HomeMy WebLinkAboutPresentation of the Fiscal Year 2012-2013 City Manager's recommended budget
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chris Kukulski, City Manager
Anna Rosenberry, Finance Director
SUBJECT: Presentation of the FY2012-2013 City Manager’s Recommended Budget
**Reminder: Bring the budget document that you received on May 1, 2012
MEETING DATE: May 7, 2012
AGENDA ITEM TYPE: Presentation/Discussion
RECOMMENDATION: Listen to presentation, ask questions, and provide comments.
BACKGROUND: This presentation will outline the FY2012-2013 (FY13) 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 18, 2012. Following are the
tentatively schedule dates of budget discussions, along with their topics:
May 7: City Manager’s Recommended Budget, overall
May 14: Special Revenue Funds (Building Inspection, Street Mtc, Forestry, etc.)
May 21: Enterprise Funds, with new Storm Water Utility
June 4: General Fund & Special Requests
June 11: TIF and BID Workplans and Budgets
June 18: Final Budget Hearing, Appropriation Resolution Hearing.
Attached to this memo is a copy of the Budget Message, which is included in the document
itself. It is a general summary of the budget and its implications for citizens and property
owners.
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The entire “FY2012-2013 City Manager’s Recommended Budget” document is available online
at http://www.bozeman.net/Departments-(1)/Finance/Budgets-and-Financials.aspx. 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 May and 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.
ALTERNATIVES: As suggested by the City Commission.
Report compiled on: April 30, 2012
Document on File: City Manager’s Recommended Budget for Fiscal Year 2012-2013
Attached Documents: Budget Message (excerpt from Budget Document)
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CITY MANAGER’S BUDGET MESSAGE
___________________________________________________________
April 24, 2012
Bozeman City Commission:
I am pleased to present the City Manager’s Recommended Budget for Fiscal Year 2012-
2013 (FY13).
This budget proposal is being presented to you at its earliest point in our tenure with the
City: completed in late April, and presented in early May. It is evidence of our efforts to
streamline our annual budget process, and (hopefully) adopt a final Appropriation
Resolution before June 30th. We began this effort in December by considering the
advantages and disadvantages of a revised Budget Calendar. With the concerted help of
staff members, community members, and the Commission, we have been able to meet these
newly established timeframes and believe we can be successful in final budget adoption
before June 30th
Adopting the City’s final budget before the fiscal year begins on July 1st has many
advantages.
Improves Understandability of our Financial Plans: Members of the public, our boards, and City
departments are often mystified that the City begins a Fiscal Year without a Final Budget
in place. However, the practice is common among Montana Cities and Counties because we
do not receive our taxable values from the State of Montana until August. Changing our
process to allow a Final Budget adoption before July 1st would fit with the more general
understanding of budget practices: Adopt Your Spending Plan Before Your Fiscal Year
Begins.
We believe it is reasonable, and can be very helpful, for us to adopt a “Final Budget” by the
end of June. If the taxable values received in August are substantially different from those
estimates contained in the adopted budget, we can schedule a hearing and amend the
budget in August at the same time we adopt tax levies. Because taxable values effect
operating budgets for a small number of funds (General Fund, Planning Fund, Health
Insurance Fund, etc.), more than half of the organization’s budget (Water, Sewer, Solid
Waste, Parking, Building Inspection, Street & Tree Mtc, etc.) will be unaffected by the
certification.
Shortens the Budget Timeline by 33% = Improved Staff and Commission Efficiency: Shortening the
budget process itself from nine (9) months to six (6)months means that our departments
will spend less time analyzing “what do I do now that the Preliminary Budget has been
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adopted but the Final Budget hasn’t?” and more time in a pure “operational” decision-
making mode. In addition, we will eliminate the need to advertise, prepare, and hold the
Preliminary Budget Hearing and the preparation and adoption of the Preliminary Budget
Resolution. (Eliminate one hearing and one resolution.)
Risks and Trade-Offs: Significantly changing our Budget Process does not go without some
noted vulnerabilities. First, obviously, is the risk that Taxable Value estimates are
significantly different from those that are certified to us in August. We believe this is a
quantifiable and manageable risk. Second, when we have waited to adopt the final budget
until August/September, we have enjoyed knowing very closely where our revenue and
expenditure estimates “ended” the prior budget year. This process leaves those ending
amounts unknown at the time we adopt the Final Budget. However, we still track the
information and can make necessary budget corrections in the fall, and even affect the tax
levy during its regular process, when necessary.
Following this timeline, we anticipate that we will be able to schedule Final Budget
Adoption (our Appropriation Resolution hearing) for June 18, 2012. The hearing on Tax
Levies will continue to be held in mid-August.
Commission Goals and the Recommended Budget
In February the Commission adopted an updated list of goals and initiatives for staff to
focus on. The entire updated Work Plan can be found on page 29. While not every item
requires a change in budget allocations to accomplish, a number of them are directly
related to resource allocations this year. The Recommended Budget includes:
Implement the adopted economic development plan, integrating economic development
principles throughout the organization.FY13 Budgetary Response: Increasing the
part-time Planner I hours to full time (an addition of 0.25 FTE) will assist in staffing a
number of planning department initiatives in this area.
Adopt comprehensive strategies and financial plans to address deferred maintenance.
Street System
Support rate adjustments that finance the street replacement fund.FY13
Budgetary Response:A 6% Increase in Street Maintenance
Assessments for Year 2 of a 3-year phase-in to fund the Street
Reconstruction Reserve. This amounts to $324,000 for street
reconstruction projects this year.
Support rate adjustments that finance the curb replacement program.
FY13 Budgetary Response: A 2% Increase in Street Maintenance
Assessments for Year 3 of a 5-year phase-in to fund the Curb
Replacement Reserve. This amounts to $150,000 for curb
replacement projects this year.
Sidewalks/trails.FY13 Budgetary Response:Matching funds of
$20,404for the Community Transportation Enhancement Program
project to install pedestrian facilities along Oak Street.
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Water distribution system. FY13 Budgetary Response: 4.5% increase in
Water Rates to help support increased pipe replacement projects of $1
Million.
Waste water collection system.FY13 Budgetary Response: 6% increase in
Wastewater Rates to help support increased pipe replacement projects of $1
Million.
Facilities
Complete design of the Police Station/Municipal Court FY13 Budgetary
Response: $500,000 to continue building design (total of $1M
budgeted between FY12 and FY13.)
Bogert Pool FY13 Budgetary Response: $382,000 for Gutter and
Shell Replacement and $100,000 for Pool Heater Replacement.
Improve Parks and Recreation Amenities Parks, trails and outdoor recreation bond
FY13 Budgetary Response:The City Commission budget includes $4,000 for the
election costs associated with a parks and trails bond question in November 2012.
Complete an Integrated Water Resource Plan. Develop a strategy to purchase additional
water rights.FY13 Budgetary Response: In the Water Fund, $40,000 for the Water
Rights Consultant and $20,000 for Water Rights Attorney.
Create a storm water utility.FY13 Budgetary Response:The establishment of a new
Enterprise Fund and the creation of a new Utility for the mapping, maintenance, and
monitoring of our Storm Water system.
Support Gallatin College Programs. Approve 2013 fiscal year budget that includes 1.5
mills for Gallatin College programs. FY13 Budgetary Response: Includes $125,600 in
funding for the Gallatin College Programsin the Economic Development Department.
Implementation of the community climate action plan
Begin the 10% Energy Reduction Challenge FY13 Budgetary Response:
$10,000 in Grants/Sustainability program budget.
Work to bring LED Lighting to city streets, parks, and facilities. FY13
Budgetary Response: $28,000 Professional Building Parking Lot Light
enhancement project.
Enhance Bozeman Creek Rouse Ave Reconstruction.Developed for Future Budgets:
$276,000 included in the new Storm Water Utility’s 5-year Capital Improvement Plan.
FY13 Budgetary Response:Creation of the utility this year is critical to our ability to
fund these water quality improvements.
Significant changes during the past 12 months
Dedicated Street Maintenance funds reserved for Reconstruction Projects: With
the increase in Street Maintenance Assessments last July, the Commission made two
important financial steps to address the deferred maintenance of our street network. First,
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they dedicated approximately $160,000 in FY12 to a reserve for Street Reconstruction. The
plan is to add an additional 6% of street maintenance assessments to this reserve over an
additional two years (6% in FY13 and another 6% in FY14). This will accumulate roughly
$500,000 each year to reconstruct streets in town. Last fall, a 5-Year Capital Improvement
Plan was established for this money, with future projects identified. Second, they borrowed
approximately $1.5 Million (repaid over the next 10 years) to reconstruct South 8th Street,
with the debt repaid by another 7% increase in Street Maintenance Assessments. The
South 8th Street reconstruction will begin within a number of weeks – and should be a
significant improvement to property values and the functioning of our street system.
General Fund Budget Savings Reserved for Capital Improvement Plan items:
With a true budgetary focus on addressing our lack of maintenance of capital facilities, the
Commission also dedicated a large portion of FY12’s budget savings (revenues in excess of
expenditures) to a reserve assigned for capital improvement projects. This budget strategy
allowed us to being the design work for the Police & Municipal Court facility roughly a year
earlier than expected, and left a source for us to draw on to make important heater repairs
at the Swim Center. We believe this use of budget savings is a great model; it rewards staff
with the benefits of prudent spending by helping address the lack of funding for capital,
and has true dividends for the citizens who rely on our facilities.
Refinance of General Obligation Bonds: At the same time that this budget is being
developed, we are refinancing all ($3.1 Million) of existing General Obligation debt related
to the Library and Transportation Bonds. While the final underwriting has not been
completed, we believe the taxpayers will see a net savings of over 11% on the transaction;
saving over $450,000 over the remaining life of the debt, and approximately 1 mill ($80,000
in interest costs this year alone.)
Sale of the Story Mansion: Removing the need to fund future capital, providing
cash, and budgeting for the maintenance of the Story Park: In April 2012, the
Commission approved the sale of the historic Story Mansion to a non-profit group, Exergy-
Friends of the Story. The sale is expected to be completed by June 30th. This group
promises to rehabilitate and operate the facility, with the first floor remaining open to the
public as a community center. The city will receive approximately $390,000 in cash to the
General Fund from the sale. While this amount is much lower than the approximately $3.5
million that has been invested in buying and preserving the property (city, state, and
federal dollars), we will no longer be responsible for funding the extensive rehabilitation of
the 2nd and 3rd floors of the Mansion, or the Carriage House. Our Facilities Maintenance
department will no longer maintain the building, and our Parks and Recreation
Department will no longer need to maintain the grounds or clean and rent the facility. We
have budgeted $30,000 for our portion of the costs to install a sprinkler system on Story
Park, and $5,000 for our share of park maintenance, including snowplowing.
Changes to Vehicle Replacement Policy: During the development of our Capital
Improvement Plan this past fall, the Commission expressed concern that the City’s mileage
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limits for replacement of light vehicles was out-of-line with current automobile life-spans
and potentially resulting in the replacement of vehicles too soon. In February, the City
Manager revised the Policy so that vehicles are now considered for replacement every 20
years or at/near 150,000 miles. Previously they were considered for replacement every 15
years or at 100,000 miles. Police patrol cars are now to be replaced after 5 years of service
or at the discretion of the Chief. Specialized equipment in patrol cars will be evaluated for
re-use. As a result of this change, two light vehicles that had been scheduled for
replacement are not included in the FY13 Budget. We will modify the scheduling of the
remainder of the CIP vehicle replacements when we update the plan this coming fall.
Streamline funding: This City Manager’s budget recommends the equivalent of one mill
(~$83,000) be dedicated to the Streamline bus system this year. This is similar to the
amount funded in FY12, but is the first time the Recommended Budget has come forward
with a full mill of funding. When the Commission met with the Streamline Board in
December, the importance of funding support, and the timing of Streamline’s budget
process were discussed. The City’s effort to adopt a Final Budget before June 30th should
provide a bit more certainty for the Streamline Board’s annual financial plan.
State Entitlement Share Frozen: During the 2011 State Legislative session, the State
eliminated the statutory growth factor for our Entitlement Share dollars for FY12. Under
the prior statute, the City would have seen approximately $150,000 in increased revenue in
the General Fund in FY12 and further increases in FY13. Instead, both FY12 and FY13
will see ZERO growth in Entitlement Share over FY11’s amounts in the general fund, and a
10% decrease (-$3,100) for the Downtown Tax Increment District.
Solvent Site Active Remediation: After a decades-long effort, the Montana Department
of Environmental Quality entered a Record of Decision regarding the clean-up of the
Bozeman Solvent Site. This budget contains approximately $660,000 in planned
expenditures in the Wastewater Fund for active remediation of the Site. This multi-year
remediation project is being undertaken with CVS Pharmacy.
Mandeville Farm Judgment: In December 2009, the Montana Supreme Court ruled
against the City in our appeal of Delaney v. City of Bozeman. At issue was the City’s
purchase of the Mandeville Farm property in 2003. Delaney was awarded $3 Million. The
City and MMIA are working towards a judicial determination as to whether the City or the
MMIA is responsible for the payment. Currently the MMIA has paid the judgment, subject
to a non-waiver provision that could require the City to reimburse the MMIA, if the courts
find the City is obligated. We anticipate a judicial determination sometime during 2012.
Water Plant Construction ($41 Million): Construction has been underway, and
expected to span 3 fiscal years, for this critical public works project. This budget includes
$18.6M in construction spending on the project, and $19.5M in borrowing. While the new
Water Treatment Plant will require substantial borrowing through completion (estimated
$20M total), we didn’t need to borrow funds in FY12. We will completed loan documents in
FY12 and begin borrowing in FY13. This borrowing is secured by water-system rate-
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payers, and is part of the need for rate increases over the coming years.
Staffing Levels and Changes
General Fund Positions
The recommended budget proposes to add support staff for Communications and
Administrative Assistance in the City Manager’s office, Planner I hours in the Planning
Department (receiving General Fund support), and part-time Custodian services at the
Library.
Public Safety Positions (Police & Fire): Prior to the recession, in November 2007, local
voters approved increasing our tax levy to add staff to both the Police and Fire
Departments. We have budgeted for, and continue to strive to fill all of the authorized
positions in FY13.
The levy also approved funding three Battalion Chief positions within the Fire Department,
as a result of adding a third Fire Station to the City. After careful consideration and
operation of the three stations for nearly three years, we are now recommending that the
Battalion Chief positions be filled.
Recommended Staffing Changes for FY13 –
General Fund
Number of Full-
Time Equivalent
Positions
Battalion Chiefs, Start Date 10/1/2012 3.00
Communications/Administrative Assistant – CM
Office
1.00
Custodian – Library/Facilities Maintenance 0.50
Planner I – Planning 0.25
Net Change 4.75 FTE
Enterprise Fund Positions
We are recommending the following positions be added in our Water, Sewer and Storm
Water funds.
Recommended Staffing Changes for FY13 –
Enterprise Funds
Number of Full-
Time Equivalent
Positions
Water/Sewer – System Integrator (SCADA) 1.0
Storm Water – GIS Technician 1.0
Net Change 2.0 FTE
The System Integrator position would be responsible for the city-wide computerized system
that controls and monitors our water plants, water distribution/collection systems, and the
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water reclamation facility. Because of the customization and integration of our system, and
the significantly increased technological components of the new plants, we believe this
position should be filled in the coming year. Bringing someone on-staff to do this work will
save money that is currently spent on contracts, bring about improvements in system
integration, and mitigate the risk that our only local contractor for SCADA work was
needed but unable to provide service in an emergency.
The Storm Water GIS Technician is needed to begin the critical first step of mapping our
Storm Water system. The City’s most glaring deficiency in permit compliance was our lack
of complete system maps. This position is funded by and would be hired to coincide with
the creation of the Storm Water Utility.
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 totals $25.2 Million in expenditures, in the following
areas:
Department General Fund Amount
Commission $141,343
City Manager/Admin $903,112
Courts $650,312
Attorney $779,003
Finance $832,904
Facilities $1,606,772
Information Technology $966,116
Police (incl State Ret.)$7,570,172
Fire (incl State Ret.)$5,150,259
Public Services/Streets $169,028
Cemetery $437,443
Parks $1,555,094
Library $1,502,355
Recreation $1,674,815
Community Development $382,976
Other $905,141
Total Expenditures $25,226,845
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As shown in the above graph, Police and Fire services combined comprise 50% of the
General Fund’s spending. The next largest departments are grouped together, each
spending roughly $1.5 Million and comprising 6-7% of the budget: Parks, Recreation,
Library, and Facilities Maintenance.
The General Fund budget includes a significant increase in capital projects funded. With
the reserve available to fund capital, and a CIP that seeks to increase revenues dedicated to
capital projects, we were able to budget over $1.9 Million in capital projects and equipment
replacements. A full list of capital items can be found on page 226. Some of the General
Fund Capital items include:
AGENDA/MINUTEAUTOMATIONSOFTWAREESTIMATE $14,000.00
CIPGF176:ELECTRONICDISCOVERYSOFTWARE $64,500.00
PURHCASEOFPROPERTYADJACENTTOCITYHALLAPPRAISEDVALUE $135,000.00
CIPGF135:SHOPSCOMPLEXSIDEWALKS$32,720.00
CIPGF067:PROFESSIONALBLDGPARKINGLOTLIGHTS $28,000.00
CIPGF050:DESIGNOFNEWPOLICE&MUNICOURTFACILITYFY13$500,000.00
CIPGF084:RESTROOMUPGRADE(REPLACELINDLEYPARKRESTRM)$175,000.00
CIPGF092PLAYGROUNDEQUIPMENTUPGRADE(JARRETTPARK)$50,000.00
CIPGF034LARGEDECKMOWER $50,000.00
CIPGF055:BOGERTPOOLSHELLANDGUTTER$382,000.00
CIPGF117:BOGERTPOOLHEATER $100,000.00
Commission
1%
City
Manager/HR/Clerk
4%
Courts
3%Attorney
3%Finance
3%
Facilities
6%
Information
Technology
4%
Police(inclState
Ret.)
30%
Fire(inclStateRet.)
20%
Public
Services/Streets
1%
Cemetery
2%
Parks
6%
Library
6%
Recreation
7%
Other
4%
FY13GeneralFundBudget
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General Fund Unreserved Fund Balance: The City’s Charter requires an
established minimum level of General Fund Unreserved 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. As discussed in more detail on page 75, this budget meets the
required minimum and could provide an additional $234,000 to be assigned to capital, used
to lower the tax levy, dedicated to other purposes, or left unassigned for future use.
General FundEstimated Minimum
Reserve(16.67%)
Assigned to CIPUnassigned
FY13 Recommended $ 4,035,142 $ 234,602 $ -
Additional Debt: The city is authorized to borrow up to $19.5M for the construction of
the Water Plant. This borrowing is backed by the water utility rate-payers.
We also anticipate refunding approximately $3 Million of General Obligation debt before
June 30th. However, a refunding merely replaces existing bonds with lower-interest rate
bonds, and does not increase the total amount of debt outstanding.
The Commission may ask the voters to approve a Parks and Trails bond issue in the coming
months. If approved, the timing of debt issuance would coincide with our need for cash to
fund the stated purposes that voters approved, this could potentially be in later FY13, or in
fiscal years beyond.
Mill Levy Comparisons
Given the City’s measures to return budget savings to the taxpayers, our levy remains at
7th for comparable communities in our state. The table below shows the city tax levy for a
number of communities in Montana.
City 2010 Census
Populations
FY2012 Mills Levy Rank As a % of Bozeman
Levy
Havre 9,310 241.26 1 145%
Missoula 66,788 233.34 2 140%
Livingston 7,044 209.06 3 125%
Great Falls 58,505 183.24 4 110%
Kalispell 19,927 175.93 5 106%
Billings 104,170 168.73 6 101%
Bozeman 37,280 166.75 7 100%
Belgrade 7,389 156.69 8 94%
Helena 28,190 155.82 9 93%
Whitefish* 6,357 120.40 10 72%
West Yellowstone* 1,271 88.21 11 53%
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West Yellowstone and Whitefish both utilize Local Option Resort Taxes as an alternative or
supplement to property taxes, which the City of Bozeman is currently prohibited from by
state law.
Residential City Property Taxes for FY11, FY12 and FY13
At the time voters approved the increase in tax levies for Police & Fire positions, the city’s
tax levy was 154.18 mills. Adding the approved 30 mills, which were to gradually increased
to a total of 30 mills by FY11, would leave taxpayers with an estimated mill levy of 184
mills. The City’s total tax levy has never reached this level, and has been substantially
lower than the maximum allowed by law, due to the following items:
The City did not immediately utilize the full amount of the 12 Mill Fire Department
Staffing Increase due to award of a $948,825 SAFER Grant; that levy will increase
to its maximum level in FY13, upon full expiration of the 4-year grant.
For FY11, we reduced the adopted levy for the FY11 Safer Grant and Battalion
Chief positions, 911 related mills, and an additional $578,990 (7.16 mills.) This
resulted in a tax levy of 168.75 mills, over 29 mills ($2.3 Million) lower than our
statutory limit.
For FY12, we reduced the adopted levy for the FY12 Safer Grant and Battalion
Chief positions, 911 related mills, and an additional $684,976 (8.34 mills.) This
resulting tax levy of 166.75 mills was 29.87 mills ($2.5 Million) lower than our
statutory limit.
For FY13, we recommend reducing the adopted levy for the FY12 Police Vacancy
Savings (estimated to be $505,000) and approximately $138,000 in General Fund
revenue reduction. We are recommending hiring Battalion Chiefs, beginning on
October 1, 2012. This leaves an estimated 0.86 mill ($74,000) reduction for one-
quarter of the year that they will be vacant. We will also see an estimated 1.1 mill
reduction in the G.O. Bond debt service levies due to the refinance and growth in
taxable values.
For the FY13 tax year, the City would be levying a total of 179.21 mills.
Assessed Market
Value
FY11
Taxable
Value
FY11 City
Tax Levy =
168.75mills
FY12
Taxable
Value
FY12 City
Tax Levy =
166.75 mill
FY13
Estimated
Taxable
Value
FY13
Estimated
City Tax
Levy =
179.21mills
Median Home ~
$133,380
$3,761 $634 $3,761 $627 $3,761 $674
$150,000 $4,230 $714 $4,230 $705 $4,230 $758
$200,000 $5,640 $952 $5,640 $940 $5,640 $1,011
*Restated for FY11-FY13 for newly reported “Median Home” value.
The median home “assessed market value” represents the value on the tax roll for a home
within the Bozeman city limits. This is the value of the property after the “homestead
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exemption” is applied. Median simply means that half of the homes in the city have a
higher value and half have a lower value. Last fall, the City received the full listing of
parcel data from the Montana Department of Revenue, allowing us to re-calculate the
median residence’s taxable value. We anticipate being able to derive this number each
year, going forward.
General Taxes - Cost per Mill
For FY12, the value of one mill increased 2.1% to $82,062. We are estimating a similar
2.1% increase for FY13. Taxable values for the city have had an average annual increase of
5.4% for the past 5 years; although the most recent two years have seen increases of 2.7%
and 2.1% respectively.
City residents living in the median residential home will pay approx $3.71 for each mill the
city levies. In FY13, that is estimated to total $674 in annual property taxes on the median
home. This is an increase of $47 compared to last year, and is estimated to be $65.11 (17.55
mills) lower that our statutory maximum tax rate. Again, mill values and total levies will
be set in August, after the Montana Department of Revenue certifies taxable values to the
City.
City-wide Street and Tree Maintenance Assessments
City property owners pay annual street and tree assessments based on the square footage
of the lot they own. These assessments are the major funding for Street Maintenance and
Forestry Divisions. With the Commission’s focused goal of addressing deferred
maintenance, we have been undertaking a 3-year increase to the Street Maintenance
Assessment. At the same time, we are proposing to create a Storm Water Utility. The
Utility would pay for 60% of the costs of Street Sweeping and Leaf Cleanup, as well as the
costs of compliance and monitoring our Storm Water Permit, all of which are currently paid
for by the Street Maintenance Assessment. After all is said and done, the recommended
budget is based on a 3% increase in the Street assessment, resulting in an annual
assessment of $107.81 for the average sized lot. This increase is a result of the following:
Continued increase to Curb Replacement Fund (2% increase to 6%, ~$160,000
annually)
Increase to a Street Reconstruction Reserve (6% increase to 12%, ~$320,000
2011 Tax Year
City of Bozeman Real Estate Parcel Data
Number of Parcels 12490
Number of Parcels with Zero Taxable Market Value 716
Number of Taxable Parcels 11774
Number of Parcels with Living Units 8934
Median Residence, Taxable Market Value 133,380 Sort out properties with "0" Living Units
Average Residence, Taxable Market Value 158,860 Sort out properties with "0" Living Units
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annually)
Decrease in Operating Budget for Storm Water Utility (-5.7%, ~$153,000 annually)
Increase in Other Operating needs. (0.7%, ~$19,000)
The budget recommends no increase to the Tree Maintenance Assessment maintaining an
annual assessment of $16.86 for the average sized city lot. Combined, the annual increase
in special assessments over the previous year is $3.14 for owners of an averaged sized lot in
the city.
Lot Size FY11 Approved
5% Streets & 4% Trees
FY12 Approved
18% Streets & 0% Trees
FY13 Recommended
3% Streets & 0% Trees
Small= 5,000 sq ft.Streets—$59.12 Streets—$69.76 Streets—$71.85
Trees—$11.24 Trees—$11.24 Trees—$11.24
Average = 7,500 sq ft.Streets—$88.70 Streets—$104.67 Streets—$107.81
Trees—$16.86 Trees—$16.86 Trees—$16.86
Large = 10,000 sq ft.Streets—$118.27 Streets—$139.56 Streets—$143.75
Trees—$22.50 Trees—$22.50 Trees—$22.50
NEW UTILITY! Storm Water Rates
As we have previously discussed, this budget includes the recommendation to create
a Storm Water Utility to better fund and address the mapping, monitoring and
compliance, maintenance and replacement of our storm water infrastructure. At
policy meetings this spring, the Commission gave staff feedback on proposed
methods for charging residents for Storm Water services. Until more detailed
mapping can be done, we will be using a simplified method of charging residents for
service based on the size of existing water meters. There will also be rates
established for the small number of unmetered storm water customers. These items
will be presented for formal adoption in public hearings held in June 2012. We
anticipate beginning to bill customers for service on August 1st, showing on their
utility bill due in mid-September.
Water
Meter
Size:
FY12 Charge/Month FY13 Recommended
Charge/Month
5/8" None. Some Storm
Water Costs
contained in Street
Maintenance
Assessment
$ 3.52
1" $ 4.67
1 1/2" $ 7.34
2" $ 10.67
3" $ 18.45
4" $ 29.59
6" $ 55.15
8" $ 87.19
146
Proposed Rates: The vast majority, 93%, of City properties utilize a 5/8” water
meter. This will result in a monthly rate of $3.52, or $42.24 annually. With billing
beginning on August 1, residents will pay for 11 months of service this fiscal year,
at a cost of $38.72. In the future, we anticipate that mapping data will be available
to develop a Storm Water Utility charged based on impervious service size (roofs
and parking lots) or other factors that are a much better indicator of storm water
service requirements. Until then, we anticipate moving forward with this much-
simplified rate methodology, so that mapping and other system assessments can be
completed.
Water & Sewer Rates
City property owners are by-and-large required to utilize the city’s water and sewer
treatment systems. The adopted facility plans outline large capital projects will need to be
funded in the coming years.
In the summer of 2011, With the near-completion of the Water Reclamation Facility
construction, and the beginning of the Water Treatment Plant construction, we updated our
5-year study of both Water and Sewer Rates. We will be presented this detailed analysis to
the Commission during the summer, for decision making on rate changes effective
September 1, 2011. As with the Street system, we have developed a recommendation that
aggressively addresses the issue of deferred pipe maintenance.
Approved Rate Increase Amount Dedicated to
Deferred Maintenance
Water Rates Sewer Rates
To Fund Current Operations,
Capital & Address Deferred
Maintenance over 20 years.
~$900,000/year 4.5% each year, for
the next 5 years
6% each year, for
the next 5 years
For FY13, a residential customer utilizing 10 hundred cubic feet of water each month, will
see an estimated combined monthly increase for these services of $4.21/month, or $50.52
per year, and will aggressively addressing the system’s deferred pipe maintenance.
Because of our inclined-block rate schedules for water services, the increase that residents
experience will relate to their individual patterns of water usage (peaks, etc.)
Average
Residential
Customer
FY11 Monthly Bill
3.2% Increase Water
10.2% Increase Sewer
Adopted
FY12 Monthly Bill
4.5% Increase Water
6% Increase Sewer
Adopted
FY13 Monthly Bill
4.5% Increase Water
6% Increase Sewer
Water $36.78 per month $38.43 per month $40.15 per month
Sewer $39.20 per month$41.55 per month$44.04 per month
Total$75.98 per month$79.98 per month$84.19 per month
147
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CHANGES IN FUND BALANCE/WORKING CAPITAL
___________________________________________________________________
Projected BeginningEstimatedAppropriationsBudgeted Ending
Fund Balance/Revenues Fund Balance/
Working Capital Working Capital
General Fund
010General Fund 5,321,222 24,210,367$ 25,261,845$ 4,269,744$
Special Revenue Funds
100Planning Fund 249,603 723,074 734,029 238,648
103Health-Medical Insurance 168,786 1,932,530 2,021,149 80,167
108Community Transportation 61,293 30,150 30,515 60,928
109Highway Safety Improvement ProKects 21,877 - - 21,877
110Gas Tax Apportionment 544,644 654,400 659,500 539,544
111Street Maintenance District 802,064 2,764,176 2,840,515 725,725
112Tree Maintenance 227,690 436,129 461,215 202,604
113Fire Impact Fee 130,590 190,000 167,500 153,090
114Street Impact Fee 7,078,796 1,006,000 4,790,500 3,294,296
115Building Inspection Special Revenue 828,527 965,525 986,616 807,436
116Dowtown Improvement District 2,083,847 1,382,158 2,503,388 962,617
118HUD Projects - - - -
119Economic Development Loan Fund - - - -
120Community Housing 340,463 51,885 40,000 352,348
121Housing Revolving Loan Fund 63,219 5,700 14,400 54,519
125Drug Forfeiture 20,399 191,000 101,369 110,030
128Fish Wildlife And Park Management Areas 26,635 - - 26,635
129Special Projects - Recovery Act, ARRA 438,007 - - 438,007
130Americans With Disability Act 4,210 - - 4,210
131Beautification Of Bozeman 1,389 - - 1,389
132Bogert Park Special Revenue 9,150 - - 9,150
133Recreation Department Special Revenue 17,330 700 1,000 17,030
135Cemetery Department Special Revenue 2,280 - - 2,280
136Park Department Special Revenue 7,770 1,200 12,000 (3,030)
137Library Department Special Revenue 11,436 700 7,900 4,236
138Law & Justice Center 426,249 - 20,000 406,249
139Police Department Special Revenue 280,204 103,500 80,669 303,035
140Police Domestic Violence (94,290) 255,000 208,160 (47,450)
142Sustainability Grant - - - -
143TIF N 7th Corridor 365,862 504,000 790,523 79,339
144TIF NE Urban Renewal 130,449 80,500 169,952 40,997
145TIF Mandeville Industrial (172,853) 5,000 - (167,853)
146 Lighting Dist.'s (146-170, 181, 182, 200-224)492,275 315,000 315,000 492,275
174Victim Witness Advocate 340,326 79,500 122,000 297,826
175Senior Transportation 2,522 83,769 83,769 2,522
176Business Improvement District 6,517 114,000 114,000 6,517
177Neighborhood Associations 969 - - 969
179Diaster Relief Fund 87,560 10,000 - 97,560
CHANGES IN FUND BALANCE/WORKING CAPITAL
Fiscal Year 2013
150
Projected BeginningEstimatedAppropriationsBudgeted Ending
Fund Balance/Revenues Fund Balance/
Working Capital Working Capital
183Fire Department Special Revenue 32,569 - - 32,569
184Parks Master Plan Develop 332,071 75,000 75,000 332,071
185Insurance Proceeds 256,727 - - 256,727
186Development Impacts 652,770 4,500 - 657,270
187Fire Department Equipment 668,598 339,576 77,864 930,310
188City/County Drug Forfeiture 247,614 7,000 - 254,614
189Story Mansion Special Revenue (4,622) - - (4,622)
191Tourism BID - 398,000 398,000 -
850Park Land - Cash in Lieu 190,564 - - 190,564
Total Special Revenue Funds 17,382,086 12,709,672 17,826,533 12,265,225
Debt Service Funds
300Special Improvement District Revolv. Fund 1,248,196 31,240 - 1,279,436
301Library Bonds - 275,850 275,850 -
302Bond P & I 1995 Transportation ProKects - 429,088 429,088 -
305TIF 2007 Downtown Bonds - 428,388 428,388 -
310SID Funds 2,096,424 1,500,000 1,500,000 2,096,424
Total Debt Service Funds 3,344,620 2,664,566 2,633,326 3,375,860
Construction Funds
Capital Projects 302,684 - 31,000 271,684
Enterprise Funds
600Water 1,522,210 26,239,692 22,134,352 5,627,550
610Water Impact Fee - Net Assets 4,121,870 850,000 3,075,290 1,896,580
620Waste Water 2,851,452 6,800,597 6,727,116 2,924,933
630Waste Water Impact Fee - Net Assets 1,093,401 820,000 820,000 1,093,401
640Solid Waste 823,872 2,550,979 2,593,746 781,105
650Parking Enterprise 5,853 488,000 463,869 29,984
670NEW! Storm Water - 435,416 393,527 41,889
Total Enterprise Funds 10,418,658 38,184,684 36,207,900 12,395,442
Internal Service Funds -
710Vehicle Maintenance Shop259,651 773,191 782,221 250,621
720Health-Medical Self-Insurance Fund 235,048 3,586,000 3,590,000 231,048
-
Total Internal Service Funds 494,699 4,359,191 4,372,221 481,669
Permanent Funds
800Cemetery Perpetual Care 676,208 33,000 - 709,208
Total Permanent Funds 676,208 33,000 - 709,208
Total All Funds 37,940,177 82,161,480 86,332,825 33,768,832
CHANGES IN FUND BALANCE/WORKING CAPITAL
Fiscal Year 2013
151
MILL LEVIES & MILL VALUES
FISCAL YEAR FY08 FY09 FY10 FY11 FY12FY13 EST
MILL VALUE 68,981$ 74,178$ 78,290$ 80,399$ 82,062$ 83,769$
*Corrected 9/2011Issued 9/2011
PERCENTAGE CHANGE 9.1%7.5%5.5%2.7%2.1%2.1%
GENERAL FUND:
All-Purpose 101.26111.91111.96 110.16 127.16 140.24
SPECIAL REVENUE:
City Planning 2.00 2.00 2.00 200 2.00 2.00
Police Retirement*4.27 4.14 4.34 4.45 0.00 0.00
Firefighters' Retirement*2.81 2.72 2.85 2.97 0.00 0.00
Public Employees' Retirement*4.61 4.52 4.75 4.86 0.00 0.00
Comprehensive Insurance*4.67 4.53 4.61 4.73 0.00 0.00
Health/Med Insurance 22.36 24.3123.67 2429 22.53 23.07
Fire Capital & Equipment 4.00 4.00 4.00 4.00 4.00
Fire Truck/Equipment
Senior Transportation 1.00 1.00 1.00 1.00 1.00 1.00
Workforce Housing 1.46 1.00 0.50 0.50 0.50
TOTAL SPECIAL REVENUE 41.7248.68 48.22 4880 30.03 30.57
DEBT SERVICE:*Refunding
Library G.O. Bonds 4.53 4.27 4.03 394 3.84 3.28
Transportation G.O. Bonds 6.67 6.30 5.98 585 5.72 5.12
TOTAL DEBT SERVICE 11.2010.57 10.01 9.79 9.56 8.40
TOTAL ALL LEVES 154.18171.16170.19 168.75 166.75 179.21
Percentage Change in Mills -5.7%11.0%-06%-0.8%-1.2%7.4%
Property Taxes Levied $10,635,491$12,696,306$13,324,175$13,567,611$13,683,839$15,012,499
Percentage Change in Dollars 29%19.4%49%18%09%9.7%
* These funds are being combined into the All Purpose Levy. They are all subject to MCA 15-10-420.
Tax Authority Authorized but Not Levied
General Fund Reduction 462,720$ 684,976$ 137,475$
Street & Tree Maintenance Offset 116,270$ -$ -$
Police & Fire Reductions 583,000$ 849,000$ 914,000$ 578,525$
SAFER Grant 350,120$ 303,570$ 189,720$ 113,985$ -$
911 Mills (Resolution No. 3954)620,829 667,602$ 704,610$ 723,303$ 738,558$ 753,921$
FY11 Certification Error:59,753$
Total Authorized But Not Levied 620,829$ 1,017,722$ 1,591,180$ 2,400,766$ 2,451,519$ 1,469,921$
Number of Mills - 9.00 13.72 2032 29.87 1755
MILL LEVIES & MILL VALUES
152
153
154
155