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Home My WebLink About06-18-18 City Commission Packet Materials - A1. FY19 Budget Work Session Enterprise and Internal Service Funds Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Kristin Donald, Finance Director Anna Rosenberry, Assistant City Manager Andrea Surratt, City Manager SUBJECT: Fiscal Year 2019 (FY19) Budget Work Session Enterprise and Internal Service Funds, and General Budget Discussion MEETING DATE: June 18, 2018 AGENDA ITEM TYPE: Action Item – Budget Work Session RECOMMENDATION: Listen to staff presentations, ask questions, give direction, as you see fit. BACKGROUND: Attached are budget worksheets and other materials regarding a portion of our Enterprise Funds and Internal Service Funds. Water and Wastewater funds appropriations are presented and revenue has been annualized but revenues and any rate changes will be presented starting in July with the completion of our rate study. This information has been prepared to assist us in developing the City’s Final Budget, and is based on what is contained in the FY19 City Manager’s Recommended Budget, available at http://www.bozeman.net/government/finance/budget-and-financial-reports. Enterprise fund information begins on page 47 and Internal Service funds page 52 of the fund summaries section of the Recommended Budget document. Tonight is also an opportunity to discuss the other funds of the budget, before final adoption. 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 25, 2018. ENTERPRISE AND INTERNAL SERVICE FUNDS: We will be reviewing the details of the following funds tonight: Public Works Admin (Internal Service Fund) Water & Water Impact Fees Wastewater & Wastewater Impact Fees 162 Stormwater Solid waste Parking 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. 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 Enterprise Funds highlighted in yellow. Attachments: FY19 Enterprise and Internal service Budget Worksheets On File: City Manager’s Recommended Budget for FY19 Report compiled on: June 6, 2018 FY18 Approved FY19 Recommended FY 19 Recommended increase % Change Street Assessment 198.02 207.92 9.90 5.0% Arterial Street Assessment 69.97 51.78 (18.19) -26.0% Tree (Forestry ) Assessment 22.48 23.61 1.13 5.0% Property Taxes 711.10 722.49 11.39 1.6% Storm Water Services 70.92 70.92 - 0.0% Water Service 516.24 TBD TBD Sewer Services 606.72 TBD TBD 4.23$ 0.35$ Total Annual Increase Pending Water/ Sewer rates Monthly Increase 163 Enterprise and Internal Service Fund Budget Worksheets Enterprise Funds are used to account for operations that are financed an operated in a manner similar to private Business enterprises. Internal Service Funds are used to account for the financing of goods and services provided by one department to other departments. Starting on page 47 through 52 of the Recommended Budget are the summaries for the Enterprise and Internal Service Funds. Public Works programs are described starting of page 95 of the budget and Parking can be found on page 93 of the City Manager Recommended Budget. Public Works Administration - FY19 Budget Worksheet This is a new internal service fund accounting for Public Works Administration, which includes Engineering and GIS. The costs for these functions are allocated out to the other enterprise funds for the support the functions provide. Expenditures match the revenues. Strategic Plan item 4.1 c will be developed working towards a GIS Land Use & Infrastructure Development Tracking. Provide easy-to-use, accurate and informative tracking of land-use and infrastructure development trends and project-specific progress for use across the organization to inform strategic infrastructure investments. Public Works Administration Fund – FY19 Expenditure Total $2.38 Million The majority of the expenditures are for Personnel expenses with $1.6 followed by operations. Public Works Admin Fund FY19 Personnel & Benefits $1,693,903 Operating $581,096 Capital $106,458 Total Expenditures $2,381,457 Personnel: The FY19 budget proposed adding two positions. Public Works Administration/Engineering 1.00 Lead Billing Clerk 1.00 Engineer I Capital Projects: Public Works Admin GIS06 GPS System Replacement $17,500 Public Works Admin GIS08 Large Format Plotter - Replacement $20,000 Public Works Admin GIS12 FME Server $20,000 Public Works Admin GIS11 GIS Computer Replacments $49,048 Public Works Admin Total $106,548 164 Water Fund - FY19 Budget Worksheet The Water Fund accounts for the Water Plant and Water Operations Divisions Budget. It is a self-funded utility; the primary source of revenue is from water customer payments. A major change for this fund is moving the Public Work Administrative function to an Internal Service fund. Water Fund – FY19 Expenditure Total $12.1 Million With the move of Public Works Administration Personnel Expenditures are reduced. The proposed budget for FY19 is as follows: Water Fund FY19 Personnel & Benefits $2,085,584 Operating $4,534,920 Capital $4,316,009 Debt Service $1,165,630 Total Expenditures $12,102,143 Personnel: The FY19 budget proposed adding position. Water 0.50 Controls Integrator Technician (1 FTE - .5 Service worker= .50) Capital Projects: Water Fund Capital Projects total $4.3 million: Water Fund – FY19 Revenues Total $11 Million The CM Recommended Budget shows only annualized revenue amounts (Year to date for March and FY17 for the remaining) until the pending rates study is completed. Water utility charges are the main source of revenue, with minor amounts collected from interest income, misc. revenue sources and rents. Water Fund W66 Meters, Transducers & Communications (Replacement Scada Radio & Strap On Flow Meter)$10,000 Water Fund W57 WTP Facility Engineering & Optimization $20,000 Water Fund W03 Annual Water Pipe Replacement Program - Design $22,500 Water Fund W86 Sourdough Diversion cleanout $25,000 Water Fund WC02 Meter Software Subscription $36,000 Water Fund WC03 Municipal Watershed Data Collection $50,000 Water Fund W58 Module Replace Fund $50,000 Water Fund W78 Hilltop Tank Inspection and Mixing System $130,000 Water Fund W75 Lead Service Line Replacement $200,000 Water Fund W85 South University District 12" Water Main $296,509 Water Fund W87 Lyman Tank and Transmission Main Design $500,000 Water Fund W04-19 Water Pipe Replacement Program - Construction in 2019 $1,200,000 Water Fund W72 PRV Phase 1 - Mechanical and Structural Upgrades $1,750,000 Water Fund GIS15 GIS Field Vehicle Replacement $26,000 Water Fund Total $4,316,009 165 Water Fund – FY19 Fund Balance $9.7 Million - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Water Fund Financial Trends Revenues Expenditures Fund Balance 166 Water Impact Fee Fund – FY19 Budget Worksheet Impact Fees are accounted for in a separate fund for budgeting purposes. Our budget estimate for FY19 was established during our capital planning processes last fall and is based on the 3-year average for collections (FY15-17). Capital Projects for the Water Impact Fee fund are: Transfers- $600,000 debt for water tank storage - 1,000,000 2,000,000 3,000,000 4,000,000 FY17 Actual FY18 Approved FY19 CM Recommended Water Impact Fee Total Expenditures Total Revenues Impact Fees Water WIF46 Water Main Oversizing, Oak St and Ryun Sun Way $107,000 Impact Fees Water WIF21 S 11th 12" water main extension $136,010 Impact Fees Water WIF33 Groundwater Well Field and Transmission Main Design $500,000 Impact Fees Water WIF14 Loan Debt Service - WTP 5.3MG Concrete Water Storage Reservoir $600,000 Impact Fees Water WIF21 11th and 12' water main extension $136,010 Impact Fees Water WIF46 Water Main Oversizing- Oak $107,000 Impact Fees Water Total $1,586,020 167 Wastewater Fund – FY19 Budget Worksheet Both the Water Reclamation Facility (WRF) and the Wastewater Operations Divisions are paid for by the Wastewater Fund. Wastewater Fund - FY19 Expenditure Total $10.8 Million The Wastewater Fund is an enterprise fund that supports the operations of wastewater treatment and distribution. It is a self-funded utility; the primary source of revenue is from wastewater customer payments. The proposed expenditure budget for FY19 is as follows: Wastewater Fund FY19 Personnel & Benefits $2,017,844 Operating $3,969,269 Capital $3,352,500 Debt Service $1,479,059 Total Expenditures $10,815,672 Personnel: The FY19 budget proposed adding position. Wastewater 1.00 Scada Manager Capital Projects: The FY19 Capital budget $3.3 Million- Wastewater Fund - FY19 Revenues Total $9.6 Million The CM Recommended Budget shows only annualized revenue amounts (Year to date for March and FY17 for the remaining) until the pending rates study is completed. Wastewater Fund PW05 Public Works Shops Master Plan $20,000 Wastewater Fund WW07 Annual Wastewater Pipe Replacement Program - Design $22,500 Wastewater Fund WW86 Steerable sewer TV tractor $25,000 Wastewater Fund WW87 Sewer Flow Meters $35,000 Wastewater Fund WW70 WRF Facility Engineering & Optimization $50,000 Wastewater Fund WW58 Chip Seal and Topcoat WRF Asphalt $55,000 Wastewater Fund WW69 WRF Facility R&R $75,000 Wastewater Fund WW89 HVAC heat loop optimization $250,000 Wastewater Fund WW39 Resurface and Repaint Clarifiers $320,000 Wastewater Fund WW08-19 Wastewater Pipe Replacement Program - Construction in 2019 $1,000,000 Wastewater Fund WW49 Roll-Off Storage Building Construction & Possible 2nd Screw Press Enclosure $1,500,000 Wastewater Fund Total $3,352,500 168 Wastewater Fund – FY19 Fund Balance $1.8 Million 169 Wastewater Impact Fees- FY19 Budget Worksheet Wastewater Impact Fees are accounted for in a separate fund for accounting purposes. Capital Projects: FY19 includes the Davis Lift Station and the Front Street Inceptor they are both to be financed and debt to be paid back with Impact Fees. These projects address the Strategic plan, specifically 4.3 b. - 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 FY17 Actual FY18 Approved FY19 CM Recommended Wastewater Impact Fee Total Expenditures Total Revenues Impact Fees Wastewater WWIF36 Baxter Creek Basin - Cottonwood Road 18" Sanitary Sewer Extension $640,000 Impact Fees Wastewater WWIF11 Front Street Interceptor $2,185,000 Impact Fees Wastewater WWIF24 Davis Lane (Lift Station)$5,800,000 Impact Fees Wastewater Total $8,625,000 170 Storm Water Fund – FY19 Budget Worksheet This is the City’s newest self-funded utility, created in FY13. Stormwater Fund - FY19 Expenditure Total $1.4 Million Stormwater Fund FY19 Personnel & Benefits $408,583 Operating $240,373 Capital $635,000 Debt Service $160,346 Total Expenditures $1,444,302 Capital: Stormwater Utility Fund Capital Projects Include: Stormwater Fund - FY19 Revenues Total $1.4 Million The Stormwater department is funded primarily through Stormwater utility charges. These monthly charges are based on the impervious area of a lot, which does not fluctuate seasonally or change much from year-to-year unless there is new annexations and developments. FY19 will mark the third full fiscal year with new rate model in place. We are recommending no rate increase this year. The fund also receives a transfer of General Fund dollars $75,000 to make the payment on the Landfill Remediation system loan (a requirement of the State Revolving Fund loan program.) Stormwater Fund – FY19 Fund Balance $650k Stormwater Fund STRM54 Admin Staff Vehicle $35,000 Stormwater Fund STRM13 Annual Pipe Rehabilitation and Drainage Projects $50,000 Stormwater Fund STRM36 Boulevard Infiltration Structures - Downtown Stormwater Treatment Phase 2 $50,000 Stormwater Fund STRM51 Pipe Replacement – N. 4th (W. Cottonwood to W. Peach)$50,000 Stormwater Fund STRM48 Annual Inlet Replacement Program $100,000 Stormwater Fund STRM39 Mechanical Separation Units - Downtown Stormwater Treatment Phase 2 $350,000 Stormwater Fund Total $635,000 171 Solid Waste Fund – FY19 Budget Worksheet The Solid Waste Fund accounts for our garbage collection and recycling divisions. Solid Waste Fund - FY19 Expenditure Total $3.7 Million Solid Waste Fund FY19 Personnel & Benefits $1,351,142 Operating $2,312,942 Capital $100,000 Total Expenditures $3,764,084 Capital: The following Capital items are included in the FY19 City Manager Recommended Budget: Solid Waste Fund - FY19 Revenues Total $3.9 Million We are not recommending any fee changes. Solid Waste Fund – FY19 Fund Balance $1.2 Million The Solid Waste program competes with outside private sector competition and to ensure the program can respond quickly to a changing market we are increaser the reserve policy of 45 days to 90 days. Solid Waste Fund SW46 Grapple Truck (Shared w/ Tree Maint)$100,000 Solid Waste Fund Total $100,000 172 Parking Fund – FY19 Budget Worksheet The Parking Enterprise Fund is managed by the city’s Parking Commission. Their budget is developed with the help of the Parking Manger and approved by the City Commission. The Program is working towards the Strategic Plan item 4.2 c by developing a comprehensive, integrated approach to parking management for the downtown, midtown, university, and other districts. Consider a range of solutions including both on-street parking and parking garages. Parking Fund - FY19 Expenditure Total $1.4 Million Parking Fund FY19 Personnel & Benefits $408,583 Operating $240,373 Capital $112,081 Total Expenditures $1,444,302 Capital: The following capital projects are planned for FY19 Parking Fund - FY19 Revenues Total $1.4 Million The Parking Fund’s largest source of revenue is also the most unpredictable source: Fines & Forfeitures. These are the revenues derived from parking tickets issued to those that violate parking regulations. The second largest segment of revenue normally comes from the sale of Licenses and Permits at the parking garage and on the city- owned surface lots downtown. Parking Fund P020 Parking Vehicle Leases $10,000 Parking Fund P004 Surface Parking Lot Hardware & Software Systems $15,000 Parking Fund P014 Parking Garage Crack Maintenance and Repair $20,000 Parking Fund P024 Electric Vehicle Charging Station $30,000 Parking Fund GF199 PROFESSIONAL BUILDING RECONFIGURATION - Phase 2 $37,031 Parking Fund Total $112,031 173