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HomeMy WebLinkAbout06-24-19 City Commission Packet Materials - A2. Res 5048, FY20 Final Budget Adoption Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Kristin Donald, Finance Director Anna Rosenberry, Assistant City Manager Andrea Surratt, City Manager SUBJECT: Resolution No. 5048 - A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, APPROPRIATING FUNDS FOR VARIOUS BUDGET UNITS, AND FURTHER ESTIMATING REVENUE NECESSARY TO OPERATE AND MAINTAIN SERVICES OF MUNICIPAL GOVERNMENT FOR THE FISCAL YEAR ENDING JUNE 30, 2020. MEETING DATE: June 24, 2019 AGENDA ITEM TYPE: Public Hearing & Action Item RECOMMENDATION: Take public comment, make further revisions, and adopt Resolution No. 5048 – Appropriation Resolution for the Fiscal Year Ending June 30, 2020 (FY20). BACKGROUND: During presentations and work sessions held in May and June, the Commission has been considering the City Manager’s (CM) Recommended Budget, (available at http://www.bozeman.net/government/finance/budget-and-financial-reports) so that a Final Budget can be adopted for FY20. Based on feedback during these work sessions held, we have prepared the Appropriation (Final Budget) Resolution. The memos and meeting minutes can be found with the Commission packets for the following meetings: • May 13th – FY20 City Manager’s Recommended Budget overview • June 3rd – Special Revenue Funds details and Business Improvement Districts and Tax Increment Financing Districts work plans and budgets • June 10th - General Fund work session • June 17th – Enterprise and Internal Service Funds work session and TBID dissolution work plan Tonight has been advertised as the hearing for adoption of the Final Budget. 137 The Appropriation Resolution: The Resolution that is attached comes from the City Manager’s Recommended Budget, with the following changes INCLUDED. These changes represent technical error corrections and updated budget information that has been discussed in previous budget work sessions. General Fund 1. Increase in revenue for additional County Library Contribution of $10,482, based on updated County information. Special Revenue Funds 1. The budgets submitted for the Business Improvement District and the Tax Increment Districts have been incorporated into the attached Resolution, based on their respective June 3rd presented work plans. 2. The Tourism Business Improvement District fund revenue has been updated for the estimated revenue amounts. The appropriation has been updated to be $0. Later this summer a dissolution plan and budget amendment will be presented to the Commission. 3. As presented at the June 3rd work session, a budget amendment for the Willow Springs project had been expected to occur in FY19 when the Recommended Budget was prepared. That budget amendment did not occur. The project’s Housing Plan is expected to be approved in FY20 and an increase is needed in appropriations in the Workforce Housing fund. The Willow Springs project in the amount of $240,000 has been added and the fund appropriation increased to $934,458. Enterprise fund- Wastewater Fund 1. As presented at the June 17th work session, the Wastewater fund needs an increase in appropriations for a debt service payment of $1.2 million. The payment was included in the Rate Study so there is no further needed changes or issues with the addition. Recommended Cuts/Adds to Final Budget- The Appropriation Resolution DOES NOT CONTAIN any of the items listed below. If you would like to include these, or any other items, in the Final Budget, please include them specifically in your motion as an amendment to the Resolution. Fund Type Account Type Change Description Amount Revenue Increase Revenues for additional County Library Contribution 10,482 10,482 Revenues TIF Changes- Workplans presented at 6/3 1,669,250 Revenues Adjusted to $1.1 Million Estimated Revenue. Final budget will contain $0 in approved appropriation. Schedule another Dissolution Plan (workplan) and budget adoption in August for TBID only 798,800 Appropriations TIF Changes - Workplans as presented 6/3 (2,259,947) Appropriations Fund 120 Workforce - Willow Springs added as described 6/3 (240,000) (31,897) Appropriations Data enter error need to include debt service payment. Reserves and rates had the payment in their calculations. (1,239,000) (1,239,000) Adjustments to Final Budget Special Revenue Funds Total Change in Ending Fund Balance – beyond CM Recommended Budget Enterprise Fund Total Change in Ending Fund Balance – beyond CM Recommended Budget Total Change in Ending Fund Balance – beyond CM Recommended Budget General Fund 138 General Fund 1. Increase FY20 Estimated Beginning Fund Balance by cutting two FY19 General Fund Projects: i. Commission Room Remodel: $200,000 ii. Prost Plan: $109,000 2. Add funding for Bogert Pavilion Repairs. The proposal to repair the pavilion will be presented to the Commission in July and approximately $200,000 in funding is needed. 3. Add funding for Parks and Trails District Election. Utilize previously identified “Primary Election - $42,000” and add $10,000 for total of $52,000 for election expenses. Note: This would fund the cost of a May/school election ballot. An additional $50,000 would be needed to fully fund a special election. 4. Add more funding for Broadband Plan. The Recommended budget includes $25,000 for initial steps to prepare a Broadband Plan. The Commission could add an addition $25,000 (total of $50,000) so that we could increase our efforts in Plan development. General Fund Ending Fund Balance Recommendation: The Recommended Budget was prepared so that the General Fund reserve would maintain its required minimum of 16.67% of annual revenues. As has been discussed, we are recommending that the Commission move towards the Government Finance Officer Association’s updated best practice with a risk-based approach to funding the reserve beyond the “16.67% of revenues” method. We have performed an initial analysis based on the updated best practice (Appendix D, Budget Document) and recommend the City work towards a reserve of “17% of expenditures”. Upon updating the General Fund revenue estimates with the additional Library revenues, and, if all of the recommended “cuts and adds” are adopted, there will be an additional $84,270 in ending fund balance in the General Fund. We recommend these dollars remain in the General Fund and increase our ending fund balance. This can be the first step in helping us work towards the new recommended fund balance level of “17% of expenditures”. Beginning Fund balance Increase FY20 Estimated Beginning Fund Balance by cutting two FY19 General Fund Projects: - Commission Room Remodel: $200,000 - Prost Plan: $109,000 309,000 Appropriation Add funding for Bogert Pavilion Repairs of $200K (200,000) Appropriation Add funding for Parks and Trails District Election. Utilize previously identified “Primary Election - $42K” and add $10K for total of $52K (10,000) Appropriation Add funding for Broadband Plan to total of $50K (25,000) 74,000 Total Change in Ending Fund Balance – beyond CM Recommended Budget Recommended Changes for Final Budget General Fund 139 Comparing the Recommended Budget (including the $10,482 County Library contribution) and the proposed final with the recommended cuts/adds for their estimated fund balance and the 16.67% of revenues requirement and the 17% of expenditures, is shown in the chart and table below: General Fund Estimated Ending FY19 7,076,606 Revenues - FY20 EST 33,057,181 Expenditures (34,539,877) Net income (loss)(1,482,696) Estimated Ending FY20 Fund Balance 5,593,910 **Minimum Reserve Required 5,509,640 Difference (negative under funded)84,270 ***Recommendation from Appendix D to work towards 5,871,779 Difference (negative under funded)(277,869) $5,519,910 $5,593,910 Current: 16.67% of Revenues Level, $5,509,640 Goal: 17% of Expenditures Level, $5,871,779 $5,000,000 $5,100,000 $5,200,000 $5,300,000 $5,400,000 $5,500,000 $5,600,000 $5,700,000 $5,800,000 $5,900,000 $6,000,000 City Manager's Recommended Budget Proposed Final Budget (with all cuts/adds) Estimated FY20 General Fund Ending Reserve 140 Items of note regarding property taxes and the tax levy: As we have noted in the Recommended Budget document and in our presentations, there are two important issues related to our property tax levy and property tax revenues this year: Property Valuations are updated by the State this year. This is called property “re-appraisal”, and happens for all residential and commercial real estate in the state, every two years. The Department of Revenue will not certify these numbers to us until the first Monday in August. This makes it difficult to accurately estimate our property tax cap, the number of mills we must levy, and the taxable value of the median home. We have done our best to estimate these amounts, but re-appraisal is certain to bring about changes that we have not predicted. All of these estimates are likely to change when we receive the certification of values. Future Operational Costs for Bozeman Public Safety Center (BPSC) As has been discussed in the past, in summer/fall of 2021 (FY22), the City will begin funding operational costs for the Center, including added staff. At the time the ballot was approved, we estimated these costs to be approximately $523,000, or 4.82 mills. It was decided that we would not ask the voters to approve this operational increase as a voted levy; instead, we would utilize funding authority “below the mill levy cap” to raise the taxes needed to pay operating costs. We continue to track on this issue in order to ensure we can fund the Center. A small portion ($97,000) of this amount that supports records staff could be generated through a reduction of the 9 mills held back for funding 911 and Records Services (Resolution No. 3954.) The rest of the funding would come from a General Fund mill levy increase, bringing us very close to our estimated mill levy cap in FY22. Tonight, if mills are increased beyond our recommendation, we advise that the BPSC operational cost (utilities, plowing, cleaning and security) be kept in mind and the mills would need to come back for the center’s operations in FY22. The best way to do this would be to ensure that any mill levy increase beyond our recommendation be made for one-time project costs. City Manager Changes- Proposed Final Estimated ending Fund Balance 5,593,910 City Manager Changes-Proposed Final 16.67% of Revenues 5,509,640 Difference in 16.67% requirement and fund balance (negative under funded)84,270 City Manager Changes-Proposed Final 17% of Expenditures 5,871,779 Difference in 17% proposal and fund balance (negative under funded)(277,869) Recommended Budget Estimated ending Fund Balance 5,519,910 Recommended Budget 16.67% of Revenues Requirement 5,509,640 Difference in 16.67% requirement and fund balance (negative under funded)10,269 Recommended Budget 17% of Expenditures Proposal 5,831,829 Difference in 17% proposal and fund balance (negative under funded)(311,919) ** Includes $10,482 revenue estimate adjustment to Library County portion Recommended Fund Balance Estimate City Manager Proposed Changes for Final Budget Fund Balance Estimate 141 FISCAL EFFECTS: The Final Budget adoption has far-reaching fiscal effects, which are described in the City Manager’s Recommended Budget, in the numerous materials prepared for budget work sessions, and in the information above. The specific effect on a typical residential property is described below. The effective annual increase of all of these changes would be $121.70 increase for the typical residential property owner. Attachments: Appropriation Resolution No. 5048 Financial Summary Changes in Fund Balance Report compiled on: June 14, 2019 FY20 FY21 FY22 ESTIMATED Remaining unleived mills portion 2.75 3.25 0.9 911/Records mills portion 9 9 8.1 ESTIMATED Total Under Number of The Mills Under the Cap 11.75 12.25 9 11.75 12.25 9 0 2 4 6 8 10 12 14 Number of not levied MillsESTIMATED Mills Under the Cap-(This is an ESTIMATE and three appriasal cycles in the future) Levy/Assessment FY19 Approved FY20 Recommended Recommended increase % Change Street Assessment 207.92 224.55 16.63 8% Arterial Street Assessment 51.78 51.78 - 0% Tree (Forestry ) Assessment 23.61 24.05 0.44 2% Property Taxes (No BPSC)724.66 760.52 35.86 5% Property Taxes ONLY BPSC 0.00 52.17 52.17 100% Storm Water Services 70.92 73.76 2.84 4% Water Service 542.05 555.81 13.76 3% Sewer Services 630.99 630.99 0.00 0% 121.70 10.14 Total Annual Estimated Increase Monthly Increase Average Property - 7,500 Sqft lot, TV $292,000, 10-HCF water use 142 Page 1 of 4 RESOLUTION NO. 5048 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, APPROPRIATING FUNDS FOR VARIOUS BUDGET UNITS, AND FURTHER ESTIMATING REVENUE NECESSARY TO OPERATE AND MAINTAIN SERVICES OF MUNICIPAL GOVERNMENT FOR THE FISCAL YEAR ENDING JUNE 30, 2020. WHEREAS, the City Commission did, on the 13th day of May, 2019, receive and hear the City Manager’s Budget Recommendations for Fiscal Year 2019-2020 (Fiscal Year 2020); and WHEREAS, the City Commission did, on May 13th, June 3, June 10, and June 17th hold Budget Work Sessions that were open to the public to discuss the details of the Recommended Budget and make changes to the same; and WHEREAS, the City Commission did, on the 24th day of June, 2019, after due and proper legal notice, conduct a public hearing on the proposed municipal budget. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, to wit: Section 1 The City Commission of the City of Bozeman, Montana, does hereby authorize and appropriate expenditures of governmental fund types (general fund, special revenues funds, debt service funds and capital project funds) and operating expenses for proprietary fund types (enterprise funds and internal service funds) and fiduciary fund types (permanent funds) for budget 143 Resolution 5048, Appropriating Funds for Fiscal Year Ending June, 30, 2020 Page 2 of 4 units and purposes set forth below, in the amounts designated herein, as follows. The City Commission further authorizes and re-appropriates the unexpended balance of Capital Improvement Program & repair and equipment items previously budgeted which have not been completed. Section 2 The City Commission of the City of Bozeman, Montana does hereby estimate revenues for the various funds, as follows: Budget Unit Total/Fund General Fund 34,304,877$ Special Revenue Funds 36,587,388$ Debt Service Funds 41,045,772$ Capital Projects 41,467,362$ Enterprise Funds 41,788,199$ Internal Service Funds 9,377,654$ Permanent Funds -$ GRAND TOTAL – Operating Budget 204,571,252$ Budget Unit Total/Fund General Fund 33,057,181$ Special Revenue Funds 30,082,319$ Debt Service Funds 40,751,603$ Capital Projects 38,044,733$ Enterprise Funds 37,443,903$ Internal Service Funds 9,485,524$ Permanent Funds 90,000$ GRAND TOTAL – Estimated 188,955,263$ 144 Resolution 5048, Appropriating Funds for Fiscal Year Ending June, 30, 2020 Page 3 of 4 Section 3 That budget information contained in the "City Manager's Recommended Budget for Fiscal Year 2019-2020" document pertaining to Policy Direction, Fiscal Policy, and the specific information concerning budgeting for each department, as may be subsequently amended prior to final adoption of the budget, are hereby incorporated into the document entitled "Approved Budget for Fiscal Year 2019-2020" and are hereby adopted by reference. Section 4 Pursuant to Sections 7-6-4006 and 7-6-4012, M.C.A., the City Commission hereby delegates appropriation and budget amendment authority to the City Manager for the expenditures from the following funds: debt service funds; fee-based budgets; trust funds; federal, state and private grants accepted and approved by the City Commission; special assessments; monies borrowed during the year; proceeds from sale of land; and funds for gifts or donations. Section 5 Pursuant to Section 7-6-4030, M.C.A., this resolution, upon its passage, shall be in full force and effect on July 1, 2019. Section 6 That upon this resolution becoming effective, as provided in Section 5 above, all resolutions and parts thereof in conflict herewith are hereby repealed. Section 7 The Tourism Business Improvement District fund appropriations will be budgeted once a Dissolution Plan has been accepted by the Commission. 145 Resolution 5048, Appropriating Funds for Fiscal Year Ending June, 30, 2020 Page 4 of 4 Section 8 That should it be found by any court of competent jurisdiction that any section, clause, portion, sentence, word, or phrase of this resolution is deemed to be contrary to any existing law or regulations, that in this instance, it is the intent of the City Commission of the City of Bozeman, Montana, that all other portions, sections, words, clauses, phrases, or paragraphs of this document shall remain in full force and effect. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 24th day of June, 2019. ___________________________________ CYNTHIA L. ANDRUS Mayor ATTEST: _____________________________________ ROBIN CROUGH City Clerk APPROVED AS TO FORM: ___________________________________ KAREN STAMBAUGH Acting City Attorney 146  General Fund  Special Revenue  Debt Service  Construction Projects  Enterprise  Internal Service  Permanent   All Funds Projected Beginning  Fund Balance/Working Capital6,767,606$      20,088,180$   4,923,477$      5,128,109$      28,643,630$   411,454$         1,399,941$      67,362,397$  Estimated Revenues32,687,698      25,816,442      40,751,603      ‐                    36,488,903      9,380,066        90,000              145,214,712  Transfers In369,483           4,265,877        ‐                    38,044,733      955,000           105,458           ‐                    43,740,551    Total Estimated Revenues33,057,181      30,082,319      40,751,603      38,044,733      37,443,903      9,485,524        90,000              188,955,263  Budgted Expenditures33,949,877      31,510,635      3,443,702        41,467,362      41,081,471      9,377,654        ‐                    160,830,701  Transfers out355,000           5,076,753        37,602,070      ‐                    706,728           ‐                    ‐                    43,740,551    Total Approprations34,304,877      36,587,388      41,045,772      41,467,362      41,788,199      9,377,654        ‐                    204,571,252  Increase/(Decrease) in  Fund Balance/Working Capital(1,247,696)       (6,505,069)       (294,169)          (3,422,629)       (4,344,296)       107,870           90,000              (15,615,989)   Projected Ending  Fund Balance/Working Capital5,519,910$      13,583,111$   4,629,308$      1,705,480$      24,299,334$   519,324$         1,489,941$      51,746,408$  Financial SummaryProposed BudgetFiscal Year 2019‐2020147  Fiscal Year  Projected Fund  Balance/Working  Capital   Estimated  Revnues   Appropriations   Budgeted Ending  Fund  Balance/Working  Capital   General Fund 10 General Fund 6,767,606               33,057,181          34,304,877          5,519,910                Special Revenue Funds   100 Planning Fund 1,148,732               1,450,574            1,873,348            725,958                   103 Health‐Medical Insurance 411,839                  2,815,374            2,815,384            411,829                   108 Community Transportation 59,625                     900                       ‐                        60,525                     109 Highway Safety Improvement Projects 23,462                     200                       ‐                        23,662                     110 Gas Tax Apportionment 1,578,972               1,421,750            2,120,350            880,372                   111 Street Maintenance District 334,133                  6,203,836            6,462,343            75,626                     112 Tree Maintenance 271,260                  782,945               787,767               266,438                   113 Fire Impact Fee 2,497,496               416,134               20,451                 2,893,179                114 Street Impact Fee 3,124,141               4,490,095            7,565,195            49,041                     115 Building Inspection Special Revenue 922,552                  1,975,200            2,657,236            240,516                   116 Dowtown Improvement District 1,885,421               1,729,400            2,816,000            798,821                   119 Economic Development Loan Fund 829,753                  50,000                 31,000                 848,753                   120 Community Housing 732,092                  339,970               934,458               137,604                   121 Housing Revolving Loan Fund 2,485                       1,195                    ‐                        3,680                       123 Big Sky Ec Dev Grant ‐                           50,000                 50,000                 ‐                            125 Drug Forfeiture 42,589                     199,474               242,052               11                             128 Fish Wildlife And Park Management Areas 12,766                     200                       8,000                    4,966                       130 Americans With Disability Act 36,307                     400                       ‐                        36,707                     131 Beautification of Bozeman 1,018                       10                         ‐                        1,028                       132 Bogert Park Special Revenue 17,967                     6,275                    5,000                    19,242                     133 Recreation Department Special Revenue 16,252                     2,075                    ‐                        18,327                     135 Cemetery Department Special Revenue 2,444                       30                         ‐                        2,474                       136 Park Department Special Revenue 13,217                     2,600                    ‐                        15,817                     137 Library Department Special Revenue 44,253                     20,000                 ‐                        64,253                     138 Law & Justice Center 274,125                  ‐                        19,125                 255,000                   139 Police Department Special Revenue 280,534                  15,000                 40,000                 255,534                   140 Police Domestic Violence ‐                           187,040               187,040               ‐                            141 Street Arterial Construction 627,223                  2,627,747            2,396,000            858,970                   143 TIF Midtown (formerly N7th) 1,600,000               2,467,949            3,001,852            1,066,097                144 TIF NE Urban Renewal 320,000                  142,500               339,500               123,000                   145 TIF Mandeville Industrial 75,744                     25,000                 ‐                        100,744                   Various Lighting Dist.'s (146‐170, 181, 182, 200‐243)491,152                  457,286               477,499               470,939                   174 Victim Witness Advocate 299,646                  68,500                 90,000                 278,146                   175 Senior Transportation 2,707                       108,740               108,490               2,957                       176 Business Improvement District 8,297                       168,350               167,160               9,487                       177 Neighborhood Associations 994                          10                         ‐                        1,004                       178 Veteran's Treatment Court 37,844                     115,500               152,346               998                           179 Diaster Relief Fund  140,777                  11,000                 ‐                        151,777                   183 Fire Department Special Revenue 79,046                     4,000                    50,000                 33,046                     184 Parks Master Plan Develop 23,708                     ‐                        ‐                        23,708                     186 Development Impacts 154,169                  1,500                    5,000                    150,669                   187 Fire Department Equipment 656,899                  436,460               1,068,000            25,359                     188 City/County Drug Forfeiture 132,985                  1,300                    ‐                        134,285                   189 Story Mansion Special Revenue 5,797                       35,000                 40,792                 5                               191 Tourism BID 1,200                       1,101,200            ‐                        1,102,400                193 Street Maintenance ‐ Babcock SID 8,383                       2,650                    ‐                        11,033                     CHANGES IN FUND BALANCE/WORKING CAPITAL 148  Fiscal Year  Projected Fund  Balance/Working  Capital   Estimated  Revnues   Appropriations   Budgeted Ending  Fund  Balance/Working  Capital  194 Street Maintenance ‐ Durston SID 136,688                  41,450                 ‐                        178,138                   199 Sports Park ‐                           51,000                 51,000                 ‐                            850 Park Land ‐ Cash in Lieu 721,486                  54,500                 5,000                    770,986                   Total Special Revenue Funds 20,088,180             30,082,319          36,587,388          13,583,111              Debt Service Funds 300 Special Improvement District Revolv. Fund 3,229,669               18,700                 867,070               2,381,299                303 G.O. Refunding Series 2012 86,848                     273,300               273,300               86,848                     304 Park & Trails Bond ‐                           1,076,788            1,076,788            ‐                            305 TIF 2007 Downtown Bonds  ‐                           418,898               418,898               ‐                            307 Bozeman Public Safety Center ‐ GO Bonds ‐                           38,406,716          38,376,716          30,000                     310‐448 SID Funds 1,606,960               525,201               1,000                    2,131,161                450 Sports Park Loan ‐                           32,000                 32,000                 ‐                            Total Debt Service Funds 4,923,477               40,751,603          41,045,772          4,629,308                Construction Funds 500's Capital Projects 5,128,109               38,044,733          41,467,362          1,705,480                Enterprise Funds 600 Water 9,323,836               11,946,576          10,171,734          11,098,678             610 Water Impact Fee ‐ Net Assets 6,157,774               1,930,831            6,963,052            1,125,553                620 Waste Water 3,216,959               10,036,394          9,124,612            4,128,741                630 Waste Water Impact Fee ‐ Net Assets 6,233,498               6,540,674            7,343,417            5,430,755                640 Solid Waste  1,755,498               4,165,681            5,154,777            766,402                   641 Landfill Post‐Closure & Monitoring 6,209                       282,000               287,417               792                           650 Parking Enterprise 1,289,609               1,063,340            1,082,669            1,270,280                670 Storm Water  660,247                  1,478,407            1,660,521            478,133                   Total Enterprise Funds 28,643,630             37,443,903          41,788,199          24,299,334             Internal Service Funds   710 Vehicle Maintenance Shop 6,164                       1,390,212            1,387,800            8,576                       720 Health‐Medical Self‐Insurance Fund 405,290                  5,044,794            5,044,794            405,290                   750 Public Works Administration ‐                           3,050,518            2,945,060            105,458                   Total Internal Service Funds 411,454                  9,485,524            9,377,654            519,324                   Permanent Funds 800 Cemetery Perpetual Care 1,399,941               90,000                 ‐                        1,489,941                Total All Funds 67,362,397             188,955,263       204,571,252       51,746,408             149