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HomeMy WebLinkAboutA3. FY17 Budget General Fund Comm Dev Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Administrative Services Director Chris Kukulski, City Manager SUBJECT: Fiscal Year 2017 (FY17) Budget Work Session General Fund & Community Development Fund MEETING DATE: June 6, 2016 AGENDA ITEM TYPE: Action Item – Budget Work Session RECOMMENDATION: Listen to staff presentations, ask questions, give direction, as you see fit. BACKGROUND: Attached are a Budget Worksheets and other materials regarding our General Fund and Community Development Fund. This information has been prepared to assist us in developing the City’s Final Budget, and is based on what is contained in the FY17 City Manager’s Recommended Budget, available at http://www.bozeman.net/Departments- (1)/Finance/Budgets-and-Financials.aspx. Based on feedback during this work session, and other work sessions held this spring, we intend to prepare the Final Budget resolution. The hearing for adoption of the Final Budget is scheduled for June 20, 2016. General Fund: The City's General Fund is financed primarily by property taxes which provide nearly half of the General Fund revenue. Other revenue sources include: licenses and permits, intergovernmental revenue, charges for services, fines and forfeitures, interest on investments, operating transfers, and miscellaneous revenues. The Worksheet organizes the department information in the following order: 1. City Commission 6. Facilities Management 11. Recreation & Aquatics 2. City Manager 7. Police Department 12. Community Services 3. Municipal Court 8. Fire Department 13. Non-Departmental 4. City Attorney’s Office 9. Parks/Cemetery 14. Transportation 5. Administrative Services 10. Library The information provided in the Worksheets for the General Fund summarize what was presented in the City Manager’s Recommended Budget document. Further information and a Revised Recommendation for the Recreation – Aquatics FTE’s is included with the Recreation Department details in the worksheet. 451 The General Fund Expenditures and the Permissive Medical Levy are both effected by an over- estimation in health insurance costs. This was detected after the CM Recommended Budget was prepared, and is described in detail below. We are recommending that those changes be incorporated into the Final Budget, but they have not been incorporated into the Worksheets for the General Fund. Community Development Fund: The City's Community Development (Planning) Fund is supported by a number of different revenue sources, including a transfer from the General Fund. Other sources of funding include general property tax support, entitlement share, and application fees. There is information in the Community Development Worksheet regarding restricted cash in the Community Development Fund and how that could affect the General Fund’s contribution to the Community Development Fund. Health Insurance and Permissive Medical Levy: We have found that we over-estimated health insurance costs in six divisions in the Recommended Budget: Streets, Solid Waste, Cemetery, Parks, Forestry, and Recreation. Reduce Health Insurance Benefit Expenditures Division Permissive Medical Levy Fund Other Special Revenue Funds Street Maintenance $23,004 Solid Waste 23,004 Cemetery $30,672 Parks 122,688 Forestry 23,004 Recreation 130,356 Total $283,716 $69,012 Effect on General Fund: As a result, line-items for Health Insurance Benefits can be reduced for the Cemetery, Parks, and Recreation. The transfer from Permissive Medical Levy can be reduced by $283,000. The mill levy can be reduced by an estimated 3.21 mills (a reduction in our property tax increase of $11.14/year for the typical resident). Effect on Street Maintenance Fund: Expenditures in the Street Maintenance Fund can be reduced by $23,004. Based on the fact that we expect to run deficits in the Fund for the next 3- years, we are not suggesting that this change our recommended assessment increase of 15%. Effect on Solid Waste Fund: Expenditures in the Solid Waste Fund can be reduced by $23,004. Based on the two-year revenue generated of $200,000, we are not suggesting that this change our recommended rate increase of 2% in FY17 and 2% in FY18. Effect on Tree Maintenance Fund: Expenditures in the Tree Maintenance Fund can be reduced by $23,004. Our recommended assessment increase of 30% this year helped achieve reserve levels of $100,000 by FY19 (that could be relied on to fund mitigation for an Emerald Ash-borer event.) With this reduction in expenditures, we could achieve a reserve level of $94,000 by the end of FY18. Or, a 25% increase could be sought this year, and reserve levels of $100,000 achieved in FY19. 452 FISCAL EFFECTS: Although the Final Budget adoption has far-reaching fiscal effects, there are no immediate fiscal effects as a result of this work session. The funds discussed tonight have proposed budgets with changes in taxes and assessments that will affect all property owners and system users. As presented, the City Manager’s Recommended Budget is projected to have the following effects on the typical City resident. We have shown the revised effect with the Permissive Medical Levy reduction highlighted in yellow. Typical Resident: Annual Increase Recommended Budget Revised Street Maintenance Assessment $22.07 $22.07 Forestry Assessment $5.10 $5.10 Arterial Street Assessment $19.79 $19.79 Property Taxes $48.00 $48.00 **Adjust Permissive Medical Levy (11.14) Water Services $12.36 $12.36 Sewer Services $17.28 $17.28 Storm Water Services - - Annual Increase $124.60 $113.46 Monthly Increase $10.38 $9.45 Attachments: FY17 General Fund Budget Worksheets Community Development Budget Worksheets On File: City Manager’s Recommended Budget for FY17 Report compiled on: May 26, 2016 453 General Fund Budget Worksheet – June 6, 2016 Page 1 of 10 General Fund – Departmental Summary – FY17 Budget Worksheet In February and March of 2016, the City Manager, Assistant City Manager, and Administrative Services Director heard departmental budget requests for the coming fiscal year. Those budget requests were then adjusted to develop a balanced budget accomplishing the adopted CIP, Commission goals and budgetary goals. Below is a listing of the Departments in the General Fund, including some of the larger and more significant items in their Recommended Budget. Departmental information in the City Manager’s Recommended Budget document begins on page 82. A comparison of the FY17 Recommended vs. FY16 Approved Budget is provided for the budget categories: Personnel, Operations and Capital. The City Manager’s (CM) Recommended Budget contains the following General Fund items: 1. City Commission - $205,001 a. 2017 Legislative Session Lobbyist - $25,000 b. Election funding for city-wide Joint Law & Justice Campus ballot questions - $10,000 c. Capital: Computer hardware replacement in Commission Room - $5,000 2. City Manager’s Office - $803,043 (Administration & City Clerk) a. Municipal Code updates - $8,000 b. Annual Ethics Training Development - $3,000 120,416 119,800 117,926 82,075 5,000 - 50,000 100,000 150,000 Personnel Operations Capital City Commission FY16 FY17 635,194 256,097 5,000 676,230 126,413 400 - 200,000 400,000 600,000 800,000 Personnel Operations Capital City Manager FY16 FY17 454 General Fund Budget Worksheet – June 6, 2016 Page 2 of 10 3. Municipal Courts - $770,495 a. The Joint Law & Justice Campus project is an important effort and project for the Municipal Courts. The facility will provide significant work-space increases for the Court Clerks and the Courtroom functions. Because the project is still in its planning stages, we have not included any amounts in the FY17 Recommended budget. Based on the outcome of the November election, we may need to make budget amendments later in FY17 for the construction project. b. County Law & Justice Center Court 1 & Clerk Space, lease amount. $52,325 c. County Law & Justice Center Court 2 Space, lease amount. $26,675 d. Credit card machine transaction charges - $12,000 4. City Attorney’s Office - $1,206,490 a. The Joint Law & Justice Campus project is an important effort and project for the City Attorney’s Office. The facility will provide significant work-space increases for the prosecution function. Because the project is still in its planning stages, we have not included any amounts in the FY17 Recommended budget. Based on the outcome of the November election, we may need to make budget amendments later in FY17 for the construction project. b. Various contracted services related to litigation - $145,000 c. Summer Intern Program - $6,500 538,137 156,638 606,675 163,820 - 200,000 400,000 600,000 800,000 Personnel Operations Municipal Court FY16 FY17 895,505 188,800 962,990 243,500 - 500,000 1,000,000 1,500,000 Personnel Operations City Attorney FY16 FY17 455 General Fund Budget Worksheet – June 6, 2016 Page 3 of 10 5. Administrative Services (Admin, Finance, Treasury, Information Technology, Human Resources) - $2,542,094 a. Added 1.0 FTE: Human Resources Generalist b. Finance – Sungard software maintenance agreements - $73,600 c. Finance – Annual audit – General Fund share $26,780 d. IT – Software Maintenance contracts $125,685 e. IT – CIP GF080: City wide router & switch replacement - $40,000 f. IT – CIP GF229: City Hall ISCSI Storage replacement - $40,000 g. IT – CIP GF062: Replacement of personal computers - $30,000 h. IT – CIP GF246: Additional back-up capacity - $15,000 i. IT – Repair and maintenance tools - $12,000 6. Facilities Management - $1,332,312 a. Professional Bldg.: CIP GF242: Replace rooftop air conditioner- $50,000 b. City Hall: CIP GF130: City Hall site improvement/Phase II- $40,000 c. Site Security analysis – building upgrades - $25,000 d. CIP GF103: ADA compliance improvements - $20,000 e. Library: CIP GF244: Parking lot drainage - $15,000 f. Various Buildings: Install fiber connections in 5 City facilities - $12,500 1,528,097 719,908 135,000 1,741,648 647,686 152,760 - 500,000 1,000,000 1,500,000 2,000,000 Personnel Operations Capital Administrative Services FY16 FY17 456 General Fund Budget Worksheet – June 6, 2016 Page 4 of 10 7. Police Department - $7,263,416 from General Fund (not including state share of retirement costs) a. Added 1.0 FTE: Digital Forensic Examiner. This position will be a city employee, funded in part with contributions from the Missouri River Drug Task Force (MRDTF) and the Gallatin County Sheriff’s office (which also funds part of the existing Evidence Technician.) Total city cost in FY17 is estimated at $25,000. b. The Joint Law & Justice Campus project is an important effort and project for the Police Department. The facility will provide significant work-space increases for police operations. Because the project is still in its planning stages, we have not included any amounts in the FY17 Recommended budget. Based on the outcome of the November election, we may need to make budget amendments later in FY17 for the construction project. c. CIP GF053: Replacement of 2 patrol vehicles & related equipment - $148,500 d. Animal Control, Shelter fees - $132,100 e. Fuel & maintenance costs for all police vehicles - $90,300 f. Uniforms/protective gear - $76,500 g. Services for prosecutions requiring expert consultants - $42,000 268,792 921,857 184,500 247,613 1,039,699 45,000 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 Personnel Operations Capital Facilities Management FY16 FY17 6,065,815 927,013 195,000 6,250,510 864,406 148,500 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 Personnel Operations Capital Police FY16 FY17 457 General Fund Budget Worksheet – June 6, 2016 Page 5 of 10 8. Fire Department - $5,047,296 from General Fund (not including state share of retirement costs) a. Hydrant and water payment to Water Fund - $111,300 b. Engine/Ladder truck fuel and maintenance - $86,920 c. Clothing and Uniforms - $51,000 d. Update Fire Protection Master Plan - $35,000 (share with Fire Impact Fee Fund) e. Fees for various tests and training - $17,200 9. Cemetery - $490,889 a. Cemetery irrigation: water - $30,000. b. Contracted Services for Memorial Day & fall trimming, weed control, etc - $15,000 10. Parks - $2,161,670 a. CIP GF030 - $65,000, Articulating tractor (shared cost with Streets) b. CIP GF251 - $32,000, Park Maintenance and District feasibility study c. CIP GF115 - $24,000, Hybrid Vehicle for Superintendent d. Data collection of various irrigation systems associated with Cemetery irrigation project - $10,000 4,251,869 461,535 - 4,497,966 549,330 - - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 Personnel Operations Capital Fire FY16 FY17 310,759 112,413 50,000 364,420 126,469 - - 100,000 200,000 300,000 400,000 Personnel Operations Capital Cemetery FY16 FY17 458 General Fund Budget Worksheet – June 6, 2016 Page 6 of 10 e. Continuation of Montana Rail Link rail banking the Story Mil Spur - $9,000 f. Landscape Architect services for master plan updates - $7,000 11. Library - $1,868,293 a. Added 1.0 FTE – Bookmobile & Outreach Librarian b. Books & Reference Materials - $187,427 c. Magazine, newspaper, online subscriptions - $63,199 d. Maintenance Contracts - $61,944 e. Library processing materials and supplies - $51,350 f. Professional services for webpage redesign and updates - $17,725 g. Night-time building security services - $7,416 12. Recreation (including Aquatics) - $2,026,743 a. Added FTE’s – Aquatics: The Recommended budget included a total of 3.3 FTE’s added to the Aquatics program: 1.0 FTE Aquatics Assistant Manager and 2.3 FTE’s Lifeguards. This recommendation was developed and advanced in order to try and achieve a number of goals, which we’ll discuss below. We have spent the last weeks further investigating and discussing 844,569 611,277 69,000 1,029,999 692,171 439,500 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 Personnel Operations Capital Parks FY16 FY17 1,261,526 426,235 - 1,404,668 463,625 - - 500,000 1,000,000 1,500,000 Personnel Operations Capital Library FY16 FY17 459 General Fund Budget Worksheet – June 6, 2016 Page 7 of 10 the existing circumstances and challenges at the swimming pools, and we have a revised Recommendation. i. Positions are Vacant: Over the past two years, we have had a very difficult time recruiting and retaining full-time Lifeguards. There are currently 6 full-time lifeguard positions at the pools and we have spent most of the year with less than 4 of the positions filled. When lifeguard positions are vacant, our Aquatics Manager and Assistant Manager are needed to lifeguard in order to keep the facilities open. We believe our recruitment and retention problems are due to the low hourly wage that currently exists for the job. At the time we developed the Recommended Budget, there was a misunderstanding about full-time equivalencies and what needed to be approved by the Commission; as a result, 2.0 FTE’s were incorrectly added to the Lifeguard staffing request in the Recommended Budget. These did not need to be added to the budget. However, we do not believe we will be able to fill Lifeguard positions without an increase in wages for all the positions. We are Recommending $32,000 be added for wages/benefits for Lifeguards. ii. Lifeguard Hours have increased: Hours have been added to our lifeguarding program through both the expansion of “open hours” at the pools and an increased level of lifeguarding necessary for some activities. When enough lifeguards are not on staff, our Aquatics Manager and Assistant Manager are required to lifeguard in order to keep the facilities open. It is recommended that we add 0.46 FTE Lifeguards to the existing staffing. This will still require Managers to fill-in, but can reduce those fill-in hours by as much as 75% (from estimated 1,500+ hours to 400+ hours.) iii. Supervision and Operations Management Needed: The primary duties of our current Aquatics Manager and Assistant Manager are managing both the staff and the operation of the pool facilities. We have a total of roughly 5,408 open hours where at least one of the pool facilities is open. During more than 23% of that time we do not have the Manager or Assistant Manager hours to cover. Adding another Assistant Manager (adding 2,080 hrs. per year) would allow for more coverage, including times when the existing managers are filling- in for Lifeguards, taking accrued leave, in training, etc. It is recommended that we add 1.0 FTE Assistant Aquatics Manager. Current CM Recommended Total Daily Hours Open Swim Center 5408 5408 Bogert 5408 5408 Total Manager Hours - assuming NO vacation or sicke leave, etc. Aquatics Manager 2080 2080 Aquatics Assistant Manager 2080 2080 PROPOSED: Aquatics Assistant Manager 2080 4160 6240 Difference (1,248) 832 % Difference -23%15% Overlaps with Swim Center 460 General Fund Budget Worksheet – June 6, 2016 Page 8 of 10 Summary of Revised Recommendation: Item CM Recommended Revised Recommendation Change from CM Recommendation 1. Lifeguard Wage Change $ - $ 32,000.00 $ 32,000.00 2. Lifeguard FTE Increase of 0.46 FTE $ 57,408.00 $ 11,481.60 $ (45,926.40) 3. Added Assistant Manager 1.0 FTE $ 60,000.00 $ 60,000.00 $ - Net Decrease in CM Recommended Budget $ (13,926.40) b. Added 0.25 FTE: Recreation Leaders – Winter programs c. New Story Mill Recreation Center – building renovations for offices - $105,000 d. Beall Center – CIP GF236: $35,000 wood floor replacement. e. Beall Center – renovations to remove some of the offices to enlarge area for rentals - $25,000, after staff moves to Story Mill Recreation Center f. Swim Center - CIP GF257: $75,000 removable bulkhead, cost to be offset by $50,000 donation from Barracuda swim club. g. Swim Center - $40,000, Repair for HVAC, boilers, chlorinator, UV unit, chemical controller h. Recreation: $10,400, Professional services-nightly security checks, music license agreement, marketing 13. Community Services - $580,312 from General Fund (Includes Economic Development & Sustainability) a. Economic Development i. Fiber conduit capital - $30,000 ii. Fiber conduit policy and specs - $20,000 iii. Foreign Trade Zone development - $5,000 910,395 499,616 25,000 1,237,442 679,301 110,000 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 Personnel Operations Capital Recreation FY16 FY17 461 General Fund Budget Worksheet – June 6, 2016 Page 9 of 10 iv. Marketing Collaborative - $20,000 v. Outside legal counsel - $15,000 vi. Annual partnership on economic profile - $10,000 vii. Economic Development Profile work continued from FY16 - $15,000 b. Sustainability viii. Bozeman Energy Project, Smackdown, BCP web updates - $4,000 ix. Gradient Systems Utility Tracking Software - $7,200 x. Energy Smackdown Website Admin - $6,300 xi. Sustainability sponsored workshops and conferences supplies - $8,000 14. Non-Departmental – $3,443,816 a. Fire/Police State share retirement (non-cash) - $2,403,000 b. Landfill Monitoring - $353,000 (for Post-Closure Fund) c. Liability & property insurance - $350,508 d. Contingency - $150,000 e. Stormwater Loan Payment - $140,000 (transfer to Stormwater Fund) f. City Band - $6,000 296,042 209,015 329,407 250,905 - 100,000 200,000 300,000 400,000 Personnel Operations Community Services FY16 FY17 2,759,508 684,308 2,540,140 294,250 - 1,000,000 2,000,000 3,000,000 Operations Transfers Non-Departmental FY16 FY17 462 General Fund Budget Worksheet – June 6, 2016 Page 10 of 10 15. Transportation - Streamline Support - $140,331 140,331 140,331 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Operations Streets FY16 FY17 463 Community Development Fund Budget Worksheet – June 6, 2016 Page 1 of 3 Community Development Fund – FY17 Budget Worksheet The Community Development Department information begins on page 103 of the City Manager’s Recommended Budget document. In FY14, the “Planning Department” was re-named the “Community Development Department”, and we now refer to the Planning Fund as the Community Development Fund. (The other arm of Community Development operations is the Building Inspection division, with its funding segregated in the Building Inspection Fund.) Expenditures: Personnel costs include the addition of 0.40 FTE for Historic Preservation Officer. Currently, the position exists at 0.60 FTE (part time). This addition would bring the job to a full-time position. Community Development Fund - Expenditures FY11 Actual FY12 Actual FY13 Actual FY14 Actual FY15 Actual FY16 Budget FY17 Recommended Personnel $627,766 $599,264 $643,275 $670,789 $626,090 $780,262 $847,931 Operations $63,375 $49,568 $100,260 $56,939 $160,061 $428,047 $437,941 Capital $- $- $- $8,916 $- $7,500 Total $691,141 $648,832 $743,535 $736,644 $786,151 $1,215,809 $1,285,872 Excluding personnel costs, a total Community Development Fund operating (this year’s budget request has zero for capital) budget of $437,941 is proposed. Attached on the next page, you will find a break-down of the separate areas of the operating budget and a chart representing the same. As you can see, the largest areas of the operating & capital budget are: • Consultants and Professional Services - $340,610 total, including o Community Plan/Growth Policy Update (Long Range Planning Division) - $200,000 $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 Community Development Expenditures Personnel Operations Capital 464 Community Development Fund Budget Worksheet – June 6, 2016 Page 2 of 3 o Community Plan (Operations Division) - $75,000 o Development review contracts - $35,000 o MSU – Historic Building Inventory - $12,000 • CIP CD03 - Upgrades for Computers and laptops - $13,700 Revenues: The Planning Fund is supported by a number of different revenue sources, including a substantial transfer from the General Fund. Over the years, as planning activity fluctuates, application fees and the amount of General Fund transfer change to fund the operation see chart below. During the recession, the General Fund Transfer exceeded the amount of application revenues. The property tax is a fixed 2-mill statutory authorization; it increases as our mill value increases. Similar to our estimates for Building Inspection activity, the FY17 Recommended Budget assumes a continuation of the current levels of planning application activity (subdivision, site plan, CUP, COA, PUD, etc.) This is a significant increase over last year’s estimated revenues. For FY17, we estimate these application fee revenues will be $719,899, or ~$59,991/month. Planning Fund - Revenues FY11 Actual FY12 Actual FY13 Actual FY14 Actual FY15 Actual FY16 Budget FY17 Recommended Application Fees $187,119 $159,858 $317,580 $416,017 $416,017 $461,150 $719,899 Gen Fund Transfer 257,182 331,481 346,935 184,033 184,033 164,228 209,162 Taxes 167,574 165,523 168,102 170,051 170,051 178,125 176,591 State/Grants 96,259 99,515 99,500 106,060 106,060 109,225 108,160 Other 23,186 16,042 20,720 16,070 16,070 16,000 50,694 Total $731,320 $772,419 $952,837 $892,231 $892,231 $722,550 $1,264,506 $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 Community Development Fund Application Fees General Fund Transfer 465 Community Development Fund Budget Worksheet – June 6, 2016 Page 3 of 3 Restricted Revenue & Cash: Since approximately 2007, there has been a portion of Application Revenue that is moved to restricted cash accounts, under adopted fee schedules. This means that it is not available as working capital to pay for day-to-day operations, but is accumulated to be used to fund projects fitting with the restriction. Fees are restricted for: Long Range Planning, Conservation Overlay, Entryway Update, and Technology. When new Application Fees were adopted last April, the fee schedule increased the amounts going into the restricted accounts. Over the past 12 months, we have collected $110,000 in these restricted amounts, bringing the restricted cash balances to: Description Restricted Cash Balance – Estimated April 2016 Conservation Overlay $198,286 Entryway Update *no fee 2015 $ 61,712 Long Range Planning $179,309 Technology Fee *new 2015 $17,733 Total Restricted Cash $457,040 As written, the Recommended Budget does not anticipate any of the expenditures being paid from restricted cash. However, if the Commission chose to do so, items could be funded from these accounts. Doing so could reduce the amount of General Fund Transfer or accumulate more money in the fund’s regular operating cash account. The Community Plan/Growth Policy project (totaling $275,000) could fit with the Long Range Planning account. The computer upgrades ($13,700) could be paid from the Technology Fee. Budget Surplus or Deficit: The Recommended Budget is a small deficit – and will be supported by cash on hand in the Community Development Fund. In the budget document, the Fund’s ending balance has been calculated according to our standard practice for budget preparation. We have assumed that all FY16 Revenues will be received and all FY16 Expenditures will be made. At this point in time, revenues are approximately $150,000 ahead of budget (after restricted cash is set aside) and expenditures are tracking lower than budget, due to vacant positions. Community Development Fund FY13 Actual FY14 Actual FY15 Actual FY16 Budget FY17 CM Rec Revenues $952,831 $892,231 $836,318 $928,728 $1,264,506 Expenditures 743,535 736,645 786,153 1,215,809 1,285,872 Surplus/(Deficit) $209,296 $155,586 $50,165 $(287,081) $(21,366) 466