HomeMy WebLinkAboutPresentation of FY2014-2015 City Manager's Recommended Budget__17
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chris Kukulski, City Manager
Anna Rosenberry, Administrative Services Director
SUBJECT: Presentation of the FY2014-2015 City Manager’s Recommended Budget
MEETING DATE: May 19, 2014
AGENDA ITEM TYPE: Presentation/Discussion
RECOMMENDATION: Listen to presentation, ask questions, and provide comments.
BACKGROUND: This presentation will outline the FY2014-2015 (FY15) 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 23, 2014. Following are the
tentatively schedule dates of budget discussions, along with their topics:
May 19: City Manager’s Recommended Budget, overall
June 2: Tax Increment District and Business Improvement District Work-plans
and Budgets
June 9: General Fund June 16: Special Revenue Funds Enterprise Funds
June 23: Final Budget Hearing, Appropriation Resolution Hearing
June 30: Tentative: 5th Monday, could potentially schedule meeting if necessary.
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. Also attached are the Financial Summaries pages of the Budget document, for your
reference.
The entire “FY2014-2015 City Manager’s Recommended Budget” document is available online
at http://www.bozeman.net/Business/Budgets-and-Financials. 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. The Recommended Budget has the
following impacts on the Typical Resident:
Typical Resident: Assessment/Charge
CM Rec
Budget
Street Assessments $18.24
Forestry Assessments $ 0.35
Property Taxes $69.00
Water Services $0.00
Sewer Services $16.44
Storm Water Services $31.98
Annual Increase $136.01
Monthly Increase $11.33
The details surrounding these increases will be discussed in detail through the budget adoption
process.
ALTERNATIVES: As suggested by the City Commission.
Report compiled on: May 5, 2014
Document on File: City Manager’s Recommended Budget for Fiscal Year 2014-2015
Attached Documents: Budget Message (excerpt from Budget Document)
CITY MANAGER’S BUDGET MESSAGE
___________________________________________________________
May 19th, 2014
Bozeman City Commission:
I am pleased to present the City Manager’s Recommended Budget for Fiscal Year 2014-
2015 (FY15).
This year, creation of the budget recommendation has been influenced by a handful of
recent events that have financial impacts for the City. First and foremost, significant
development and construction activities are once again growing the number of families,
workers, and businesses within the City. This growth drives increasing workloads in
Community Development, Engineering, and Building Inspection, Water/Sewer Operations
(water and sewer service lines), Information Technology and GIS Divisions, Street
Maintenance, and utility clerks, as we bring these new properties on-line with City
services. Fiscal Year 2015 marks the third and final payment the City owes to the Montana
Municipal Interlocal Authority (MMIA) for the Delaney judgment. And, we continue to
work to fulfill our obligations as a “good neighbor” at the Story Mill Landfill. Striking the
right balance between the financial plans and funding these three items alone has been a
challenging task.
We also look ahead with excitement about what will be accomplished with the Trails Open
Space and Parks (TOPs) bond funds and are hopeful about our plans for voter-approval of a
new Police and Court facility this fall.
All-in-all, this is the first year our City’s budget has exceeded the $100 Million dollar mark;
budgeted expenditures across all funds total over $105 Million.
Commission Goals and the City Manager’s Recommended Budget
The City Commission recently updated its priorities for the coming months. Below we have
described the priorities and how this Recommended Budget seeks to address them:
2014 – 2015 Adopted Priorities
1. Story Mill Landfill Project
In October of 2012, the City, as part of ongoing monitoring efforts, detected volatile
organic compounds (VOC’s) in the soil at the Story Mill landfill. A loan to the City
for $2.135 million has been approved by the State Revolving Loan Fund in order to
identify and put in place a system to limit the migration of VOCs off the landfill. The
program provided a 20-year loan at 3% annual interest, secured by the City’s
Stormwater Fund. Recommended Budget: The budget includes $1.7 million
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for engineering and construction of the system. Also, a tax levy dedication
of 1.57 mills ($140,000) for repayment of the loan is included in this budget.
During 2013, the city installed numerous mitigation systems in homes near the
landfill. Subsequent testing has shown these systems to be effective. The city
continues to address claims filed by property owners in this matter. At this time,
insurance coverage is uncertain; however, based on the claims as presented, we
believe the city’s insurers will be required to provide a defense and coverage.
Recommended Budget: This budget includes spending $525,000 with an
anticipated reimbursement of FY14 and FY15 defense costs of $646,000.
To date, our investigation, mitigation, and other costs have been paid from the Post-
Closure Mitigation and Monitoring fund. The sale of the North Park industrial
property in the coming months could replenish this fund and assist in future legal,
project, and ongoing monitoring costs. Without reimbursement of defense costs or
the Sale of North Park, the Post Closure Mitigation and Monitoring fund will have a
negative balance of approximately ($400,000) by the end of FY15. At this time, we
have not included any projected budget amounts related to the Sale of North Park.
However, at final budget time, there may be more information concerning the
likelihood of sale.
2. Police & Municipal Courts Building
This spring we have been working to complete the land exchange with the Montana
Department of Transportation (MDOT) and finish developmental design of this
critical building. Previous budgets have approved $1.75 Million for these steps. In
November 2014, we will be asking the voters to approve approximately $22 Million
in General Obligation bonds plus an operations levy to build the facility and operate
into the future. Recommended Budget: The budget includes $28,400 in
election costs, which will cover the amount necessary for the bond election
this fall. The budget assumes voter approval and includes $22 Million in
bond revenues and construction expenditures for this project. (Any
authorized tax levies would begin in the next budget year, FY16.)
3. Transportation System
The City’s network of streets, sidewalks, and intersections continues to be a
significant concern. In the developing areas of the City, expansion and completion of
the system is a hurdle; in the older areas of town, reconstruction and replacement
are our pressing tasks. In either case, the financial resources that we have available
are not sufficient – and are a mixed bag of numerous different taxes, assessments,
and fees. Bringing all of this together into an integrated, efficient system of
maintenance and construction is a considerable challenge. Recommended Budget
contains:
1. Expiration of the 1995 G.O. Transportation Bond debt service: When
originally approved, voters paid over 14 mills/year. As the community
grew, the annual payment decreased to 5 mills. The last principal and
interest payment on this bond was completed in fiscal year 2014. Going
forward, there will be no tax levy for this bond.
2. New! Proposed Street Local Share Tax Levy: With the expiration of the
1995 G.O. Transportation bond, we have included from our general tax
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authority (within our existing levy cap) 5 mills - $445,000 for the local
portion of street intersections. This will net with the reduced bond levy
and appear as “no change” to the property tax payer. From this money,
we have budgeted to spend $300,000 for the local share of the
intersection control at Baxter & Davis Lane. Future intersections were
included in the Capital Improvements Plan and include: Main &
Broadway, Ferguson & Durston, and Ferguson and Babcock.
3. Street Reconstruction: $50,000 dedicated to spot repair of street curbs,
and $800,000 for street and curb replacement projects. We anticipate
that this project will be an SID/Street Maintenance combination, similar
to Story Street. The specific project will be identified based on the
pavement condition assessment.
4. Street Impact Fees: $100,000 for right of way acquisition, $200,000 for
the expansion of Cottonwood (Babcock to Oak St.), $125,000 to update
the Transportation Plan, $100,000 for the expansion of Ferguson (Baxter
to Oak St.), $275,000 for the expansion of South 11th Ave (Opportunity to
Arnold St.), and $450,000 for intersection control at Baxter & Davis
Lane.
5. Increase in Street Maintenance Assessments: This budget proposes the
following increases in our annual assessments:
a. 5% for Street & Curb Reconstructions - $150,000. After this
increase, approximately $790,000 (~25% of estimated assessment)
of our annual assessment will be designated reconstruction
projects (described above.)
b. 10% for general increases $300,000, including adding
$200,000/year for pavement maintenance (chip seals, overlay,
patching.)
4. Trails & Open Space Bond
In November 2012, city voters approved $15 Million in General Obligation bonds to
fund Trail, Open Space, and Park (TOP) projects. In December 2013, we issued
$9.9M of those bonds. Since that time, nearly $14 Million has been allocated to
specific projects through a TOP application process. We will be working over the
coming months to complete land acquisition and project construction.
Recommended Budget: We anticipate issuing the remaining $5.1 Million
bonds in FY15 to complete the funding of approved projects. We also have
budgeted to expend the full $15 Million by the end of the fiscal year. The
tax levy for FY15 includes the debt service owing on $9.9 Million. (Debt
service owing on the addition $5.1 Million will be added to the tax rolls in
FY16.)
5. Storm water Utility
In 2012 the city created its Storm Water Utility. During the last two years, we have
been working to identify assessment methodologies, infrastructure locations and
conditions, and develop a funding plan for future storm water improvements.
Recently, the Commission heard the Public Works Department’s recommendation
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for funding operations and storm water improvements. This recommendation
included changing our current “meter-sized” assessment method to a more equitable
“impervious surface” method. Recommended Budget: This budget includes
increasing the Storm water Program to our “silver level” funding of $1.7
Million annually, beginning mid-year, once an impervious surface
assessment method can be adopted. From July – December, we will be
funding our current “basic program” and developing the impervious
surface data layer.
6. Family Aquatics Center
Previous studies have identified the limited life-span of Bogert pool, the city’s only
public outdoor swimming pool. The FY14 budget contained $125,000 to begin the
design of a replacement for Bogert Pool. The Commission also set aside, in reserve,
$225,000 for additional design work. Recommended Budget: This budget
appropriates the $225,000 from reserves for expenditure in FY15, so that a
voter-approved bond measure could be considered in the future.
Significant changes during the past 12 months
Continued Growth in Construction Sector. Our Building Inspection division has seen
strong permit issuance over the past 12 months.
While never completely stopping, building construction significantly slowed during the
recession. For the current fiscal year to date (July-April), the total value of Building
Permits for New Construction is 136% of the same time frame during the previous year.
We have added building inspection staff and outside contracts mid-year to keep up
workload demands.
$135,166,203
$60,448,978
$‐
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
FY‐Thru
April 2014
FY‐Thru
April 2013
FY‐Thru
April 2012
FY‐Thru
April 2011
FY‐Thru
April 2010
Building Permit Construction Value
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Increased Citizen Participation with Online City Hall Budget Forum. Online City
Hall is a new interactive tool for citizens to provide feedback to the City on a variety of
topics. The forum was installed this past year as a way to utilize social media features to
“welcome citizen involvement”, furthering our core value of Teamwork.
We specifically asked for citizens to rank responses to: “How would you prioritize the City
Manager’s recommended budget?” Approximately 130 people viewed the forum, with 40
making priority lists. This equates to roughly 2 hours of public comment, if it were to have
been made during a public meeting. Considering that we rarely have more than 3-5 people
commenting at a budget hearing, the forum provided significantly more input on the budget
than we have received during past years.
Forum responders were asked to rank the following six priorities. The average priorities, in
order, were:
1. Transportation System Upgrades
2. Economic Development
3. Emphasis on Cleaning and Improving our Storm Water System
4. Police/Municipal Courts Building
5. Improve Technology
6. Sustainability and Reduction of Green-House Gas Emissions
7. Family Aquatics Center
Energy Saving Improvements Identified by McKinstry Analysis. The current year’s
budget funded an in-depth audit of City buildings and facilities for potential energy
savings. The firm McKinstry was selected as the energy performance contractor for this
assessment. They have very recently delivered a draft report that outlines a number of
energy-saving projects and identifies estimated “payback” periods, where energy savings
will cover the costs of the improvements. As a part of the study, we were able to identify
some interesting opportunities:
1. Improvements to better utilize our existing Story Mill ditch rights to reduce the
Cemetery’s need for treated water to irrigate.
2. Study of previous Library and City Hall Building Commissioning reports and
possible re-commissioning of the buildings for improved energy savings, equipment
life, and comfort.
3. Numerous building and street lighting projects that have a cost recovery period of
less than 10 years.
4. Improvements to the Senior Center kitchen and hot water system that have a cost
recovery of less than 8 years.
These, and other projects, have not been included in the Recommended Budget, due to the
timing of receiving the information from McKinstry. In the coming weeks we’ll be working
to identify how to move forward in FY15.
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Last Year for MMIA Settlement payments. 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 sought judicial determination on the amounts owed by each party. In
April 2012, a District Court in Helena determined that the City owed the full amount. The
City filed an appeal with the Montana Supreme Court. Prior to a determination by the
Court, the City and MMIA settled the case. Under the terms of the settlement, the City
needed to pay the MMIA a total of $2 Million. FY15 marks the third and final payment of
approximately $675,000 to the MMIA.
Study Commission for city voters to approve in June 2014. The Montana
Constitution requires each local government in Montana to conduct an election every ten
years “to determine whether a local government will undertake a review procedure”. The
Bozeman City Commission passed a resolution for the question to appear on the ballot at
the primary election held on June 3, 2014. If the voters decide in favor, a study commission
will be elected during the general election on November 4, 2014.
A study commission must prepare a budget for each fiscal year it is in existence, to be
adopted by the City Commission. To support the budget, the City Commission may levy
mills in excess of all other mill levies authorized by law. The City Staff has recommended
levying outside the cap to cover the costs of a study commission. The estimated 3-year cost
of the study commission is $76,260. This FY15 Recommended budget includes $33,500 in
estimated costs, and an accompanying tax levy to pay these expenses.
Gallatin College received voter support. On November 4th, 2013, Gallatin County
voters passed a modest property tax increase to support and expand job-training and two-
year education at Gallatin College. The 1.5 mill levy will cost a median home owner
$4.15/year, raising $370,000/year to support the College. This levy also fulfills a
requirement set by the Montana Board of Regents in 2010 when the board approved
putting the MSU-Bozeman campus in charge of the two-year program. As result of voter
approval, the City is no longer budgeting 1.5 mills out of our all purpose levy/general fund
this year.
2013 Bond Rating held at Aa3. Moody’s Investors Service assigned an Aa3 rating to the
City of Bozeman’s General Obligation Bonds, Series 2013, expected to be issued in the
amount of $9.9 million. As of November 22, 2013, Moody’s affirmed the Aa3 rating on the
city’s previously issued general obligation debt totaling $13.36 million. The current offering
is secured by the city’s full faith, credit, and unlimited property tax pledge.
Moody’s identified strengths for the city as: 1) Bozeman’s moderately sized tax base that
did not decline during the recession; 2) our recent wealth measures from the American
Community Survey indicate a solid improvement in wealth; 3) Montana State University
provides a stable employer base and institutional presence, and 4) Low debt burden. They
saw the City’s Challenges as: 1) our draw down of reserve levels due to one-time litigation
payouts (MMIA Settlement) and 2) our moderate taxpayer concentration risk (the top ten
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taxpayers comprise approximately 10% of our tax base.)
Moody’s stated that our bond rating would move down if there were: 1) protracted decline
in the city's taxable valuation, or 2) a sustained trend of deteriorated financial operations.
They stated that our bond rating would move up if there were: 1) significant improvement
in the city's financial position from current year (FY14) levels, or 2) continued growth in the
city's full valuation combined with solid expansion of local economy.
We expect our next rating to occur in November 2014 for the issuance of the next Trails,
Open Space and Parks bond series.
2013 Refinance of Water & Wastewater System Loans Saves over $3 Million. The
City has outstanding loans with the Montana Department of Natural Resources and
Conservation (DNRC) to finance the construction of the Water Plant and the Water
Reclamation Facility. In August 2013, the DNRC approved, and the City adopted, an
interest rate reduction from 3.75% to 3.00%. The decrease will save the Water Fund an
average of $83,535 per year, totaling $1,670,694 over the remaining life of the loan. The
decrease will save the Wastewater Fund an average of $99,047 per year, totaling
$1,782,853 over the remaining life of the loan.
Staffing Level Changes
General Fund (& Community Development) Positions
Recommended FY15 staffing for the General Fund and the Community Development fund
includes adding the following positions. We include Community Development with the
General Fund because of its regular reliance on the General Fund for financial support.
One Full-Time Equivalent (FTE) customarily works 2080 hours per year.
Fund Position Full-Time
Equivalent
General Fund GIS Analyst 1.00
General Fund Legal Assistant I 0.50
General Fund Library - Library Assistant - 12/wk 0.30
General Fund IT Help Desk - Public Safety Equipment/Software 1.00
General Fund Billing Clerk III 1.00
Community Development
Fund
Historic Preservation Officer - reduced hours (0.40)
Community Development
Fund
Neighborhood/Districts Specialist 1.00
Total 4.40
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Enterprise & Other Fund Positions
The following positions are recommended to be added in our Building, Water, Sewer,
Stormwater, and Special Improvement Lighting District funds.
Fund Position Full-Time Equivalent Note:
Building Insp. Fund Fire Inspector 1.00
SILD Funds SILD's: Street Lighting Worker 0.50
Water & Sewer Fund Water/Sewer Operations - CSW 1.00
Storm Water Fund 2 Service Workers 2.00 Jan. 2015
Storm Water Fund Program Coordinator 1.00
Storm Water Fund Part Time Streets Sweeper 0.50 Jan. 2015
Storm Water Fund Public Works Tech 1.00 Jan. 2015
Storm Water Fund Foreman 1.00 Jan. 2015
Total Other Funds 8.00
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 has $27.2 Million in expenditures, in the following areas:
Department General Fund
Amount
Commission $ 199,930
City Manager 717,429
Courts 678,475
Attorney 944,842
Admin Svcs (Fin/IT/HR) 2,244,535
Facilities 1,372,968
Police 8,374,213
Fire 5,446,926
Public Services/Streets 89,062
Cemetery 431,032
Parks 1,487,170
Library 1,742,365
Recreation 1,727,687
Economic Development 329,906
Sustainability 155,659
Other 1,304,200
TOTAL Expenditures $27,246,399
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As shown in the above graph, Police and Fire services combined comprise 51% ($13.8
Million) of the General Fund’s spending. The next largest departments are grouped
together, each spending roughly $1.5 - $2.5 Million and each comprising 5-8% of the budget:
Administrative Services, Recreation, Library, Parks, and Facilities Maintenance. Nine
other departments/areas comprise the balance of General Fund Expenditures.
General Fund Undesignated Fund Balance:
The City’s charter requires an established minimum level of General Fund Undesignated
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 74, this budget meets the required minimum reserve of approximately $4,400,000 at
the end of Fiscal Year 2015.
Additional Debt:
As discussed previously, the voters approved the issuance of up to $15 Million in General
Obligation bonds for the purposes of parks, trails, and open space projects. We issued $9.9
Commission
1%
City Manager
3%Courts
2%Attorney
3%
Admin Svcs
(Fin/IT/HR)
8%
Facilities
5%
Police (incl. State
Ret.)
31%
Fire (incl. State
Ret.)
20%
Public
Services/Streets
0%
Cemetery
2%
Parks
5%
Library
6%
Recreation
6%
Economic
Development
1%
Sustainability
1%
Other
5%
FY15 Recommended ‐General Fund Budget
$27.3 Million
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Million in FY14 and expect to issue the remaining $5.1 Million in FY15.
If voters authorize, we will issue up to $22 Million in General Obligation Bonds for the
construction of a Police & Municipal Court facility in FY15.
We expect to issue $2.1 Million in a Stormwater Utility revenue bond to fund the Story Mill
Landfill project. This loan is backed by the Stormwater Utility and will be paid for
through an allocation of the City’s all-purpose tax levy.
Mill Levy Comparisons
Our levy remained 7th for comparable communities in our state last year. This
Recommended Budget, with a total levy of 191.2 Mills, would position Bozeman in 5th place
if other cities made no changes to their levies this year (which is unlikely.) The table below
shows the city tax levy for a number of communities in Montana.
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.
City 2010 Census
Populations
FY2014 Mills Levy Rank As a % of
Bozeman Levy
Havre 9,310 267.04 1 154%
Missoula 66,788 243.52 2 141%
Livingston 7,044 207.62 3 120%
Great Falls 58,505 198.74 4 115%
Kalispell 19,927 185.10 5 107%
Billings 104,170 176.22 6 102%
Bozeman 37,280 173.08 7 100%
Belgrade 7,389 159.31 8 92%
Helena 28,190 155.20 9 90%
Whitefish* 6,357 119.81 10 69%
West Yellowstone* 1,271 90.71 11 52%
Residential City Property Taxes for FY13, FY14, and FY15
In November 2012, the voters approved this issuance of up to $15 Million in General
Obligation Bonds under for the purpose of expanding, creating new, and improving existing
parks, trails, athletic fields and natural areas. At the time of the vote, we estimated that a
$15 Million bond will cost the typical household less than $45/year. We issued $9.9M of
that debt this past December, and will be adding a levy of 8.02 mills ($29.75/yr for the
median residence) this year.
In total, the Recommended Budget will levy 191.2 mills on all taxable property within the
City limits. This represents an increase of 18.12 mills over last year; approximately
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$68.85/year increase in property taxes. This increased levy is attributable to numerous
issues, including:
1. Addition of the TOP Bond debt service levy (8.02 mills)
2. Addition of mill levy for Study Commission (0.38 mills)
3. Addition of mill levy for our Story Mill Landfill Loan (1.57 mills)
4. No dollars are estimated to be available this year from cash carry-over that could
reduce the General Fund (all-purpose) levy. Last year, $1.3 Million was used to
reduce our tax levy. This amounted to a 14.85 mill reduction in taxes last year.
Assessed Market Value Taxable Value FY13 City Tax Levy = 166.75
mill
FY14 City Tax Levy = 173.08
mills
FY15 Estimated
City Tax Levy = 191.20 mills
Median Home ~
$149,000
$3,805 $634 $659 $728
$200,000 $5,107 $852 $884 $977
$300,000 $7,661 $1,277 $1,326 $1,465
*Restated for FY14 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
exemption” is applied. Median simply means that half of the homes in the city have a
higher value and half have a lower value. Each year the Median Home value changes
slightly. For the most recent tax year, the median residential property was had a taxable
market value of $149,000. The median home pays $3.81 in City property taxes for every
mill levied. Residents living in the median home will pay an estimated $728 in annual
property taxes to the City.
General Taxes - Cost per Mill
For FY14, we estimated a 2.0% increase in the city’s value of taxable property. Actual
taxable values, upon certification in August, showed a 2.9% increase over the previous year.
For FY15, due to continued strong subdivision and building permit issuance, we are
estimating a 4.0% increase in taxable values. Taxable values for the City have had an
average increase of 2.9% per year for the past 5 years, and 5.7% per year over the past 10
years.
Citywide 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. The recommended budget is based on a 15% increase in the Street
assessment, resulting in an annual assessment of $139.87 for the average sized lot. This
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increase is a result of the following:
Continued increase to Curb Replacement & Reconstruction Fund (5% increase to
28%, ~$150,000 annual increase.)
Increase in Other Operating needs, including adding $200,000 for increased
pavement projects. (10%, ~$300,000 annual increase)
The Tree Maintenance District is in need of a 2% increase for base operating needs. There
was no increase to this assessment in the past three fiscal years.
Combined, the annual increase in special assessments over the previous year is $18.59 for
owners of an averaged sized lot in the city.
Lot Size
FY13 Approved
8.7% Streets & 0% Trees
FY14 Approved
6.9% Streets & 0% Trees
FY15 Recommended
15% Streets & 2% Trees
Small= 5,000 sq ft. Streets - $75.82 Streets - $81.07 Streets - $93.23
Trees - $11.24 Trees - $11.24 Trees - $11.47
Average = 7,500 sq ft. Streets - $113.78 Streets - $121.63 Streets - $139.87
Trees - $16.86 Trees - $16.86 Trees - $17.21
Large = 10,000 sq ft. Streets - $151.70 Streets - $162.17 Streets - $186.50
Trees - $22.50 Trees - $22.50 Trees - $22.95
Water, Sewer, and Stormwater Utility Rates
Water & Sewer: 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 spring of 2013, with the near completion of the Water Treatment Plant construction,
we updated our 5 year study of both Water and Sewer Rates. We presented this detailed
analysis to the Commission during the spring for decision making on rate changes effective
September 1, 2013. The Commission chose to increase rates for Wastewater (sewer)
service, but to hold water rates flat for the next two years. As with the street system, we
developed a recommendation that aggressively addressed the issue of deferred pipe
maintenance. Our recommendation also included adding staff positions that were deferred
when building activity slowed down.
Stormwater: The Stormwater rates were instituted in FY13, with a 4% increase adopted
for FY14. When originally adopted, we developed a very meager, “start-up” budget that
would serve to pay for initial investigation of the system so that we could build a better
program an assessment strategy. Mid-year, during FY15, we expect a significant change in
the Stormwater budget and customer rate structure. The current Stormwater Utility rate
will remain in effect through the end of the 2014 calendar year.
On April 21, 2014, the City Commission voted to adopt the staff recommended “Silver Level
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of Service” model to be implemented in January 2015. The new model allocates $1.7 million
in annual funding to support 5.5 FTE staff, deferred maintenance and system
enhancements over a 10 year period, and a 50/50 cost chare with subdivision HOAs to fix
deficient detention ponds. Rates will increase on January 2015 from $1.75 to an estimated
$7.08 per month for residential customers. Commercial rate increases will vary.
In Total: For FY15, a residential customer utilizing 10 hundred cubic feet (HCF) of water
each month will see an estimated combined monthly increase for these services of
$1.37/month, during July through December. From January to June, the monthly increase
would grow an additional $4.33/month for the Stormwater rate increase.
Average Residential
Customer
Adopted FY13 Monthly Bill 4.5% Increase Water 6% Increase Sewer
AdoptedFY14 Monthly Bill 0% Increase Water 3% Increase Sewer 4% Incr Storm Water
RecommendedFY15 Monthly Bill
July 2014-Dec. 2014 0% Increase Water 3% Increase Sewer 0% Stormwater
RecommendedFY15 Monthly Bill
Jan. 2015-June 2015 0% Increase Water 3% Increase Sewer 404% Stormwater
Water $40.15 per month $40.15 per month $40.15 per month $40.15 per month
Sewer $44.04 per month $45.36 per month $46.73 per month $46.73 per month
Stormwater $ 1.67 per month $ 1.75 per month $ 1.75 per month $ 7.08 per month
Total $85.86 per month $87.26 per month $88.63 per month $93.96 per month
Capital Improvement Impact on Operating Budget
The City annually prepares a Five Year Capital Improvement Plan (CIP); most recently
adopted for FY15-FY19 this past winter. The items that are scheduled in that plan each
spring become the starting point for budget requests at budget development time. This
year, capital expenditures total over $42 Million. A complete listing of capital project is
included in the Appendix to this budget document. The five largest capital total over $35
Million. They are described below.
Project Amount Operating Budget Effects
Police & Municipal
Court Facility
$22 Million –
construction
At the time we ask voters to approve the
construction bonds, we plan to ask them to
increase our all-purpose levy to support the
added operating and staffing costs of the
facility.
Trails, Open Space,
and Park projects
$10 Million This will fully budget to total expenditures for
TOP bonds. The operating budget does not
include amounts to operate these facilities
outside of our existing Parks staff and budgets.
Landfill Gas
Remediation System
$1.7 Million There will be continued operating costs for this
system that will either be paid from the Post
Closure Monitoring and Mitigation Fund or
the City’s General Fund.
Water Pipe
Replacements
$1.1 Million This project should reduce our annual
operating costs by lowering the need for
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repairs and leak detection on older pipes.
Water Transmission
Line Slip-Lining
Repairs
$1.0 Million This project will not increase our annual
operating costs. It will improve the reliability
of this critical water line.
In Conclusion
We know that there are differences of opinion among our community members and citizens
about how to best prioritize issues such as levels of customer service, financial position and
reserves, and service delivery and expansion. We have worked hard during this past spring
to develop a budget that will move our community forward – and, at the same time,
continue to meet the obligations we have accrued from the past.
This Recommended Budget represents the thoughtful consideration of dozens of staff
members and citizen advisors. We look forward to Commission and community discussions
regarding its improvement and adoption.
Respectfully,
Chris Kukulski, City Manager
Anna Rosenberry, Administrative Services Director
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FINANCIAL SUMMARY ______________________________________________________________________________________________ 297
CHANGES IN FUND BALANCE/WORKING CAPITAL
298
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MILL LEVIES & MILL VALUES
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