANSFERS TO OTHER FUNDS $700,000.00 IMP:INFRASTRUCTURE+IMPROV $867,900.00 M&E:MACH+EQUIP/HEAVY TRUK $906,000.00 TOTAL $4,361,314.00 131 Note: The FY18 Recommended Budget document was well underway when the Commission approved a FY17 budget amendment to move Westside Street projects from FY18 into FY17. Westside Street projects are included below (shown with *) and will be moved into the FY17 budget totals, per the amendment, for our presentation of the Appropriation Resolution (Final Budget). Arterial and Collector District – FY18 Budget Worksheet Arterial and Collector District (Fund 141) is included in the Streets Maintenance Information on page 151. Revenue: Since its creation in the summer of 2015, the financial plan for the District has been to phase-in assessment levels to equal approximately $2 Million/year, over a 3 year period. In the first year, assessments equal over $565,000. In FY17 (year two of the phase-in), assessments were set to total $1,092,410. This year, we have recommended that assessments total $1,816,250. We will be receiving $266,000 in added Gas Tax revenues in the Gas Tax Fund that will be used towards completing an Arterial & Collector District project. The typical lot’s assessment will be $69.97 for the year. Expenditures: Expenditures this year are entirely for Capital projects that were approved in the Capital Improvement Plan. FY18 SIF036 ‐ COTTONWOOD (BABCOCK TO DURSTON) $ 1,278,000.00 FY18 SIF039 ‐ FERGUSON & DURSTON INTERSECTION $ 451,244.00 FY18 SIF046 ‐ OAK (NEW HOLLAND TO FERGUSON) * $ 600,000.00 FY18 SIF061 ‐ OAK & FERGUSON INTERSECTION * $ 269,066.00 FY18 SIF074 ‐ OAK AND DAVIS INTERSECTION * $ 352,302.00 FY18 SIF080 ‐ FERGUSON (BAXTER TO OAK) * $ 666,666.00 FY18 SIF104 ‐ COTTONWOOD & BABCOCK INTERSECTION $ 287,067.00 FY18 SIF112 ‐ HIGHLAND & MAIN INTERSECTION IMPS $ 30,000.00 CM ADJUSTMENT: SHARE FROM NEW GAS TAX FUND 110 $ (266,000.00) On the following page you will find a “5-Year Projection” of revenues and expenditures for the Arterial & Collector Fund. We have utilized these long-range financial projections to give us an indication of what assessment requirements are for the approved capital projects. 132 Arterial & Collector District - 5 year Projection Fund 141 FY2018 Budget Preparation Approved Recommended Projected Projected Projected Projected Customer Increase - sq ftg 2% 2% 2% 2% 2% 2% Rate Increase - General 95% 63% 2% 2% 2% 2% 97% 65% 4% 4% 4% 4% Arterial & Collector Maintenance & Capital FY17 FY18 FY19 FY20 FY21 FY22 Beginning Fund Balance - Projected 1,001,600 1,074,918 (772,186) 24,484 (903,907) 313,061 Estimated Revenues: Assessments: 1,092,410 1,816,241 1,889,617 1,965,958 2,045,382 2,128,016 Interest Earnings 10,016 3,000 (7,722) 245 (9,039) 3,131 Penalty & Interest 892 2,000 5,196 5,406 5,625 5,852 Revenue - Payback Districts Total Estimated Revenues:1,103,318 1,821,241 1,887,092 1,971,609 2,041,968 2,136,998 Proposed Expenditures: Existing Personnel - - - - - - Operations - - - - - - Debt Service, incl Intercap - - - - - - Approved CIP 1,030,000 3,668,345 1,090,421 2,900,000 825,000 750,000 Total Proposed Expenditures:1,030,000 3,668,345 1,090,421 2,900,000 825,000 750,000 Ending Fund Balance - Projected 1,074,918 (772,186) 24,484 (903,907) 313,061 1,700,059 Total Annual Assessments: Small Lot, 5,000 sq ft.28.27$ 46.64$ 48.51$ 50.45$ 52.47$ 54.57$ Average Lot, 7,500 sq ft.42.40$ 69.97$ 72.77$ 75.68$ 78.70$ 81.85$ Large Lot, 10,000 sq ft.56.54$ 93.29$ 97.02$ 100.90$ 104.94$ 109.14$ Capped Residential, 15,000 sq ft.84.81$ 139.93$ 145.53$ 151.35$ 157.41$ 163.70$ 133 Date: 6/13/2017 FY18 Operating & Captial Budget CM RECOMMENDED BUDGET ARTERIAL & COLLECTOR DISTRICT FUND DESCRIPTION FY18 CM RECOMMENDED BUDGET IMP:INFRASTRUCTURE+IMPROV $3,668,345.00 TOTAL $3,668,345.00 134 Street Impact Fee Fund – FY18 Budget Worksheet Revenue The Street Impact Fee Fund’s revenue consists mainly of Impact Fee revenue. We estimate this revenue based on a 5 year average. It is difficult to accurately predict these revenues, since they are based mainly on the building occurring in the community. Revenues fluctuate based on a variety of factors related to building type and size. FY18 is estimated to collect $3,123,750 in impact fees, with $100,000 in interest income. Expenditures Expenditures continue to be supported by the large existing fund balance that has accumulated in the Fund. We expect to begin FY18 with over $9.8 million. Expenditures for FY18 are budgeted at $11.9 Million. Operating Expenditures ‐ $95,000 – these amounts support the planning and completion of our capacity‐ expanding street projects and are NOT general street maintenance.  Consulting fees related to project legal issues.  Transportation Demand Contract, Western Transportation Institute ‐ $50,000 (Year 2 of 3‐year commitment) Capital ‐ $11,870,049 FY18 SIF036 ‐ COTTONWOOD (BABCOCK TO DURSTON) $ 1,278,000.00 FY18 SIF039 ‐ FERGUSON & DURSTON INTERSECTION $ 1,804,976.00 FY18 SIF046 ‐ OAK (NEW HOLLAND TO FERGUSON) * $ 1,400,000.00 FY18 SIF061 ‐ OAK & FERGUSON INTERSECTION * $ 1,076,265.00 FY18 SIF074 ‐ OAK AND DAVIS INTERSECTION * $ 1,409,206.00 FY18 SIF080 ‐ FERGUSON (BAXTER TO OAK) * $ 333,333.00 FY18 SIF102 ‐ S 11TH AVENUE $ 1,600,000.00 FY18 SIF104 ‐ COTTONWOOD & BABCOCK INTERSECTION $ 1,148,269.00 FY18 SIF112 ‐ HIGHLAND & MAIN INTERSECTION IMPS $ 120,000.00 FY18 SIF122 ‐ BABCOCK & FERGUSON INTERSECTION $ 800,000.00 FY18 SIF130 ‐ KAGY INTERIM IMPROVEMENTS $ 500,000.00 FY18 SIF131 ‐ S 3RD & GRAF INTERSECTION DESIGN $ 150,000.00 FY18 SIF001:ANNUAL RIGHT OF WAY ACQUISITION $ 250,000.00 135