City of Goodyear. FY 2010/11 Final Budget. City Council Meeting June 14, 2010

Transcription

1 City of Goodyear FY 2010/11 Final Budget City Council Meeting June 14,

2 Agenda Summary of FY 11 Budget Employee Compensation & Benefits Property Taxes & City Sales Taxes FY 11 Revenues & Expenditures FY 11 New Costs and One-Time Uses City Council Discussion/Questions Action on Final Budget 2

3 Other Items Addressed The City s tax situation infers possible property tax increase next year 14 extra firefighters and the un-necessary OT paid to firefighters Goodyear has the highest sales tax as compared to other West Valley cities Goodyear has more City employees per 1,000 residents than any other West Valley city Employees enjoy very generous compensation packages (i.e. 13 paid holidays) and if they took 2 furlough days the City s budget would be relieved by $2 M Over 33 employees have an income of over $100,000 which some citizens feel is overly generous The City Manager is the highest paid City Manager in the West Valley for a city size that is not comparable with other City Manager salaries Continued on Next Slide - 3

4 Other Items Addressed Goodyear has one of the highest tax rates in the Valley Goodyear sales taxes are the second highest in comparison to 14 neighbor cities Food and Beverage tax is the highest in the Valley Construction sales tax is the third highest in comparison to 14 neighboring cities Goodyear raised its fees to do business within the City in the past 2 months Property tax is the 4 th highest in comparison to 14 neighboring cities Why are stadium personnel services doubling in the budget? What is the $200,000 increase for the Mayor and Council budget? 4

5 Other Items Addressed When did we raise the restaurant tax to 4%? Did Goodyear provide the week between Christmas and New Year s off with pay, similar to Peoria? 5

6 FY 2010/11 Budget Schedule October 19 Work Session Financial Forecast Review December 14 Work Session Appoint Citizen s Budget Committee January 11 Work Session - Financial Update Jan. Apr Citizen s Committee Meetings Feb Mar Executive Mngt. Budget Review & Balance CIP April 26 CBC Presentation to City Council May 3 & 10 Work Session Present CBC City Manager Recommendations May 3 Work Session - Present Draft Budget May 17 Work Session Proposed Budget & CIP May 24 Adopt Tentative FY 11 Budget June 14th Hold Public Hearing on Final Budget & Tax Levy Convene Special Meeting to Adopt Final Budget July 12th Adopt Tax Levy 6

7 Goals City of Goodyear Financial Policies Fiscal Conservatism Revenues from growth or development should be targeted to costs related to development Flexibility A long-range capital improvement plan should be prepared and updated each year Best Management Practices Ongoing maintenance costs should be financed through operating revenues, rather than through bonds 7

8 FY 11 Final Budget Totals approximately $255 M Decrease of approximately 32% from $375 M FY 10 Budget $61 M of the Total $255 M is only in event of Improvement District Operating Budget totals $70.8 M Decrease of 2.8% from $73 M FY 10 Operating Budget $2.2 M Reduction in Personnel (21 Frozen Positions), contractual services and commodities FY 11 Capital Improvement Budget totals $25.2 M Decrease of 66% from FY 10 CIP FY 12 CIP budgeted at $7.9 M FY 11 Budget funds core services Incorporates work of Citizen Budget Committee 27 budget recommendations 12 items incorporated as part of FY 11 budget 15 items assigned for further review (cost/benefit, legal analysis) 8

9 FY 11 Final Budget No new debt to General Fund Water Interconnect Project (Adaman) to provide additional supply will require debt service. Project to be funded with bonds paid for by Enterprise fund and Development Impact Fees. No impact to General Fund. Ensures City s Fiscal Stability General Obligation Bonds upgraded from A+ to AA- (Standard & Poor); and from A1 to Aa2 (Moody s) Public Safety Initiatives 911 Communications Facility/Technology Quality of Life Parks & Recreation Historic Goodyear Park Improvements Priority Projects Telephone System Upgrades Public Works Corporate Yard 157 th Ave. Master Plan 9

10 Employee Compensation and Benefits 10

11 FY 11 Final Budget Reduces Employee Compensation & Benefits No Merit or Market Increases to Salaries 3 rd Year without a Merit Increase 2 nd Year without a Market Adjustment Reduces Employee Benefits Suspend Longevity Pay ($104 k) Suspend Health Retirement Savings ($190 k) Suspend Vacation Cash In Program ($116 k) Suspend Criteria based Promotion ($126 k) Continue to Suspend Tuition Reimbursement ($140 k) Keep Reduction to Uniform Allowance (FD) ($92mk) Additional Ongoing Cost Increases Health Insurance (25% increase in employee contribution toward total $5.1 M health care premium) 11

12 Comparison of Other Compensation Programs City Tuition Reimbursement Longevity Pay Compensation above Regular for working on Holidays Avondale Yes Yes Yes Yes Buckeye No No No Yes Chandler Yes No Response No Response Gilbert Yes No Yes No Glendale Yes Yes No No Vacation Cash-In Yes Peoria Yes Yes Yes Yes Phoenix Yes Yes Yes Yes Scottsdale No No Yes Yes Surprise No Yes Yes No Tempe Yes Yes Yes Yes Goodyear No No No No 12

13 Furloughs Implemented Comparison, FY City Avondale Buckeye Chandler Gilbert Glendale Peoria Phoenix Scottsdale Surprise Tempe Tolleson Goodyear (est. $132,872 per day) Mesa Yuma Implemented Furloughs No No No No Yes No Voluntary No No No No No No Yes 13

14 How many furlough days would be required to achieve $2 M? $132,872 Savings from one 8-hour day for all employees 15 days required (incl. taxes and retirement savings) 14

15 Paid Holidays Provided Comparison to other Cities 10 Holidays Avondale Chandler Peoria Scottsdale 11 Holidays Goodyear Tempe Surprise Gilbert 10.5 Holidays Phoenix 11.5 Holidays Glendale 12 Holidays Buckeye 15

16 Employees Base Salaries Approximately 80% of employees below $75,000 > $100, employees (6.5%) $75,000 - $99, employees (13.3%) $50,000 - $74, employees (39.9%) $25,000 - $49, employees (40.3%) 16

17 Goodyear Salary Comparison 10 Benchmark Cities Position Category Goodyear Actual Salary vs. Market Average Exempt Position Average 0.93 Non-Exempt Position Average 0.91 Fire Position Average 0.96 Police Position Average 0.89 Salary Average 0.92 Market Average is average salary paid for benchmark positions in Buckeye, Avondale, Glendale, Peoria, Surprise, Chandler, Phoenix, Tempe, Scottsdale, Gilbert. 17

18 City Manager Total Compensation Comparison to 10 Benchmark Cities Base Salary Deferred Compensation Annual Car Allowance Total Compensation Goodyear $168,000 $16,800 $4,800 $189,600 Average $191,750 $16,979 $6,760 $221,120 Median $185,147 $18,515 $7,200 $210,160 Comparison Cities include Buckeye, Avondale, Glendale, Peoria, Surprise, Phoenix, Glendale, Chandler, Tempe, Scottsdale, Gilbert Data Collected October

19 City Employees Per 1,000 Population Comparison to 10 Cities Gilbert 5.55 Avondale 5.93 Buckeye 6.48 Chandler 6.53 Surprise * 7.03 Peoria* 7.43 Goodyear* 7.82 Glendale** 7.96 Scottsdale* 9.84 Phoenix* Tempe* * Cities with Ballparks; Goodyear is 7.43 without Ballpark Employee per 1,000 Ratio ** Glendale does not staff their ballpark 19

20 Employees Per 1,000 Population City of Goodyear Historical Fiscal Year Population Employee per 1,000 Ratio FY , FY , FY , FY , FY , FY , FY , FY , FY , FY , FY , FY , FY , Currently (May 2010) 64,

21 Population & Authorized Positions ,000 62,554 64,554 59, ,000 55, * 49,813 50, , ,000 35,810 30, ,000 26, , ,000 10, Population Authorized Positions 0 0 *12 positions unfunded as of July 1,

22 FY 11 Taxes 22

23 23

24 Truth in Taxation 2010/2011 Primary tax rate.7603 Secondary tax rate.8397 Total tax rate 1.60 Max. Levy w/out TNT $5,766,951 Max. Levy w/tnt $6,002,998 New Levy Amount Requiring TNT $236,047 24

25 City of Goodyear Property Tax 2009/ /2011 Primary tax rate Secondary tax rate Total tax rate Median Home Value *Source = Maricopa Co. Assessor Average City Property Tax (residential) $208,800 $152,700-26% $334 $244 25

26 History of Council Taxation Policies 1987 Established 2% General Sales Tax Rate for all Classifications Established Transient, Lodging, Dining, and Beverage (TLD&B) Tax TLD&B Added 2% Tax on Hotels, Restaurants, & Bars 1995 Established Two-Tier Tax for Single Item Purchases Greater Than $2, % 1.2% Total 4% Hotel, Restaurant & Bar Tax Rate (Gen Sales 2% + 2%)

27 History of Council Taxation Policies 2001 Removed 2% TLD&B to Conform to Model Tax Code 2005 Tax Policy Task Force Apptd by Council Reduced Combined Prop Tax Rate (per $100 of AV) $2.10 $1.60 Maintained 2% Gen Sales & Food Tax Rates Policy Decision to Retain Total Tax Rate Maintained 4% Restaurant & Bar Rate Increased Total Hotel Tax Rate: 4% 4.5% Total 4% Hotel, Restaurant & Bar Tax Rate (General Sales Maintained Single Item Purchase Tax Rate =1.2% Increased Single Purchase Amount Limit $2,000 $5,000 Increased Constr Sales Tax Rate 2% 3.5%

28 History of Council Taxation Policies 2009 Increased General Sales Tax Rate 2.0% 2.5% 2009 Established Use Tax for Purchases Made Outside State or Unincorporated Areas Increased Total Hotel Tax Rate 4.5% 5.0% Reduced Number of Rental Units for Taxation Maintained Single Item Purchase Limit Tax Rate (1.2%) for Items Greater Than $5,000 3 (or more) 2 (or more)

29 City General Sales Tax Rate Comparison to other Cities General Sales Tax Rate Litchfield Park 2.8% Avondale 2.5% Goodyear 2.5% Tolleson 2.5% Glendale 2.2% Surprise 2.2% Buckeye 2.0% Phoenix 2.0% Tempe 2.0% Peoria 1.8% Mesa 1.75% Scottsdale 1.65% Chandler 1.5% Gilbert 1.5% 29

30 City of Goodyear Existing Tax Rates Comparison to other Cities Sales Tax Ranking Metro Phoenix Rank Overall Rank (95 Cities) General Rate 2 32 Restaurants 1 6 Contracting 3 22 Lodging

31 Tax Collections July 2009 April 2010 Classification Revenue Jul 09 Apr 10 Restaurants $3.40 M 13.3% Retail $9.59 M* 37.5% Hotel $660 k 2.5% Percentage of Total * Reflects Increase.05% Oct 09 31

32 Sales Tax Rates Comparison to other cities 32

33 FY 11 Revenues and Expenditures Summary 33

34 Where the money comes from Fund Balance, $57.8m 23% Proposed ID, $61.m, 23% Development Impact Fees, $7.3m, 3% Intergovernmental $12.2m, 5% Rainy Day - Unreserved FB $16.3m, 6% Bonds, $2.0m 1% Grants, $17.2m 7% User Fees, $24.7m, 10% Taxes & Surcharges, $56.3m, 22% Total Sources $255 Million (Revenues and Fund Balance) 34

35 Where the money goes Contingency, $61.8m 24% Operating, $70.8m 29% "Rainy Day" Fund, $16.3m, 6% Debt Svc, $24.1m 9% Total Uses $255 Million (Expenditures) FY 11 CIP, $25.2m 10% Carry Over, Capital and Onetime $ 56.5m, 22% 35

36 FY 2011 Operating Expenditures by Department Information Technology, $2.4m 3% Public Works, $18.7m 27% Community Development,!1.07m 2% Human Resources, $2.1m,3% Engineering, $2.6m, 3% Finance, $2.6m 4% Stadium, $3.6m 5% Parks & Rec,$2.6m 4% All Other, $5.9m 9% Non-Departmental, $2.8m, 4% Fire,$ 11.3m 16% Police, $13.6m 20% Total $70.8 Million 36

37 FY 2011 Capital Improvement Program Grants, $957k, 4% Utility Impact Fees, $6.4m 25% Non-Utility Impact Fees, $12.7m, 51% General Fund, $5.1m, 20% Total CIP Sources $25.2 Million 37

38 FY 2011 Capital Improvement Program Water Projects, $5,464,572 Wastewater Projects, $2,898,027 Art Projects, $79,000 Public Safety Projects, $5,500,000 Technology Projects, $1,500,000 Parks Projects, $257,029 Total Projects $25.2 Million Street Projects, $3,915,000 Facility Projects, $5,641,160 38

39 FY 11 Budget New Costs & One-Time Uses 39

40 FY 11 Operating Budget New Costs Park & Ride Operating Costs $60k Health Insurance $400k Increase Water Costs/Parks $300k Elections Cost $130k Additional Building Inspector Position $66k Telephone System Operating Costs $60k Total Budget Additions $1.0 M 40

41 FY 11 Budget Initiatives One-Time Uses Purchase of APS Streetlights Fleet Replacement Insurance Reserve Total One-time $.4 M $1.5M $.5 M $2.4M * does not include CIP 41

42 FY 11 Budget Initiatives Purchase of APS Streetlights Matrix Group conducted management assessment in 2007; identified purchase as best management practice D.H. Lighting solutions conducted cost-benefit analysis; study concluded substantial operating cost savings; estimated payback was 2.86 years Presented to City Council July

43 Purchase of APS Streetlights As of April 2010 $420 k Price to purchase system $1.26 M Annual costs for APS Owned and Maintained System $1.01 M Annual costs for City Owned System* $245 k ** Estimated Annual Savings for City Owned Estimated 22 Months to recoup Cost of System Purchase * City to Contract with APS for O/M ** Does not reflect potential cost increases approved by ACC 43

44 FY 11 Budget Initiatives Replacement of Fleet Vehicles 318 vehicles in City Fleet Total Value of $18.7 M* $15.1 General Fund $3.6 M Enterprise FY 11 Budget $1.5 M recommended as part of FY 11 Budget About 6% of Total Value of Fleet $1.1 M for vehicle replacement $.4 M for establishment of reserve fund * Acquisition Cost 44

45 FY 11 Budget Initiatives Replacement of Fleet Vehicles Replacement Scoring system used to determine vehicle replacement Vehicle age and condition determine need At certain point, replacement is most cost effective decision 2002 Police vehicle is 4x maintenance cost per mile compared to 2007 Police vehicle (2002 = $.95/mile; 2007 = $.024/mile) Recommended FY 11 budget is about 6% of total value of fleet 45

46 FY 11 Budget Initiatives Replacement of Fleet Vehicles Replacement FY 11 replacement primarily emergency vehicles What is the mileage of emergency vehicles at time of replacements? Recent salvaged vehicles mileage ranged between 75, ,000 Police Vehicles last purchased 0 vehicles FY vehicles FY vehicles (8 replacement; 15 new) FY

47 Reserve FY 11 Budget Initiatives Replacement of Fleet Vehicles Portion of FY 11 Budget dedicated for reserve Reserve is one method of financing that allows organization to spread out capital cost Establishment of internal fund charge-back system Easier to budget smaller amounts annually vs. large onetime amount Downside is that it is costly to establish 47

48 Police Department Take Home Vehicles 124 Total Vehicles assigned to the Police Department 72 (58%) participate in take-home program Goodyear's take home program primary goals: 1.) Extend the life of the vehicle. 2.) Accountability in maintaining the vehicles. 3.) Police vehicle presence in the neighborhoods/community. 48

49 Fire Department Overtime 49

50 Types of Overtime Fire Department Overtime Scheduled OT Fair Labor Standards Act requires time and a half pay who reach 106 hours Occurs twice in 6-week period Constant Staffing Managed on a daily basis by shift battalion chief Types of constant staffing include spring training, special events, training, Special Assignment Unit work, Wildland Fire Deployment Over last year dramatically decreased use of constant staffing due in large part of closing of FS

51 Fire Department Overtime $800, Constant Staffing $700, $600, $500, /06 $400, $300, /07 07/08 08/09 09/10 $200, $100, $ /06 06/07 07/08 08/09 09/10 51

52 Fire Department Overtime $1,400, Scheduled OT /Constant Staffing $1,200, $1,000, $800, Constant Staffing $600, Scheduled OT $400, $200, $ /06 06/07 07/08 08/09 09/10 52

53 Fire Department Overtime EMPLOYEES VS COST $1,084, $1,314, Cost $792, $813, $794, Employees /06 06/07 07/08 08/09 09/10 *** 0 53

54 Other Items Addressed The City s tax situation does not include a property tax increase next year Additional 14 firefighters have helped reduce cost of constant staffing Goodyear has the second highest sales tax as compared to other West Valley cities Goodyear does not have more City employees per 1,000 residents than any other West Valley city Employees are offered fair and competitive compensation packages; and it would require more than 2 furlough days to achieve $2 M savings 33 employees have an income of over $100,000 The City Manager is not the highest paid City Manager in the West Valley Continued on Next Slide - 5

55 Other Items Addressed Goodyear has one of the highest tax rates in the Valley Goodyear sales taxes are the second highest in comparison to 14 neighbor cities Food and Beverage tax is the highest in the Valley Construction sales tax is the third highest in comparison to 14 neighboring cities Goodyear raised its fees to do business within the City in the past 2 months Property tax is the 4 th highest in comparison to 14 neighboring cities Stadium personnel services increased in the budget as a result of adding a second team The increase in the Mayor and Council budget for FY 11 reflects an accounting transfer for personnel to better reflect cost of business 55

56 Other Items Addressed The restaurant tax was increase to 4% in 1991 Goodyear provided 2 days off with pay (Day after Christmas and New Year s) in FY in lieu of Market and Merit adjustments. City of Peoria provided 4 days off with pay (week between Christmas and New Year s) in FY

57 Actions To Be Taken Tonight Hold Public Hearing on Tax Levy and Final Budget Adoption Approve Truth in Taxation Adopt Resolution- Approving Final Budget 57

58 Where do we go from here? July 12th Adopt Tax Levy 58

59 Questions FY 2010/11 Final Budget City Council Meeting June 14th,