FIVE-YEAR FORECASTS GENERAL FUND, TRANSPORTATION SERVICES FUND, UTILITY FUND, WILLAMETTE VALLEY COMMUNICATIONS CENTER FUND

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1 A G E N D A Joint Meeting of the City of Salem Committee and the Salem Urban Renewal Agency Committee DATE: Wednesday, December 13, STAFF LIAISON: TIME: 6:00 PM Kelley Jacobs, Officer CHAIRPERSON: Raquel Moore-Green kjacobs@cityofsalem.net PLACE: Salem City Hall Ryan Zink, Senior Fiscal Analyst Council Chambers Liberty Street SE rzink@cityofsalem.net 1. CALL TO ORDER Chairperson Raquel Moore-Green 2. ROLL CALL a. Pledge of Allegiance 3. MINUTES a. Minutes from November 6, City of Salem and Urban Renewal Agency Committee Meeting 4. HANDOUT MATERIAL (all items information only) a Five-Year Forecast b. Q4 Financial Report for the City of Salem c. Q4 Financial Report for the Urban Renewal Agency d Q1 Financial Report for the City of Salem e Q1 Financial Report for the Urban Renewal Agency 5. FIVE-YEAR FORECASTS GENERAL FUND, TRANSPORTATION SERVICES FUND, UTILITY FUND, WILLAMETTE VALLEY COMMUNICATIONS CENTER FUND a. Presentation by Deputy City Manager Kacey Duncan b. Discussion and review 6. PUBLIC TESTIMONY FOR FUTURE BUDGET ISSUES The Committee has set aside time for public comment to address items not on the agenda. A total of twelve (12) minutes will be allotted for testimony on future budget issues. Each individual testifying will be limited to no more than three (3) minutes. 7. POLICY DISCUSSION AND OTHER BUSINESS 8. ADJOURN NOTE: staff is available for your convenience to discuss the budget document and process. Please call the staff listed above or if you have any questions. The next scheduled Committee meeting is Wednesday, April 25, 2018 at 6:00 p.m. in the City Council Chambers, 555 Liberty Street SE, Room 240. The City of Salem budget information can be accessed on the internet at: NOTE: Disability-related accommodations, including auxiliary aids or services, in order to participate in this meeting, are available upon request. Sign language and interpreters for languages other than English are also available upon request. To request such an accommodation or interpretation, contact Kali Leinenbach, (503) or kleinenbach@cityofsalem.net at least 2 business days before this meeting. TTD/TTY telephone (503) is also available 24/7. The City of Salem values all persons without regard to race, color, religion, national origin, sex, age, marital status, domestic partnership, disability, familial status, sexual orientation, gender identity and source of income. Agenda Joint Meeting of City of Salem and Salem Urban Renewal Agency Committees Page 1 December 13,

2 M I N U T E S Joint Meeting of the City of Salem Committee and the Salem Urban Renewal Agency Committee FOR THE BUDGET COMMITTEE MEETING OF: December 13, AGENDA ITEM NO.: 3.a. DATE: Monday, November 6, STAFF LIAISON: TIME: 6:00 PM Kelley Jacobs, Officer CHAIRPERSON: Jim Lewis kjacobs@cityofsalem.net PLACE: Salem City Hall Ryan Zink, Senior Fiscal Analyst Council Chambers Liberty Street SE rzink@cityofsalem.net 1. CALL TO ORDER Chairperson Jim Lewis called the meeting to order at 6:00 p.m. Members present Bennett, Kaser, Andersen, Nanke, McCoid, Hoy, Cook, Lewis, Nordyke, Tigan, Sund, Moore-Green, Bassett, Judy, and Milton Members absent Ausec, Hazlett, and Bergmann 2. ROLL CALL a. Pledge of Allegiance by Member Lewis 3. MINUTES a. Minutes from May 15, City of Salem and Urban Renewal Agency Committee Meeting Motion: Move to approve the meeting minutes from the May 15, City of Salem Committee and Urban Renewal Agency Committee Meeting. Motion by: Seconded by: Action: Vote: Aye: Nay: Abstentions: Member Nanke Member McCoid Motion passes Unanimous 4. ELECTION OF OFFICERS a. Chairperson Motion: Move to elect Member Moore-Green as Chairperson of the Committee. Minutes Joint Meeting of City of Salem and Salem Urban Renewal Agency Committees Page 1 November 6,

3 Motion by: Seconded by: Action: Vote: Aye: Nay: Abstentions: Member Nanke Member Hoy Motion passes Unanimous b. Vice-chairperson Motion: Move to elect Member Kaser as Vice-chairperson of the Committee. Motion by: Seconded by: Action: Vote: Aye: Nay: Abstentions: Member McCoid Member Andersen Motion passes Unanimous c. Secretary Motion: Move to elect Member Hoy as Secretary of the Committee. Motion by: Seconded by: Action: Vote: Aye: Nay: Abstentions: Member Bennett Member Cook Motion passes Unanimous 5. HANDOUT MATERIAL a. City of Salem Strategic Plan Update Information only b. General Fund -17 Variance Analyses Information only c. -18 Initiatives Update Information only d. Upcoming Process Plan Information: Minutes Joint Meeting of City of Salem and Salem Urban Renewal Agency Committees Page 2 November 6,

4 1) Proposed process plan changes 2) Proposed alterations to budget document 6. PRESENTATIONS a. City of Salem Strategic Plan Update, Strategic Initiatives Manager Courtney Knox Busch Questions or comments by: Members Milton, McCoid, and Judy b. General Fund Variance Analyses, Deputy City Manager Kacey Duncan Questions or comments by: Members Hoy, Andersen, and McCoid c. Initiatives Update, Deputy City Manager Kacey Duncan Questions or comments by: Members McCoid, Lewis, and Hoy d. Upcoming Process Plan, Deputy City Manager Kacey Duncan Questions or comments by: Members Bennett, McCoid, Cook, Andersen, Moore-Green, Nordyke, and Milton 7. POLICY DISCUSSION Questions or comments by: Member Nordyke 8. PUBLIC TESTIMONY FOR FUTURE BUDGET ISSUES 9. OTHER BUSINESS 10. ADJOURN The meeting was adjourned at 7:11 p.m. NOTE: staff is available for your convenience to discuss the budget document and process. Please call the staff listed above or if you have any questions. I. The next scheduled Committee meeting will be held Wednesday, December 13,, at 6:00 p.m. in the City Council Chambers, 555 Liberty Street SE, Room 240. Respectfully Submitted, Kali Leinenbach The City of Salem budget information can be accessed on the internet at: NOTE: Disability-related accommodations, including auxiliary aids or services, in order to participate in this meeting, are available upon request. Sign language and interpreters for languages other than English are also available upon request. To request such an accommodation or interpretation, contact Kali Leinenbach, (503) or at least 2 business days before this meeting. TTD/TTY telephone (503) is also available 24/7. The City of Salem values all persons without regard to race, color, religion, national origin, sex, age, marital status, domestic partnership, disability, familial status, sexual orientation, gender identity and source of income. Minutes Joint Meeting of City of Salem and Salem Urban Renewal Agency Committees Page 3 November 6,

5 CITY OF SALEM FINANCIAL SUMMARY YEAR END / This financial summary provides year-end results. Notable occurrences are identified, described, and graphically illustrated through budget-to-actual and actual-to-actual comparisons. In addition, many comparisons extend to multiple fiscal years to augment context for activity. Financial Snapshot by Fund Type General Fund Resources and Expenditures Year End M (in millions) Total Revenues = $114.3 M, $28.1 For the Committee Meeting of December 13, Agenda Item: 4. b Total Expenditures by Category = $115.6 M All Others, $9.0 Fees, Licenses, Permits, $4.6 Property Tax, $64.0 Personal Services, $85.9 Materials & Services, $26.1 State Shared, $5.2 Internal Charges, $14.1 Franchise Fees, $17.3 Interfund Transfers, $3.0 Capital Outlay, $0.3 Debt, $0.3 Total Resources (including working capital)= $142.4 M The City s General Fund maintains the services of fire emergency response, municipal court, parks General Fund Expenditures By Department maintenance, police, multi-generational recreation Police Fire Parks and Recreation Library programs, long range and current planning, code Urban Development Community Development enforcement, social services program aid, Salem Public Municipal Court Support Services Library, and the support services that benefit all City Non Dept departments and funds. During revenues $8.9 $4.8 realized in the fund equaled $114.3 million, an increase $29.2 $4.3 over the prior year of 4.8 percent. At year end, $3.7 expenditures equaled $115.6 million, representing a 9.2 $1.7 percent increase over. To offset the imbalance $39.4 of expenditures over revenues, approximately $1.3 $18.6 million of working capital was used. This represents the most significant use of working capital to balance actual year-end expenditures in the General Fund since $ Note: comparisons exclude short-term loans to the Urban Renewal Agency. Fund Quick Reference as compared to the beginning of the fiscal year. Green signifies working capital that has grown or remained constant, while blue is used to signify working capital that has decreased. The "ticker" at the bottom of each page provides a quick view of resources and expenditures through year end. Each fund display includes an "EWC," which represents the ending working capital as of the period ending June 30,. The color of each EWC represents its status General Fund - YE Transportation Fund - YE Streetlight Fund - YE Resources $ 142,388,518 Resources $ 18,474,852 Resources $ 2,442,119 Expenses 115,567,261 Expenses 13,826,292 Expenses 2,210,995 EWC $ 26,821,257 EWC $ 4,648,560 EWC $ 231,124 City of Salem Financial Summary Year End Page 1

6 Financial Snapshot by Fund Type, continued Special Revenue Funds Year End $5.0 $4.0 $3.0 $1.0 $1.2M $954K $935K $595K $669K Beginning Working Capital () Notes Total Resources Total Expense In Millions $17.5 $15.0 $12.5 $10.0 $7.5 $5.0 $2.5 $0.0 $5.0M $5.4M TOT* = Cultural and Tourism Fund Comm. Renew.* = Community Renewal Fund Eco. Impr. Dist.* = Economic Improvement District Enterprise Funds Year End (in millions) WVCC EMS $811K $2.7M Trust Funds Year End Resources $6.8M $5.84 Grants Loan Repay, Interest Transfers Other Funds PRIORS Utility $0.0 $5.0 $10.0 $15.0 Total Expense Total Resources $0.0 $50.0 $100.0 $150.0 $200.0 Enterprise Funds are used for services provided to / for the public on a user charge basis. In the case of the WVCC Fund and PRIORS Fund, the users are other agencies accessing or police records services. The EMS Fund supports the provision of third-party ambulance services in our community. Fund Quick Reference $1.3M $47.0M $0.02 $0.64 $0.02 $0.11 City of Salem Financial Summary Year End Page 2 $0.06 Debt Service Funds for the City of Salem use a voter-approved property tax levy to repay bond indebtedness for improvements to city streets and bridges, as well as construction of new and rehabilitation of existing fire stations and purchase of large fire rolling stock. The Pension Obligation Bond allows the City to pay down its future liability in the public retirement system. City departments include this debt service as part of annual budgets. $14 $12 $10 $8 $6 $4 $2 General Obligation Debt Resources Donations, Other Fees Working Capital YE Expenditures $0.84M Debt Service Year End Pension Obligation Bond Debt Expenditures Airport Fund - YE Comm. Renewal Fund - YE Parking Fund - YE EID Fund - YE Resources $ 2,138,413 Resources $ 2,728,613 Resources $ 2,370,325 Resources $ 33,276 Expenses 1,217,111 Expenses 2,444,464 Expenses 1,701,655 Expenses 33,276 EWC $ 921,302 EWC $ 284,149 EWC $ 668,670 EWC $ -

7 General Fund Revenues Year End and History (in millions) Resource Type 5 Year Trend, - to Year over Year Property Tax In, this revenue source continued to achieve the 3% statutory increase as well as gains from growth. The year-over-year increase was $2.7 million or 4.4%. Franchise Fees Rate increases for refuse hauler fees, ongoing growth in cable TV proceeds, a $105,000 one-time telecomm payment, and gains in utility receipts added more than $510,000 or 3.1% year-over-year for City franchises. $55.0 $56.4 $59.1 $61.3 $64.0 $15.6 $15.6 $16.4 $16.8 $ % 4.4% 3.0% 3.1% State Shared Revenues Alcohol-related shared revenues increased by about $339,400 or 8.9% in. For the category of shared revenues, which also includes cigarette and taxes, the year-over-year change was 7.7%. $4.5 $4.7 $4.8 $4.8 $ % 7.7% Planning-Related Fees As a percentage, yearover-year growth in planning-related fees remains noteworthy at 21.8%. The dollar amount realized from the increase is approximately $130,890. $0.33 $0.40 $0.45 $0.60 $ % 21.8% -1.7% Other Fees User charges for fire protection, code enforcement, lien searches, Center 50+, parks reservations, Salem Public Library, and ambulance service provide increased receipts of $37,887 or 1.3% more than. $2.5 $2.5 $2.6 $2.9 $ % 1.3% Rents a full legislative session and completion of the new parking kiosk and meter installation in the Capitol Mall area delivered more than $529,580 additional revenue in this category for. $1.2 $1.1 $1.3 $1.3 $ % 41.4% Fines All components of this category parking, and court fines experienced some level of yearover-year decrease resulting in an overall decline of 2% or $59,883. $2.5 $2.7 $2.8 $3.0 $ % -2.0% Internal Charges Less-than-anticipated revenues are offset with savings from vacant positions. A lower vacancy rate would have generated additional internal reimbursement revenues. $12.0 $11.8 $12.1 $13.9 $ % 1.2% Other Agencies, Grants, All Other Revenue Year-over-year gains resulting from Homeland Security grant funds, marijuana sales tax receipts, and City proceeds from the sale of state-owned property in the Mill Creek Urban Renewal Area. $4.2 $3.7 $4.6 $4.4 $ % 18.7% Fund Quick Reference Cultural/Tourism Fund - YE Public Art Fund - YE Leasehold Fund - YE Building/Safety Fund - YE Resources $ 5,239,163 Resources $ 62,873 Resources $ 1,263,425 Resources $ 10,321,063 Expenses 4,693,648 Expenses 19,462 Expenses 515,345 Expenses 4,164,564 EWC $ 545,515 EWC $ 43,412 EWC $ 748,080 EWC $ 6,156,499 City of Salem Financial Summary Year End Page 3

8 General Fund by Department Serving the Community Expenditures Year End Community Development $3.66M Personal Services, $3.30M Materials / Services, $0.33M Capital Outlay, $0.02M Interfund Transfers, $5,000 Fire $29.21M Personal Services, $23.70M Materials / Services, $5.44M Capital Outlay, $0.07M Library $4.79M to 97.0% 97.7% Year over Year 6.4% 13.8% A primary focuses of the Police Department this past year has been the recruitment and training of new officers. Once hired, the recruits go through an intensive training program that can take up to a year to complete. This has been a significant undertaking involving the Police Department s Personnel and Training Unit, field training officers and the Human Resources Department. The Police Department currently has an unprecedented 23 recruits in various stages of training, with half scheduled to solo in the next three months. Crime rates have been increasing in the city, as well as across the nation, and these officers will be critical in the department s response to reducing crime while continuing to keep Salem safe. Personal Services, $3.78M Materials / Services, $0.98M Capital Outlay, $0.03M Municipal Court $1.71M Personal Services, $1.25M Materials / Services, $0.45M 97.0% 90.0% 9.4% -1.9% As part of its business retention and recruitment goal, the Urban Development Department responded to 46 inquiries from site selectors with information about locating businesses in Salem and the region. During the year, three companies in Marion County claimed the Enterprise Zone benefit for business expansion totaling $5.7 million in private investment and 58 new jobs. Parks and Recreation $8.90M Personal Services, $4.73M Materials / Services, $3.56M Capital Outlay, $0.05M Interfund Transfers, $0.56 Police $39.37M Personal Services, $31.26M Materials / Services, $7.85M Capital Outlay, $0.06M Interfund Transfers, $0.20M Urban Development $4.27M Personal Services, $2.81M Materials / Services, $1.33M Interfund Transfers, $0.14M Info Technology $6.77M Personal Services, $5.50M Materials / Services, $1.22M Capital Outlay, $0.05 Support, Non-Dept $16.89M Personal Services, $9.57M Materials / Services, $4.96M Debt Service, $0.28M Interfund Transfers, 8M Short-term URA loans removed from comparison 98.9% 98.1% 84.0% 97.9% 89.1% 16.0% 8.3% 7.2% 10.3% 2.4% In, the Salem Fire Department was awarded the Emergency Management Performance Grant (EMPG) through the Federal Emergency Management Agency for the eighth consecutive year. The EMPG provides reimbursement to the department for eligible expenses related to emergency management. The award for the fiscal year totaled $120,585. Since the initial award of the EMPG, the department has been reimbursed for over $750,000 to support the Emergency Management program. A mid-year reorganization brought the Police Department s Downtown Enforcement and Mental Health teams under the same command allowing the department to leverage existing resources and partnerships with outside agencies in the fight against homelessness. While homelessness continues to be an issue, the Downtown Enforcement team has partnered with Salem Housing to find housing for more than 20 homeless individuals. A sergeant, who was added to the Mental Health Response team, has built partnerships with Salem Health, the Marion and Polk Service Integration Teams, and Homes for Heroes to provide services to veterans and others in needs. Fund Quick Refer- General Debt Fund - YE Capital Improve. Fund - YE Extra Capacity Fund - YE Dev. District Fund - YE Resources $ 18,175,731 Resources $ 70,423,753 Resources $ 23,734,885 Resources $ 2,363,448 Expenses 17,591,289 Expenses 35,034,504 Expenses 4,373,143 Expenses 294,882 EWC $ 584,442 EWC $ 35,389,250 EWC $ 19,361,742 EWC $ 2,068,565 City of Salem Financial Summary Year End Page 4

9 Resources for Other Funds Year End and History (in millions) Serving the Community The City Attorney s Office, in conjunction with Human Resources / Risk Management, resolved 17 claims filed in court against the City over the past year. Those claims sought a combined total of approximately $16 million in alleged damages. In many of the cases, the plaintiff, if successful would have been eligible to recover attorney fees, which are in addition to the alleged damages. Six of the cases were settled resulting in total payment to claimants in the amount of $336,837. The City prevailed at trial in three cases, and eight more cases were dismissed, resulting in no liability for the City. Based on the combined amount sought, through the work of the civil litigator and risk manager, the City avoided potential liability exceeding $15.5 million over the past year. In addition, the civil litigator concluded seven civil forfeitures recovering more than $660,000, and resolved two claims by the City, resulting in recovery of $36,324. $4.0 $47.02 $8.22 $5.33 $3.35 Building and Safety Fund Resources $10.32M Utility Fund Resources $145.02M $11.41 $26.93 $42.74 Water Rates Sewer Rates Stormwater Rates Utility Franchise Internal All Other Revenue Beginning Working Capital $6.0 $3.0 $ % $4.0 $0.0 $ Building permits Electrical permits Mechanical permits Plumbing permits Other permits All other revenue Beginning working capital Transportation Services Fund Revenue from Gas Tax $8.46 $8.54 $8.99 $9.16 $9.47 $9.66 Self Insurance Fund $41.89M Charts and Graphs in Millions $14.18 TOT* Fund Comparing the Tax and Working Capital $2.24 $2.45 $2.73 $3.13 $3.61 $3.94 $0.65 $0.56 $0.88 $1.27 $1.22 $ *TOT Fund = Cultural and Tourism Fund TOT Revenues Working Capital $ $2.13 $1.78 $0.55 Medical Dental Liability Insurance Working Capital $19.71 Vision Workers' Comp All Other Revenues Fund Quick Reference Utility Fund - YE Emergency Svcs. Fund - YE WVCC Fund - YE PRIORS Fund - YE Resources $ 145,020,127 Resources $ 3,526,233 Resources $ 10,918,306 Resources $ 1,692,129 Expenses 102,127,274 Expenses 685,467 Expenses 9,889,532 Expenses 260,572 EWC $ 42,892,853 EWC $ 2,840,766 EWC $ 1,028,775 EWC $ 1,431,557 City of Salem Financial Summary Year End Page 5

10 Other City Funds Expenditures Year End Expenditures Year End Airport $1.22M Personal Services, $.39M Materials / Services, $0.79M Capital Outlay / Debt Svc, $0.04M to Year over Year (YOY) Expenditures Year End to Year over Year (YOY) Building and Safety $4.16M 62.5% 27.8% Personal Services, $2.34M Materials / Services, $1.02M 85.8% 22.2% Interfund Transfers, $0.8M Capital Improve. $35.03M Materials / Services, $34.02M Capital Outlay, $0.97M Interfund Transfers, $0.04M 39.5% 19.5% City Services $10.30M Personal Services, $2.55M Materials / Services, $5.82M Capital Outlay, $0.13M Interfund Transfers, $1.80M 81.2% 21.6% Comm. Renewal* $2.44M Materials / Services, $2.35M Debt Service, $0.97M YOY change = debt payment 58.4% -39.3% Development Dist $0.29M Materials / Services, $0.29M YOY change = expenses increasing by $149, % 102% Downtown Parking $1.70M Materials / Services, $1.08M Interfund Transfers, $.62M YOY change = capital reserve transfer Eco Improv Dist* $0.03M 78.0% 54.2% Materials / Services, $0.03M Economic Improvement District Fund 90.6% is fully expended as of year-end % Emergency Services $0.69M Personal Services, $0.39M Materials / Services, $0.29M 87.4% Equip Replacement $2.96M -4.9% Materials / Services, $9,679 Capital Outlay, $2.95M 59.9% 104% Extra Cap. Facilities* $4.37M Materials / Services, $2.56M Capital Outlay, $1.77M Interfund Transfers $0.04M *Extra Capacity Facilities, SDCs 18.5% -41.6% Leasehold $0.52M Materials / Services, $0.32M Interfund Transfers, $0.20M 38.8% -24.8% PRIORS* $0.26M Materials / Services, $0.26M *Police Regional Records System Self Insurance $25.69M 15.7% Personal Services, $0.73M 74.4% Materials / Services, $24.95M 64.4% 2.0% Streetlight $2.21M Materials / Services, $1.38M Interfund Transfers, $0.83M YOY change = capital project and repayment to Transportation transfers 92.6% 56.4% Transportation Svcs $13.83M Personal Services, $5.03M Materials / Services, $7.25M Capital Outlay $0.44M Interfund Transfers, $1.10M 82.5% 15.9% TOT* $4.69M Materials / Services, $2.17M Interfund Transfers, $2.52M *Cultural and Tourism 93.6% 28.8% Trust $0.84M Materials / Svsc, Cap. Outlay, $0.74M Interfund Transfers, $0.10M YOY change = expense for a developer pass-through in 25.6% -77.7% Utility $102.13M Personal Services, $29.94M Materials / Services, $32.06M Capital Outlay $0.68M Debt Service, $25.78M Interfund Transfers, $13.67M 90.4% 19.9% WVCC $9.89M Personal Services, $8.32M Materials / Services, $1.57M 92.3% 1.8% City of Salem Financial Summary Year End Page 6

11 About Other City Funds In the Other City Funds data on pages 5 and 6, downward pointing arrows and negative percentages in the Yearover-Year change column reflect, in some cases, a plan for the fund to lower expenses and it coincides with the budget. The Emergency Medical Services and Trust funds are examples. For a number of the smaller funds a yearover-year increase or decrease is not a lot of money, but due to the size of the fund it is a big percentage. As an example, the Leasehold Fund had expenses of $684,948 in versus $515,345 in, creating a change of 24.8 percent. The same thing happens to the positive with a 102 percent increase year-over-year, the Development District Fund expended about $149,000 more in. One City fund remains with a watch list status. The Willamette Valley Communications Center Fund, which supports the provision of services, will continue to be closely monitored to determine the effectiveness of corrective actions that have been implemented. The Economic Improvement District Fund is fully expended and closed as of June 30,. Reporting on prior year activity will continue to be included in the City s budget for two years. SERVING THE COMMUNITY Public Works / Construction Projects Patterson Street NW Waterline Improvements. Over 1,100 feet of new 8-inch ductile iron water main was installed to replace undersized and deteriorated water lines in the vicinity of Patterson Street NW. The project also installed new fire hydrants and water services in the area. Construction Waste Processing and Transfer Facility. Construction was completed and the facility became fully operational in May. The new facility dewaters street sweepings, excavation debris, and other leafy and soil debris associated with operating public stormwater facilities. It also provides features for receiving septic tank waste from private companies, as well as a location for the City to store and recycle construction materials. Willow Lake WPCF Cogeneration Facility Upgrade. Design began on a new power facility which utilizes methane gas generated from the City s wastewater treatment process. Portland General Electric provide $3 million based on the potential energy savings that may be realized from this project. Construction of the facility is scheduled to begin in fall Willow Lake Wastewater Pollution Control Facility is located on approximately 45 acres in northwest Keizer. The facility treats all wastewater from Salem, Keizer, and the Turner areas. Kuebler Boulevard SE and Mill Creek Drive SE Traffic Signal Improvements. Construction was completed on a new traffic signal to serve new businesses and increased traffic at the Mill Creek Corporate Center. Year End Capital Construction Expenditures $39.70M 31% 5% 37% 3% 15% 5% 0% 2% 2% Streetlight Conversion Project. Construction continued on the replacement of existing high pressure sodium luminaires with new light emitting diode (LED) luminaires. LED streetlights use approximately 50 percent less energy, last four times longer, and improve reliability over the previous HPS fixtures. Over 8,000 streetlights will be replaced with this project. Airport, 6M Info Tech, $0.71M Parks, $5.87M Transportation, $14.88M Streetlight, $1.88M Historic Facilities, $0.92M Misc Projects, $0.62M Public Safety, $1.16M Utility, $12.13M Fund Quick Reference City Services Fund - YE Self Insurance Fund - YE Equip. Reserve Fund - YE Trust Fund - YE Resources $ 16,380,789 Resources $ 41,889,479 Resources $ 9,692,086 Resources $ 6,783,596 Expenses 10,301,210 Expenses 25,687,914 Expenses 2,958,932 Expenses 839,748 EWC $ 6,079,579 EWC $ 16,201,565 EWC $ 6,733,154 EWC $ 5,943,847 City of Salem Financial Summary Year End Page 7

12 $15.0 $10.0 $5.0 $0.0 $3.0 $1.0 $8.0 $6.0 $4.0 $3.0 $1.0 $6.0 $4.0 $4.0 $3.0 $1.0 $0.80 $0.60 $0.40 $0.20 City of Salem Riverfront Downtown URBAN RENEWAL AGENCY FINANCIAL SUMMARY YEAR END Fund 265 / Capital Improvements Resources 5 Year Trend Expenditures through Fairview Industrial North Gateway West Salem Mill Creek McGilchrist South Waterfront $1.46 M recovery in working capital Working capital only, no longer collecting tax increment $1.5M short-term borrowing in 2nd Street redevelopment project funded Mill Creek reservoir construction project funded Project expenses funded by working capital to Year-over-Year 20.7% 8.4% 3.52% 26.2% 34.7% 19.3% 2.5% For the Committee Meeting of December 13, Agenda Item: 4. c -43.6% Expenses of $2,348,758 in vs $4,167,966 in 341% Expenses of $192,156 in vs $43,577 in 398% Expenses of $2,340,201 in vs $469,704 in 197% Expenses of $451,142 in vs $151,753 in 224% Expenses of $812,439 in vs $250,549 in -4.0% Expenses of $526,890 in vs $548,670 in -3.4% Expenses of $11,916 in vs $12,333 in Financial data for Salem s seven active urban renewal areas is included with this summary report. The Fairview Urban Renewal Area (URA) is no longer collecting tax increment, and a special levy was not imposed in for the North Gateway Urban Renewal Area. Year-to-year expenditure variances as illustrated on this page -15.8% generally relate to the timing and completion of projects within the URA. This report also includes summary financial information for the Salem Convention Center By the Numbers Fund 265 / Capital Improvements Total Resources $28.17M Total Expenditures $6.68M Fund 220 / Debt Total Resources $28.32M Total Expenditures $9.71M Serving the Community The Urban Renewal Agency funded $2.62 million in grants and loans to help businesses locate and expand in the City s Fairview, West Salem, North Gateway, and Riverfront Downtown urban renewal areas. During, Urban Renewal Agency funds supported more than $1.26 million in transportation system improvements including signal work at Union / Commercial streets and a left turn lane removal in the Riverfront Downtown URA, ongoing work on Kuebler at the Parkway in the Mill Creek URA, and design of improvements to 12th Street in the McGilchrist URA. Urban Renewal Agency Financial Summary Year End Page 1

13 Urban Renewal Area Status $8.0 $6.0 $4.0 URA Debt Service Payments In Millions North Gateway, $1.50 Riverfront Downtown, $7.38 Riverfront Downtown Fairview The Tax Allocation (Capital) Improvement Fund, with financial data appearing on page 1 of this summary, provides for the use of proceeds from bonds or short-term loans to fund a variety of improvement projects to spur redevelopment in an urban renewal area. A second Urban Renewal Agency Fund, the Tax Allocation Bond Debt Fund, provides for the receipt of tax increment revenue, which is derived from an increase in property values during the life of an urban renewal area. The tax increment revenue is used to repay the debt that supports the urban renewal area s redevelopment projects. And to collect the tax increment, the urban renewal area must have debt. The graphics below provide a five year history of tax increment collections in Salem s urban renewal areas and the debt repayment for. through URA Tax Revenue Comparison Riverfront Downtown Fairview Industrial Park North Gateway West Salem Mill Creek Industrial Park McGilchrist South Waterfront West Salem, $0.62 Mill Creek Industrial Park, $0.20 debt payments for the Salem Urban Renewal Agency totaled $9.71 million. Of this amount, just over $4 million was used for repayment of long-term indebtedness. The balance of debt service was paid on short-term borrowings in three of the four URAs represented in the above chart Riverfront Downtown, North Gateway, and Mill Creek. Short-term borrowings create the required indebtedness allowing tax increment revenue to be available for improvement projects. STATUS AT A GLANCE North Gateway West Salem Mill Creek McGilchrist Salem Convention Center (SCC) and Gain / Loss Reserve Resources through for the SCC Fund were $5.14 million with expenditures of $4.25 million for convention services and food and beverage sales and the annual transfer to the Gain / Loss Reserve. While year end expenditures in the SCC Fund did not exceed fund resources, expenses did exceed budget authority. One cause of this issue is a reporting lag from the convention center operators to the City s accounting staff. The solutions to prevent a reoccurrence of this imbalance are easily implemented. In 2018, appropriation authority will be transferred from contingency well in advance of the fiscal year closing. For upcoming fiscal years, more appropriation authority will be requested at budget adoption for the fund. The Gain / Loss Reserve opened the fiscal year with beginning working capital in excess of the reserve target at $4.3 million. With revenues of $354,737 and SCC project expenses of $262,688 funded by the reserve, working capital increased $92,049 by year end. Urban Renewal Agency Financial Summary Year End Page 2 South Waterfront Maximum Tax Collected Special Levy Imposed Ceased Tax Levy Long Term Debt Short Term Debt Debt Retirement

14 CITY OF SALEM FINANCIAL SUMMARY Through Q1 / 2018 The summary of 2018 first quarter (Q1) financial activity displays expenditure information at the department level for the General Fund and resources displayed by type. For all other City funds, data is displayed with resources and expenditures. For all funds, the display includes columns noting comparison to budget and prior year actual activity. A positive number in the prior year comparison denotes an increase in GENERAL FUND Resources through Sept 30 As a Percent of Difference 2018 to Property Tax $ 66,640,750 $ 247, % 24.3% Franchise Fees 17,060,320 1,195, % -2.4% Internal Charges 16,316,070 3,991, % 15.0% Other Taxes 401, % 0.0% State Shared 5,278, , % -31.7% Fees, Permits 4,563,330 1,054, % 10.1% All Others 7,840,800 1,709, % -19.8% Beginning Working Capital 26,430,480 26,821, % -4.6% TOTAL RESOURCES $ 144,531,080 $ 35,435, % -3.5% Expenditures by Department through Sept 30 As a Percent of Difference 2018 to City Manager's Office $ 1,283,710 $ 288, % 14.3%, Finance, Purchasing 3,866, , % -3.8% Community Development 4,430, , % -5.9% Facilities Services 4,191, , % 3.4% Fire 31,274,460 7,353, % 3.5% Human Resources 1,572, , % 8.1% Information Technology 8,023,030 1,641, % 17.4% Legal 2,290, , % 10.6% Library 4,965, , % -1.4% Mayor and Council 229,840 31, % -44.5% Municipal Court 1,976, , % -0.5% Non Departmental 8,429,690 1,188, % 8.5% Parks 6,935,900 1,847, % 24.7% Police 43,043,310 9,425, % 5.6% Recreation Services 2,245, , % 23.5% Urban Development 5,224, , % -9.9% TOTAL EXPENDITURES $ 129,982,570 $ 27,930, % 5.6% For the Committee Meeting of December 13, Agenda Item: 4. d BY THE NUMBERS Resources First quarter receipts are typically low. Current year Property Tax has not been collected. The year-over-year increase relates to the payment of prior year (late) taxes. Other sources, like Franchise Fees and State Shared Revenues lag until year end. Beginning Working Capital the funding available at the start of the fiscal year equals almost 75.7 percent of total resources through Q1, and is 4.6 percent less than. Year-to-year decreases of 2.4 percent to 31.7 percent in several revenue types are indicative of the timing of payments fewer monthly payments have been received within Q1 than during the same period last year, or there is no funding comparable to the $651,160 Homeland Security grant received in August of in All Others. Internal Charges include the indirect cost allocation plan, reimbursements for labor and overhead from other funds, and fund-to-fund transfers. The 15 percent gain is related to a 12 percent year-over year increase in the budget for this revenue category. By the Numbers Expenditures With 25 percent of the fiscal year complete, including 6 payroll periods (representing 23 percent of periods for the year), expenditures are trending as anticipated. The 5.6 percent year-over-year increase in total is influenced by anticipated cost escalators, such as labor contract / market adjustments to salaries, PERS rate increases, and health benefits expense. Differences are also influenced by changes in position vacancy rates and the timing of materials and services expenses. City of Salem Financial Summary 2018 Q1 Page 1

15 OTHER FUNDS 2018, Q1 RESOURCES EXPENDITURES By the Numbers through Sept 30 As a Percent of Difference 2018 to through Sept 30 As a Percent of Difference to Transportation Services 8,072, % 6.6% 3,847, % 24.3% Streetlight 695, % -22.9% 273, % -46.7% Airport 1,332, % -2.5% 186, % -22.9% Community Renewal 522, % 45.2% 280, % -6.7% Downtown Parking 1,174, % -18.5% 356, % 102.2% Economic Improv. District - 0.0% % - 0.0% % Cultural and Tourism 1,690, % -19.8% 1,264, % 12.3% Public Art 47, % 18.1% 1, % % Parking Leasehold 874, % 6.7% 71, % 40.2% Building and Safety 7,949, % 16.4% 1,092, % 48.7% General Debt 1,878, % -36.3% - 0.0% 0.0% Capital Improvements 39,976, % -18.1% 3,643, % -71.1% Extra Capacity Facilities 21,758, % 16.2% 480, % -19.1% Development Districts 3,271, % 71.3% 83, % % Utility 72,104, % 3.5% 18,070, % 6.0% Emergency Services 3,060, % 5.3% 154, % 5.9% WVCC* 3,805, % 14.2% 2,339, % -3.1% PRIORS** 1,531, % 5.7% 54, % 44.8% City Services 8,369, % 0.1% 1,851, % -1.0% Self Insurance 23,103, % 10.5% 6,580, % -14.4% Equipment Replacement 7,585, % 29.8% 566, % -42.9% Trust and Agency 8,089, % 43.1% 181, % 38.2% *Willamette Valley Communication Center ** Police Regional Records System Resources Beginning working capital accounts for $154.8 million or 71.4 percent of the $216.9 million total resources reported in the above table for all other City funds. To begin 2018, actual working capital exceeded the budget by $6.8 million or 4.6 percent. At the first quarter mark in the fiscal year, total resources equal 52.3 percent of the amount anticipated in the 2018 budget for this grouping of funds. Expenditures The eight yellow-highlighted funds include employees and the direct costs associated with their employment. The eight funds have a total of full-time equivalent (FTE) authorized positions, approximately 42 percent of the total FTE count for the City in the 2018 budget. The General Fund supports the remaining FTE positions. Of the $41,379,450 in total actual expense through September 30 documented in the above table, $12.29 million or 29.7 percent is personal services expense. Materials and services purchases supplies, equipment, and services equal $23.6 million or 57 percent of total expenses. Three funds the Utility Fund, Self Insurance Fund, and Capital Improvement Fund account for $17 million of the $23.6 million total. City of Salem Financial Summary 2018 Q1 Page 2

16 Urban Renewal Agency of the CITY OF SALEM Debt Service Fund Resources and Expenditures through Sept 30 As a Percent of 2018 to through Sept 30 Percent of 2018 to Riverfront Downtown $ 2,357, % -25.0% $ - 0.0% 0.0% Fairview - 0.0% 0.0% - 0.0% 0.0% North Gateway 11,079, % 14.4% - 0.0% 0.0% West Salem 1,319, % 72.0% - 0.0% 0.0% Mill Creek 2,362, % 31.1% - 0.0% 0.0% McGilchrist 1,186, % 124.3% - 0.0% 0.0% South Waterfront 438, % 161.1% - 0.0% 0.0% TOTAL FOR FUND $ 18,743, % 16.5% $ - 0.0% 0.0% Capital Improvements Fund Resources and Expenditures through Sept 30 RESOURCES RESOURCES As a Percent of Difference 2018 to through Sept 30 For the Committee Meeting of December 13, Agenda Item: 4. e Summary through Q1 / 2018 This By the Numbers summary of -18 ( 2018) activity for the period ending September 30, provides a brief update of the Urban Renewal Agency s seven active areas and the Agency-owned Salem Convention Center. For the comparisons to budget and prior year activity a positive percentage denotes 2018 results are greater. EXPENDITURES Resources Difference As a Difference EXPENDITURES As a Percent of Difference 2018 to Riverfront Downtown $ 10,884, % 47.7% $ 433, % -29.5% Fairview 2,183, % -5.3% 3, % -33.0% North Gateway 4,618, % -10.6% 539, % -36.4% West Salem 1,293, % -25.1% 84, % -28.7% Mill Creek 532, % -38.8% 90, % 88.5% McGilchrist 1,988, % -20.1% 37, % 15.7% South Waterfront 484, % -1.3% 2, % 27.3% TOTAL FOR FUND $ 21,987, % 7.7% $ 1,191, % -28.6% For Urban Renewal areas with a negative number in the Resources column, which compares 2018 data with the same period in the prior year, the cause is lowered working capital. This is not a concerning result as funding is intended to be made available to be spent on projects. Expenditures For this same period in, project expenses were $477,176 or 28.6 percent greater in the URA Capital Improvements Fund. Salem Convention Center Fund and Convention Center Gain / Loss Reserve Resources for the Salem Convention Center Fund include working capital of $888,452 and revenues from food sales and equipment and room rentals of $330,522 for a total of $1,218,974. Through the period, $397,766 has been posted as the cost of providing convention services. The Convention Center Gain / Loss Reserve* initiated the fiscal year with beginning working capital of $4.4 million. Interest postings through the quarter added $16,556. Expenses of $816 were incurred through September 30 for banking fees and a study to potentially expand the convention center. *A reserve established to cover any operational losses none have occurred since opening the convention center and / or for capital improvements (e.g., expanded kitchen). Most resources for both funds (above) are beginning working capital as no taxes have been collected, and short-term borrowings, which provide additional resources for capital projects, have not occurred. Expenses in the Capital Improvements Fund for the Riverfront Downtown URA include streetscape murals and tool box grants. Through Q1, the North Gateway URA has supported improvements to Portland Road ($210,780) and streetscape enhancements ($87,395), and granted $199,140. Urban Renewal Agency Financial Summary 2018 Q1 Page 1