FY Proposed Budget and Plan of Municipal Services. August 12 th, Presented by Robert Camareno, Interim City Manager

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1 FY Proposed Budget and Plan of Municipal Services August 12 th, 2013 Presented by Robert Camareno, Interim City Manager 1

2 City Council Policy Direction Budget developed following City Council policy direction provided at retreat Continue to reduce/eliminate the use of General Fund fund balance for recurring expenditures Maintain existing service levels Scrutinize operating expenditures and look for opportunities to reduce costs and/or increase efficiency Evaluate opportunities for new/increases to user fees Goal achieve greater cost recovery and remain competitive Address Police staffing issues 2

3 FY Proposed Budget Priorities and Challenges Maintain 30% fund balance reserve Maintain current bond rating Bring recurring revenues and expenditures into balance Begin preparing for loss of sales tax revenue from Ashley Furniture (occurs in FY ) Full year funding of salary increases and 10 new General Fund positions authorized in FY (funded for partial year) Adequately fund debt service for capital projects (2013 Certificates of Obligation) Increasing demand for services Retaining and attracting quality employees 3

4 Debt service requirements 2013 Bond Program Future Year Budget Priorities and Challenges $86 million over the next five years 2014 potential debt issuance public safety, infrastructure and golf course Employee Compensation Market adjustments Pay for performance Revisions to Police and Fire step pay plan Review of Fire Department assignment pay requested but not funded 4

5 Future Year Budget Priorities and Challenges Continue to address Police staffing issues Walnut Avenue and Fischer Park annual operation and maintenance requirements Equipment replacement program reinstatement No Facilities Maintenance Fund reserves Potential for rising health care costs Unmet needs $11.4 million of identified unmet needs in FY ($9.8 million in General Fund departments) 5

6 Future Year Budget Priorities and Challenges Expand efforts to identify and evaluate: Operational efficiencies Process improvements Potential cost reductions Methodologies Performance measurement Policy review and development Continued comprehensive budget review Organizational reviews Best practices research 6

7 Future Year Budget Priorities and Challenges Tools Customer surveys Business process mapping Staff interviews On-site observation visits Financial analysis 7

8 FY Proposed Budget TOTAL CITY BUDGET (expenditures) General Fund Enterprise Funds Debt Service Fund Special and Other Funds Capital Improvement Funds $135.6 Million $ 46.4 Million $ 11.2 Million $ 11.6 Million $ 18.3 Million $ 48.0 Million 8

9 FY Proposed Budget Summary FY Proposed Budget is structurally balanced Recurring revenues meet recurring expenditures Eliminates the use of fund balance for recurring expenditures in General Fund Maintains a 30% fund balance in General Fund Proposes revenue enhancement options Proposed property tax rate increase (debt service and operations and maintenance General Fund) Increases public safety (Police) staffing levels Continues to focus on enhancing delivery of capital projects 9

10 FY Proposed Budget Summary Continues funding Police and Fire Step Plan pay increases Proposes a one-time payment for non-uniform employees Fully funds positions and salary increases authorized in FY (funded for partial year) Operating expense budgets effectively remain flat in General Fund Maintains current level funding for streets and drainage repairs and maintenance Suspends the vehicle and computer replacement program Proposes utilizing alternative funding sources for capital improvement projects and equipment 10

11 General Fund FY Proposed Budget 3 new Police Officers New Positions $425,000 includes vehicles and equipment Proposed additions will bring police force to an authorized 107 sworn personnel Including proposed additions, Police force will have increased by 24 officers or 29% since 2006 Capital Projects Division One Capital Project Manager and one Construction Inspector Funded from project proceeds $164K includes vehicle and equipment 11

12 FY Proposed Budget Employee Compensation Includes full year funding of annual Step Plan pay increases for Police and Fire uniform employees ($125,000) One time payment of $500 (minus taxes) included for non-uniform employees ($125,000) Provided to employees that meet or exceed a defined level of performance Will not become a part of annual salary No pay for performance included No market adjustments or cost of living increases included for any staff 12

13 FY Proposed Budget City is self-insured Employee Healthcare Amounts paid in health benefits are funded through contributions from the City and employees Recently evaluated proposals from major carriers Recommendation to change to Aetna on tonight s agenda Should result in savings (depending on claims) Premiums proposed to remain at current levels for both City and employees Plan design changes will be necessary 13

14 FY Proposed Budget Utilization of Alternative Funding Sources Facilities Maintenance Fund using all remaining funds to complete projects Equipment Replacement Fund 3 police vehicles; lemons replacement contingency Capital Improvement Funds various capital improvement projects and equipment Child Safety Fund security improvements at Westside Community Center and Library Hotel/Motel Tax Fund Balance - Wayfinding sign improvements PEG Fund Broadcast technology related enhancements including Civic/Convention Center 14

15 General Fund Expenditures FY Compared to FY FY General Fund Proposed Budget is $291,700 or 0.6% less than FY Amended Budget Amended Budget FY Proposed FY Percent Change General Fund Total Expenses ($ in Millions) $46.7 $46.4 (0.6%) Reconciliation: FY includes a $691,000 river settlement FY suspended vehicle and computer replacement program contribution ($800,000) New initiatives proposed in FY Net effect budget increases by $399,000 or 0.9% 15

16 5,000,000 4,500,000 4,000,000 General Fund Maintaining Reserves General Fund Budgeted Fund Balance Drawdown Total Drawdown Recurring Expenditures 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - FY FY FY FY FY FY Proposed 16

17 22,000,000 20,000,000 General Fund Maintaining Reserves Actual Fund Balance Drawdown History Fund Balance 30% Reserve 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 FY Actual FY Actual FY Actual FY Actual FY Est. FY Proposed Budget 17

18 General Fund Expenditures Summary FY Operating Budgets Operating expenditures remain essentially flat in FY in comparison to the FY budget (with few exceptions) Increase in funding for traffic control and signaling Professional development to maintain certifications Current staffing levels maintained in other departments 3% turnover included in budget for normal attrition Vacancies are being closely managed City Manager approval required before vacancies can be filled 18

19 General Fund Expenditures Summary FY Operating Budgets Includes funding for new positions and salary increases authorized in FY ($380,000) Funding for street repairs and maintenance remains at current levels ($1.5 million) Very limited capital and equipment expenditures included in General Fund Utilizing alternate sources of funding 19

20 General Fund Expenditures Summary Suspension of the Vehicle and Computer Replacement Program No contribution into fund or scheduled replacements Until reinstatement, vehicles and computers will only be replaced if absolutely necessary Reduced General Fund Expenditures by approximately $800,000 (tax rate equivalent cents) Public Safety vehicles represent approximately 68% of the current fleet Under current replacement schedule, 43 vehicles, 33 of which are for public safety are scheduled for replacement in next two years Program continues for Fire Department self contained breathing apparatus and Enterprise Funds fleet 20

21 General Fund Expenditures Summary FY Proposed Budget additional costs: Description Amount 3 Police Officers (including vehicles and equipment) $ 425,000 Incremental funding - 10 new positions authorized in FY $ 210,000 Incremental funding - salary increases authorized in FY $ 170,000 Police and Fire uniform employees step plan pay increase $ 125,000 One time payment for non-uniform employees $ 125,000 Bus Service (total match estimate - $210,000) $ 70,000 Total $1,125,000 21

22 General Fund Expenditures FY General Fund Budget Total Expenditures = $46,431,098 by Strategic Priority Quality of Life 12.6% Growth and Development 5.5% Public Safety 57.5% Effective Management 12.6% Infrastructure 11.8% 22

23 General Fund Revenue Assumptions General Fund FY Projected Revenue Growth over FY Estimate: 5.3% growth in property values Sales taxes - 6.1% Franchise taxes 2.4% Building permit revenue 3% Fines and Forfeitures no growth projected. Current year estimate projected to not reach budget Parks and Recreation - 3.6% 23

24 General Fund Revenues Proposed User Fee Modifications Evaluate opportunities for new/increases to user fees Goal achieve greater cost recovery and remain competitive User fees that currently do not recover costs and/or are below our comparator cities have been identified as opportunities for additional revenue $426,500 in new revenue included in FY General Fund Proposed Budget. 24

25 General Fund Revenues Proposed User Fee Modifications Projected User Fee Revenue Environmental Health: Restaurant and other $70,000 inspections Platting/Zoning Related Fees 25,000 Ambulance Recovery Fees (reimbursement from state and federal funding) 250,000 Aquatics Daily Admission Fees 80,000 Taxi/Wrecker Renewal 1,500 General Fund TOTAL $426,500 25

26 FY Proposed Budget Development Strategy Revenues - User Fee Modifications $150,000 in new revenue included in the FY River Activities Fund from parking fees Revenues are estimated details not finalized River Activities Fund Major Revenue Sources FY Actual FY Estimate FY Budget River Management Fee $186,595 $205,250 $205,250 Parking Revenue ,000 General Fund Transfer 470, , ,567 General Fund transfer reduced by $188,000 26

27 General Fund Revenues Property Tax Proposed Operations and Maintenance Property Tax Increase of 1.29 cents generates $525,000 to support: Additional incremental funding for three Police positions added in FY and funded for partial year ($100,000) Full year funding of three additional Police Officer positions (salary, benefits, equipment and vehicles) recommended in FY ($425,000) 27

28 FY Proposed Budget Revenues FY General Fund Budget - Total Revenue = $46,128,105 Sales Tax 35.3% Other Taxes and Franchise Fees 17.4% Licenses and Permits 4.7% Charges for Services 6.2% Fines and Forfeitures 2.2% Parks and Recreation 2.4% Miscellaneous 3.1% Property Tax 26.2% Proposed User Fee Changes 0.9% Interfund Transfers 1.5% 28

29 FY Proposed Tax Rate 2013 Property Values Total values Total increase $4.334 billion 6.0% increase $245.5 million From new construction $165.5 million 67% of total increase From existing properties $80 million 33% of total increase 29

30 FY Proposed Tax Rate Current Total Tax Rate cents per $100 valuation Proposed Total Tax Rate cents Increases cents or 7.3 percent from FY Annual impact on average taxable home value of $134,808: $46.20 ($3.85 per month) 30

31 FY Proposed Tax Rate Proposed Debt Service rate cents Increases cents or 10.8% from FY Rate covers full debt service costs including 2013 certificates of obligation Proposed Operations and Maintenance Rate cents Increases 1.29 cents or 4.8 percent when compared to FY FY proposed operations and maintenance rate is cents less than it was in FY

32 FY Tax Rates $0.80 $0.70 $0.60 $0.50 FY Proposed Tax Rate Comparator Cities FY Proposed cents $0.40 $0.30 Current cents $0.20 $0.10 $0.00 Average Rate: cents 32

33 FY Proposed Tax Rate $0.60 City of New Braunfels Tax Rate General Fund Rate Debt Service Rate Total Tax Rate $0.50 Tax Rate $0.40 $0.30 $0.20 $0.10 $- 33

34 FY Proposed Tax Rate General Fund Debt Service Total FY Rates $ $ $ FY Rates $ $ $ FY Rates $ $ $ FY Rates $ $ $ FY Rates $ $ $ FY Rates $ $ $ FY Rates $ $ $ FY Rates $ $ $ FY Effective Rate $ FY Rollback Rate $ FY Proposed Rates $ $ $

35 Proposed Tax Rate Impact Average home taxable value: $134,808 Annual levy from current tax rate ( cents): $630 Annual levy from proposed tax rate ( cents): $676 Current Proposed Difference Operations and $363 $379 $17 Maintenance Debt Service $268 $297 $29 Total $630 $676 $46 35

36 FY Proposed Budget Enterprise Funds Airport $2.07 million proposed budgeted expenditures Revenues and expenditures driven by fuel sales For the first time, budget includes transfer from Airport to General Fund for administrative services and contribution for debt service Revenue included for payment from General Fund for CTTC and ground lease 36

37 FY Proposed Budget Enterprise Funds Civic/Convention Center $670,000 proposed budgeted expenditures Expenditures funded with rental revenue and contribution from the Hotel/Motel Tax Fund Establishment of a facility reserve proposed including some sponsorships ($150,000) Fee modifications/increases developed for Council consideration 37

38 Golf FY Proposed Budget Enterprise Funds $579,000 proposed budgeted expenditures In FY , staff will be funded by four different sources - NBIDC, Golf Fund, debt proceeds and the General Fund Reduced operating expenditures in FY due to planned golf course renovation 38

39 FY Proposed Budget Enterprise Funds Solid Waste $7.9 million proposed budgeted expenditures Current service levels maintained 2% increase in customer growth expected For the first time, contribution to debt service for Public Works facility Includes catch up contribution from Solid Waste fund balance Rate modifications proposed to continue commercial revisions to equalize rates and begin roll-off container program 39

40 Council Retreat Policy Direction Continue to reduce/eliminate the use of General Fund fund balance for recurring expenditures FY Proposed Budget is balanced without using fund balance for recurring expenditures Maintain existing service levels Services funded at current levels Scrutinize operating expenditures and look for opportunities to reduce costs and/or increase efficiency Identified opportunities incorporated in proposed budget 40

41 Council Retreat Policy Direction Evaluate opportunities for new/increases to user fees $576,500 in fee increases/additions included Address Police staffing issues Three additional officer positions recommended for FY

42 Budget Communication Public Budget document and presentations Copies filed with City Secretary and Library City website Employees Updates from departmental staff Budget meetings with Interim City Manager 42

43 Dates Requirements Sunday, August 11 Publication of Effective and Rollback Tax Rates, Statements and Schedules. Monday, August 12 Submission to Council of Effective and Rollback Tax Rates, Statements and Schedules Submission and Presentation of FY Proposed Budget Council discusses tax rate and, if proposed rate will exceed the rollback rate or effective rate (whichever is lower), recorded vote is taken. Council sets time and date of public hearings on the FY Proposed Budget and the time and date of the meeting to discuss the tax rate. August 13, 14, 15, Council work sessions on FY Proposed 19, 20 Budget. 43

44 Dates Requirements Sunday, August 18 Notice of Public Hearing on the FY Proposed Budget Wednesday, August 21 Notice of Public Hearings on Tax Increase Thursday, August 29 First Public Hearing on the FY Proposed Tax Rate; schedule and announce meeting to adopt tax rate. Public Hearing on the FY Proposed Budget. Tuesday, September 3 Second Public Hearing on the Proposed Tax Rate; schedule and announce meeting to adopt tax rate First Reading of Ordinance to adopt the Budget. First Reading of tax ordinance. 44

45 Dates Requirements Sunday, September 1 Notice of Tax Revenue Increase published (if needed) Monday, September 9 Council adopts FY Proposed Budget; second reading of budget ordinance; ratifies property tax revenue increase reflected in the budget (if needed). Meeting to Adopt Tax Rate; second reading of tax ordinance (must be between 3 and 14 days after Second Public Hearing. 45

46 Budget Schedule Council Work Sessions Summary Tuesday, August 13 General Fund Wednesday, August 14 Hotel Occupancy Tax Fund and Convention and Tourism Fund Thursday, August 15 Monday, August Bond Program Tuesday, August 20 46

47 Budget Schedule Summary Public Hearings Thursday, August 29 Tuesday, September 3 Budget Adoption First Reading Tuesday, September 3 Second Reading Monday, September 9 47

48 FY Proposed Budget and Plan o-f Municipal Services Questions? Presented by Robert Camareno, Interim City Manager 48