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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. 133 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) 134 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 135 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. 136 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, 137 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 138 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- 139 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 140 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 $25,226,845 141 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 142 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% 143 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 144 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 145 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 147 148 FI N A N C I A L S U M M A R Y __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Ci t y M a n a g e r ' s R e c o m m e n d e d B u d g e t Fi s c a l Y e a r 2 0 1 2 - 2 0 1 3 Ge n e r a l Fu n d Sp e c i a l Re v e n u e De b t Se r v i c e Ca p i t a l Pr o j e c t s E n t e r p r i s e In t e r n a l Se r v i c e P e r m a n e n t A l l F u n d s Pr o j e c t e d B e g i n n i n g Fu n d B a l a n c e / W o r k i n g C a p i t a l $ 5 , 3 2 1 , 2 2 2 1 7 , 3 8 2 , 0 8 6 3 , 3 4 4 , 6 2 0 3 0 2 , 6 8 4 1 0 , 4 1 8 , 6 5 8 4 9 4 , 6 9 9 6 7 6 , 2 0 8 $ 3 7 , 9 4 0 , 1 7 7 Es t i m a t e d R e v e n u e s 24 , 2 1 0 , 3 6 7 1 2 , 7 0 9 , 6 7 2 2 , 6 6 4 , 5 6 6 - 3 8 , 1 8 4 , 6 8 4 4 , 3 5 9 , 1 9 1 3 3 , 0 0 0 8 2 , 1 6 1 , 4 8 0 Le s s A p p r o p r i a t i o n s 25 , 2 6 1 , 8 4 5 1 7 , 8 2 6 , 5 3 3 2 , 6 3 3 , 3 2 6 3 1 , 0 0 0 3 6 , 2 0 7 , 9 0 0 4 , 3 7 2 , 2 2 1 - 8 6 , 3 3 2 , 8 2 5 In c r e a s e / ( D e c r e a s e ) i n Fu n d B a l a n c e / W o r k i n g C a p i t a l ( 1 , 0 5 1 , 4 7 8 ) ( 5 , 1 1 6 , 8 6 1 ) 3 1 , 2 4 0 ( 3 1 , 0 0 0 ) 1 , 9 7 6 , 7 8 4 ( 1 3 , 0 3 0 ) 3 3 , 0 0 0 ( 4 , 1 7 1 , 3 4 5 ) Pr o j e c t e d E n d i n g Fu n d B a l a n c e / W o r k i n g C a p i t a l $ 4 , 2 6 9 , 7 4 4 1 2 , 2 6 5 , 2 2 5 3 , 3 7 5 , 8 6 0 2 7 1 , 6 8 4 1 2 , 3 9 5 , 4 4 2 4 8 1 , 6 6 9 7 0 9 , 2 0 8 $ 3 3 , 7 6 8 , 8 3 2 149 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