Preliminary Biennial Budget 2011 / 2012

Transcription

1 Preliminary Biennial 2011 / 2012 City of Destiny

2 Biennial City Council Mayor Marilyn Strickland Deputy Mayor Jake Fey David Boe Marty Campbell Joe Lonergan Spiro Manthou Ryan Mello Lauren Walker Victoria Woodards City Manager Eric A. Anderson Finance Director Robert K. Biles Assistant Finance Director Jeff F. Litchfield Finance Department & Research Division Staff: Gregory M. Klump, Manager Sandy Buchanan Cindy Cusick Teresa Green Linda Honeycutt Ebony Peebles-Wilder Mary B. Reddin Tanya Robacker The is in Compliance with Section 504 of the Vocational Rehabilitation Act of 1973 and does not discriminate on the basis of handicaps in any of its programs or services.

3 Table of Contents Introductory Letter...I Introduction Organizational Chart... 1 Executive Staff... 2 Mission, Vision, Strategic Goals and Guiding Principles... 3 Major Staffing s... 4 Personnel Summary... 7 Financial and Policies... 9 Revenue Estimated Revenue Detail for General Fund Estimated Revenue Detail for Non-General Funds City Total Revenue Expenditure Summary General Fund Expenditures Chart Total of s Estimated Expenditures General Fund General Fund Summary by Department General Fund Department / Division Detail City Manager Community Economic Development Finance Fire Government Relations Hearings Examiner Human Resources Human Rights & Human Services Legal Legislative/City Council Library Municipal Court Police Public Works - General General Fund Total Special Revenue Funds Courts Contingency Fund Streets Fire Right-of-Way Street Local Improvement District Guaranty Fund Paths and Trails Fund Building & Land Utilization Emergency Medical Service Fund Tourism & Convention HR & HS Community Economic Development Library HALO Police FWDA Special Revenue Legal Special Revenue Cable TV Human Resources Special Revenue i

4 CMO Special Revenue Grant Traffic Enforcement Engineering & Education Special Revenue Funds Total Debt Service / Capital Project Funds Voted Bonds Non-Voted GO Bonds CTED PWTF Loans LTGO Refunding LTGO Series A Debt Service Total Bond Issue Capital Projects Fund Police Facility Parking Garage Capital Projects LTGO Bond A LTGO Bonds D Capital Project Funds Total Enterprise Funds Airport Fund CED Permit Services Tacoma Eastern Railroad Fund Thea Foss Waterway Authority Parking Garages Convention Center & Bicentennial Pavilion Cheney Stadium Tacoma Dome Operating Performing Arts Solid Waste Wastewater Surface Water Union Station Tacoma Rail Tacoma Water Tacoma Power & Click Tacoma Power Self-Insurance Claim Tacoma Power Low Income Assistance Total Enterprise Funds Internal Service Funds Finance and Research Business System Improvement Project Human Resources 5036-TQM Graphic Services Fund TPU Fleet Service Youth Build Tacoma Equipment Rental Operation Fund Asphalt Plant Fund Communications Equipment Third Party Self-Insurance Program Claims Self-Insurance Unemployment Compensation Self-Insurance Worker s Compensation/Ind. Insurance Municipal Buildings Acquisitions & Operations Information Systems Total Internal Service Funds ii

5 Trust & Agency Funds Deferred Compensation Trust Tacoma Employees Retirement Relief and Pension - Police Relief and Pension - Firefighters Health Care Trust Fund Group Life Trust Fund Finance 415 Excess Compensation 6450-EX Dental Fund Health Care Trust Fund Firefighters Health Care Trust Fund - Police Law Enforcement Support Agency Fund Public Facilities District Fund Total Trust & Agency Fund City Total Expenditures iii

6

7 Organizational Chart 1

8 Incorporated: January 4, 1884 City Charter: Adopted November 4, 1952 The City operates under a City Council-Manager form of government. The Council consists of an elected Mayor and eight elected Council members, (from five Council member districts and three at-large). All serve four-year terms. The Council appoints the City Manager to administer the City s day-to-day operations. The City Manager works with the City departments to carry out the policies adopted by the City Council. Executive Staff Eric Anderson, City Manager Reynaldo Arellano Tansy Hayward Elizabeth Pauli Ryan Petty Robert K. Biles Ronald Stephens Randy Lewis Rod Kerslake Joy St. Germain Linda Villegas-Bremer Michelle Lewis-Hodges Don Ramsdell Michael Combs Richard E. McKinley Susan Odencrantz Deputy City Manager & Chief Information Officer Assistant City Manager City Attorney Community Economic Development Director Finance Director Fire Chief Government Relations Officer Hearing Examiner Human Resource Director Interim Human Rights & Human Services Director IT Director Police Chief Public Assembly Faculties Director Public Works Director Tacoma Public Library Executive Director PUBLIC UTILITIES The Public Utility Board is the governing body for Tacoma Public Utilities. Board members are appointed by the City Council for overlapping five-year terms and serve without pay. The Board sets policy for all activities related to supplying customers with electricity, water and rail freight switching and appoints the Director of Utilities. Certain business, such as the budget and rates, also require City Council approval. Listed below is the executive staff for Public Utilities. William A. Gaines Dale W. King Theodore C. Coates Linda McCrea Director of Utilities / Chief Executive Officer Tacoma Rail Superintendent Tacoma Power Superintendent / Chief Operating Officer Tacoma Water Superintendent 2

9 Our Mission: We provide high-quality, innovative and cost-effective municipal services that enhance the lives of our citizens and the quality of our neighborhoods and business districts. Our Vision: Tacoma is a livable and progressive international city, regarded for the richness of its diverse population and its natural setting. Our Strategic Goals: A safe, clean and attractive community A diverse, productive and sustainable economy A high-performing, open and engaged government Our Guiding Principles: Service Integrity Accountability Respect Stewardship Innovation Teamwork We provide customer-focused municipal services that produce the highest level of value, results and satisfaction. We behave in an ethical and honest way that furthers the principles of good government. We are answerable for our individual and collective conduct and performance. We treat each other and those we serve with courtesy, consideration and regard. We are good guardians of the public resources entrusted to us. We find new and better ways of conducting business and providing services. We build success through collaborative and inclusive approaches to organizational and community issues. 3

10 Major Staffing s Fund 0010 General Fund: The biennial budget includes a Public Works reorganization that moves many positions to Funds outside of the General Fund. This reorganization represents a majority of the reduction in full time equivalent (FTE) counts in General Fund. Other reductions in FTEs are due to vacancy reductions or cost allocation changes which realign FTEs with the appropriate departments. All changes are outlined in the departments descriptions below. We expect these changes to allow the City to respond to these challenging economic times by reducing the use of resources and increasing efficiencies while still providing consistent service levels throughout the organization. City Manager One Management Analyst has been proposed to support the Office of Sustainability, a function which was created to protect and enhance Tacoma s environmental quality and livability. Community Economic Development (CED) CED did eliminate four vacant positions, but added back four to support Building and Land Use Services (BLUS) and Permit Services which now fall under CED. The reduction in 0.7 FTEs was given up to help fund the Management Analyst in City Manager Department. Finance One vacant Customer Service Assistant and one part-time skilled intern have been eliminated in Finance due to vacancy reductions as an overall strategy to reduce personnel costs. Fire One vacant lieutenant position was eliminated. In addition, one Fire Chief Deputy and a quarter of the Fire Department Manger were allocated to the Emergency Management Fund. Human Resources One vacant Human Resource Assistant was eliminated. In addition, 0.65 FTEs were cost allocated to the City s Risk Management Funds. Legal Seven vacant positions have been eliminated for a total of 6.5 FTEs, including two Legal Interns, one Assistant City Attorney, two Deputy City Attorneys, one half-time Paralegal and one Administrative Assistant. Library 1.9 FTE s have been removed from the budget by eliminating three part-time Pages and one full-time Senior Page. Municipal Court While there is a total reduction of 16.6 FTEs for , 9.5 of these are transfers to the Traffic Enforcement Fund and 3.3 are transfers to the Parking Fund due to the Public Works reorganization. 1.8 FTEs transferred to the Municipal Court Special Revenue Fund, 1.0 FTE transferred to the IT Fund, and one vacant Court Clerk position has been eliminated for cost reduction. Police While there is a total reduction of FTEs for , of these are FTE transfers to the Traffic Enforcement Fund due to the Public Works reorganization. 6.0 FTEs transferred to the Police Special Revenue Fund. Also included is the elimination of six non-commissioned vacant positions. Public Works FTEs have reduced in Public Works have been transferred as follows: FTEs to Street 1060, 37.7 to Permit Fund 4110, 10 FTEs to Parking Fund 4140, and 1.9 FTEs to Facilities Fund The remaining 33.4 FTES represented mostly by 46 positions, were made up of vacancy reductions. In addition to these General Fund changes, it is anticipated that an additional eleven positions will be removed prior to the beginning of the biennial budget implementation. Fund 1020 Municipal Court Special Revenue: s in allocation methodology shifted two positions into this fund. Fund 1060 Street Arterial/Engineering/Maintenance/Construction: Public Works reorganized and transferred FTEs to Fund 1060 for Street Maintenance, Engineering, and Construction. Remaining differences were reductions due to changes in allocation methodologies. 4

11 Fund 1090 Fire Department Special Revenue: One new position is added. Fund 1100 Property Management/Street Vacations: s in allocation methodology. Fund 1145 PW Building & Land Utilization: The Public Works reorganization caused 9.9 FTES to be transferred from this Fund to Permit Fund 4110, and the remaining 3 positions were eliminated for vacancy reductions. Fund 1155 Fire EMS: s in allocation methodology shifted 3.25 FTE into this fund. Fund 1185 Human Rights & Human Services and Funds Fund 1195 Tacoma Economic Development Grant: These special revenue accounts are primarily for grant related projects. Positions for these funds are dependent on grant monies and are adjusted accordingly as funds are available. Fund 1236 Finance HUB and LEAP (HALO): The LEAP portion of this Fund was moved into its own Fund 1500 and consolidated in the Human Resources Department. Two positions moved to the new Fund Fund 1267 Police Special Revenue: s in allocation methodology shifted 8.25 FTEs into this fund. Fund 1431 Municipal Cable TV: s in allocation methodology shifted 0.6 FTEs out of this fund. Fund 1500 Human Resources Local Employment and Apprenticeship Training Program (LEAP): Two positions transferred in from Fund 1236 LEAP. Fund 1650 Traffic Enforcement: One new position is created for this new Fund, and the remaining changes are transfers from other Funds. Fund 3211 Capital Projects REET: In response to declining REET revenues, one position has been eliminated and the remaining changes are transfers to other Public Works programs. Fund 4110 Permit Services: Positions have been transferred in from other Funds as part of the Public Works reorganization to start this new Permit Fund. Fund 4120 Mountain Rail: due to realignment in cost allocations. Fund 4140 Parking: 6 new positions and the remainder transferred in from other Funds to start this new Parking Fund. Fund 4165 Convention Center Operating: Five vacant positions have been eliminated. Fund 4170 Cheney, 4180 Dome and 4190 Performing Arts: due to realignment in cost allocations. Fund 4200 Solid Waste: due to realignment in cost allocations. Fund 4300 Wastewater & Fund 4301 Surface Water: due to realignment in cost allocations. Fund 4500 Rail: Position eliminations as an overall strategy to reduce personnel costs. Fund 4600 Water: Position eliminations as an overall strategy to reduce personnel costs. Fund 4700 Power: Position eliminations as an overall strategy to reduce personnel costs. Fund 5007 Finance Department: due to realignment in cost allocations. Fund 5042 Graphic Services: due to realignment in cost allocations. Fund 5400 Fleet: Previously unfilled positions have been eliminated. Fund 5453 Public Works Asphalt: due to realignment in cost allocations. Fund 5540 Communications Equipment: Previously unfilled positions have been eliminated. Fund 5550 Third Party Liability and 5570 Workers Compensation Funds: due to realignment in cost allocations. Fund 5700 Municipal Buildings: s due to realignment in cost allocations. 5

12 Fund 5800 Information Technology: Three previously unfilled positions have been eliminated, one position was transferred in, and the remaining changes are due to realignment in cost allocations. Fund 6050 Deferred Compensation, Fund 6100 City Costs for TERS, and Fund 6430 Health Care Trust: s due to realignment in cost allocations. 6

13 Personnel Summary General Fund City Manager Community Economic Development Finance Fire Government Relations Dept Hearing Examiner Human Rights/Human Services Human Resources Legal Legislative Library Municipal Court Police Public Works Total General Fund 1,458 1, ,220.8 Special Revenue Funds Court Arterial Street - PW Engineering Fire Dept Property Management/Street Vacations LID Guarantee PW Paths & Trails BLUS Operations & Safety Fire EMS HR & HS (CC Ref & Crim Justice) CED HALO Police Municipal Cable TV Human Resources Special Revenue Traffic Enforcement 32.0 Total Special Revenue Funds Construction Funds Capital Projects - REET Funded Total Construction Funds Enterprise Funds Airport Operations CED Permit Services Mountain Rail Thea Foss Waterway Parking Garages Convention Center Cheney Tacoma Dome Performing Arts Solid Waste

14 Personnel Summary Enterprise Funds (continued) PW Waste Water PW Surface Water Tacoma Rail Tacoma Water Tacoma Power 798 1, ,057.0 Total Enterprise Funds 1,770 2, ,062.7 Internal Service Funds Finance Dept & Research Grant Writing / Fund-raising BSIP Project Graphic Services TPU Fleet Services Equipment Rental Service Asphalt Plant Comms Equipment - Replacement Reserve Third Party Liability Self Insurance - Worker's Comp/ Ind Ins Facilities Operations & Telecommunications Information Technology Total Internal Service Funds Trust & Agency Funds Deferred Compensation Trust City costs for TERS Relief & Pension - Police Relief & Pension - Firefighters Health Care Trust - Labor Management Total Trust & Agency Funds Grand Total 3,668 4, ,

15 Financial and Policies The Financial and Policy Statement assembles all of the City s key financial policies in one document. These are the tools intended to ensure that the City is financially able to meet its immediate and long-term objectives. Most of the policies represent long-standing principles, traditions, and practices that have guided the City in the past and helped produce the City s current economic resurgence. The is accountable to its citizens for the use of public dollars. A balance must be struck between sources and uses of public dollars so the public can realize the full benefits of a fiscally sound government. All activities supported by the City must function within the limits of the financial resources provided to them. We recognize that our financial policies are applied over periods of time extending well beyond the current budget period. Thus, expenditures cannot exceed available resources over the long term. The City exists to provide high quality services. This cannot be accomplished if we allow long-term deficits or choose to support ongoing needs through one-time revenues. BUDGET AND CONTINGENCY POLICIES To ensure that financial stability is maintained, a budget showing that revenues and other financing resources meet or exceed expenditures/expenses will be prepared and adopted by the City Council. A fiscally sound budget will include the following: An adopted budget that will fund recurring operating expenditures/expenses with recurring operating revenues. The Contingency Fund will be funded at the beginning of each biennium in an amount not to exceed $3 million but not less than $1 million. General Fund revenue and expenditure forecasts will include 2 biennia beyond the proposed budget period for a total of a six-year forecast. The projection will provide insight into whether the current mix and level of resources are likely to continue to be sufficient to cover current service levels and to provide for long-term strategic planning. The City-operated utilities should show positive net operating results. RESERVE POLICIES General Policy Statement There are three principle reasons for building cash reserves: Large, unexpected one-time expenditures/expenses are more easily funded from reserves. A reserve mitigates the effects of an economic downturn or other unanticipated events on revenue growth. A weak economy will slow revenue growth relative to expenditures/expenses. Reasonable cash reserves are needed to maintain favorable credit ratings. General Fund Unreserved fund balance should be maintained between 5% and 15% of projected annual expenditures. Ideally the City should have a total unencumbered reserve equal to 10% of projected annual expenditures. Any proposed use of the reserves below 5% of projected annual expenditures will require super-majority (majority plus one of voting members) approval by the City Council. 5% to 10% of reserves shall only be available to fund one-time emergencies, unanticipated expenditure requirements, or offset unanticipated revenue fluctuations occurring within a fiscal year. 9

16 The next 10% to 15% of reserves is a counter cyclical reserve. This portion of the reserve is to either maintain General Fund current service level programs or transition expenditure growth to match slower revenue growth during the first months of a recession. Utility Working Cash Balances City-owned utilities will maintain working cash balances in the following amounts: Utility Tacoma Power Tacoma Water Tacoma Rail Tacoma Wastewater Tacoma Surface Water Tacoma Solid Waste Minimum Working Cash Balances Equal to: 63 days of budgeted expenses 45 days of budgeted expenses 35 days of budgeted expenses 60 days of budgeted expenses 60 days of budgeted expenses 60 days of budgeted expenses REVENUE POLICIES Service demands require that an adequate revenue stream be maintained. A diversified and stable revenue structure will be maintained to shelter the City from fluctuations in any single revenue source. City funds will be prudently invested to provide for sufficient liquidity to meet cash flow needs and then to provide interest earnings. All idle cash will be continuously invested. The following will serve as guidelines for maintaining the City s revenue stream. The City will seek to avoid dependence on temporary or unstable revenues to fund basic municipal services. The City will work to ensure that it receives its fair share of available state and federal revenues. The City will actively protect current revenues received from State and Federal sources. The City will actively oppose state and federal legislation that will mandate costs to the City of Tacoma without providing a revenue source to offset those mandated costs. The City will diligently collect due revenues and ensure compliance with revenue regulations. User fees to the extent appropriate for the character of the service and its user should recover full costs, including all direct costs, capital costs, department overhead, and citywide overhead. The City will seek opportunities to generate revenues by providing services to other local jurisdictions and will ensure the City is fully compensated the actual cost of service provision. ACCOUNTING AND FINANCIAL REPORTING POLICIES The City will maintain its accounting records in accordance with state and federal law and regulations. ary reporting will be in accordance with Washington State budget laws and regulations. The City will annually report its financial condition and results of operations in accordance with state regulations and Generally Accepted Accounting Principles (GAAP). As an additional, independent confirmation of the quality of the City s financial reporting, the City will annually seek to obtain the Government Finance Officers Association (GFOA) Certificate of Achievement in Excellence for Financial Reporting for the City s Comprehensive Annual Financial Report (CAFR). The CAFR will be presented in a manner designed to clearly communicate to citizens about the financial affairs of the City. In 10

17 addition to the citywide CAFR, each utility with outstanding bonded indebtedness shall prepare a separate, audited Component Unit Financial Report (CUFR). Reports outlining the status of revenues and expenditures/expenses shall be done monthly and will be distributed to the City Council, City Manager, Director of Public Utilities, department directors, and any interested party. AUDIT POLICIES The City s Comprehensive Annual Financial Report (CAFR) will be audited annually by the Washington State Auditor s Office as required by State law. In addition to the annual audit of the CAFR, each utility fund with outstanding revenue bonds will receive a separate audit of their Component Unit Financial Report by an audit firm with industry expertise in their industry. The City will also contract for other external audits when deemed necessary for the City s operations. Audit advisory, oversight and liaison functions are the responsibility of the Government Performance and Finance Committee. The Committee will be supported in these functions by an Audit Advisory Board consisting of the four members of the Government Performance and Finance Committee, two members appointed from the Public Utilities Board, and one citizen member. DEBT POLICIES The has adopted the following Debt Policies, which are intended to apply to all forms of long-term debt, including voted bonds, non-voted bonds, revenue bonds, interfund loans, and conduit debt. The intent of the Council is that the City shall manage its long-term debt in a manner designed to utilize its credit to optimize City services while balancing overall debt levels and annual debt service obligations. The City recognizes that prudent use of its credit can both facilitate construction of essential capital improvements and serve as a method for sharing the costs of those improvements between current and future beneficiaries. General Policies Debt Not to be Used for Operating Expenses: When considered necessary, long-term debt may be used to provide for capital acquisitions and construction. Long-term debt will not be used to fund operating expenses except in extraordinary circumstances as authorized by the City Council. This policy recognizes that some City staff costs such as project engineers are integral to the capital project and are reasonably chargeable to bond fund proceeds. Term of Debt: Long-term debt will be structured in a manner so that the life of the debt does not exceed the expected useful life of the asset being funded by the debt. To the maximum extent possible, the City will fund its capital needs on a pay-as-you-go basis. Method of Sale of Bonds and Notes: It is the City s policy to sell debt through a competitive sale unless there are clearly expressed reasons for selling debt through a negotiated process. This policy does recognize that a negotiated sale may be in the City s best interests when refunding an existing bond issue or when unusual conditions exist that may make it difficult for the marketplace to reasonably evaluate the risks of the bonds being sold. Whenever a negotiated method of sale is being recommended to the City Council, the justification and rationale for not using a competitive sale must be clearly explained. Refunding Bonds: As a general rule, existing bonds will not be refunded through the issuance of refunding bonds unless the refunding plan will achieve a net present value savings of at least 11

18 5%. As an exception to this general rule, bonds may be refunded to obtain more favorable covenants when it is clearly in the City s interests to do so. General Obligation and Non-Utility Debt Legal Limitation of Indebtedness: The City will utilize general obligation (GO or Voted ) and Limited Tax General Obligation (LTGO or non-voted ) debt authority prudently. The Finance Department will annually calculate the City s Constitutional Limit of Indebtedness and the City s outstanding debt will never exceed those Constitutional limits. Additionally, the Finance Department will also annually monitor the direct and overlapping tax supported debt borne by City property owners. Reserve of Debt Authority: At a minimum, the City will maintain at least 10% of its legal limit of Non-Voted General Purpose Indebtedness (LTGO) as a reserve for emergencies. Preservation of Credit Rating: The City will carefully consider the future fiscal impacts of incurring additional long-term debt and will recognize the implicit, additional future costs of any debt issuance that adversely impacts the City s credit rating. Use of Revenue Debt Whenever Possible: The City recognizes that its ability to pledge its taxing authority as security for debt is a limited resource which should be preserved whenever possible. Therefore, whenever the improvement being financed with debt is expected to produce offsetting revenues that can be used to secure all or part of the debt in lieu of a pledge of the City s taxing authority, that revenue should be used to secure the debt to the maximum practical extent to minimize usage of the City s limited voted and non-voted debt capacity. For example, in financing a parking structure expected to produce net revenues for the Parking System, revenue bonds secured by parking system revenues should be used to the maximum practical extent to finance the improvement. Internally Financed Debt: In accordance with the City s Investment Policy, the City can invest in its own bonds and notes to a maximum of 5% of the City s investment portfolio. State law also permits the City to make inter-fund loans when it is prudent to do so. Utility Debt Each rate-based utility will adopt a capital financing policy which allocates capital financing needs between debt and pay-as-you-go use of current revenues. When it is determined that issuance of debt is needed for capital construction, debt will be secured solely by a pledge of rate revenues and will not utilize any general pledge of the City s taxing authority except in extraordinary circumstances approved by the City Council. Conduit Debt The City can permit itself to be used as a conduit for debt secured by others where such an arrangement is required by law or regulation and where the City is not, in any way, contingently liable for the repayment of debt. The chief example of conduit debt is Local Improvement District (LID) debt where the City sells bonds on behalf of property owners benefited by the LID. LID bonds are repaid solely by special property tax assessments on benefited properties. For another example, the City serves as a conduit for Economic Development Bonds issued by the Economic Development Board in support of private development as authorized by State laws and repaid solely by those businesses. INSURANCE POLICIES The City shall maintain a Self-insurance Program Claim Fund, Unemployment Compensation Self-insurance Fund, Self-insured Workers Compensation Fund, Tacoma Dome Property Self-insurance Fund, and Public Utilities Self-Insurance Fund. 12

19 There will be sufficient premiums paid annually by the insured City departments to cover all of the actuarially estimated current claims, plus eliminate any prior claims, fund deficiencies as scheduled by the actuary and build up individual departments reserve accounts to the actuarially recommended levels. Any transfer, appropriation, or expenditure of funds deposited in the Self-Insurance Program Claim Fund for any purpose other than those set forth in Ordinance No shall require unanimous approval of the City Council. The City will periodically review the insurance market to determine whether to self-insure or purchase commercial insurance. UTILITY FUND RATE PROJECTION POLICIES Utility rate studies shall be conducted at least every five years to update assumptions and ensure the long-term solvency and viability of the City s utilities. Utility rates shall be reviewed at least biennially and necessary adjustments made to reflect inflation, construction needs, and to avoid major increases. Rates should be adequate to ensure reliable, competitively priced services for our customers. Net revenues in excess of both legal requirements and minimum working cash balances should be used to minimize future rate increases by funding approved capital projects, retiring high cost debt, augmenting fund reserves established to reduce ratepayer risk. CAPITAL PLANNING POLICIES The major resources for funding the operating divisions capital improvement and extraordinary maintenance programs are revenues, grants, and debt. Financing planned capital replacement costs are an ongoing challenge. It involves evaluating capital assets, estimating their expected useful lives, projecting replacement costs, examining financing options, determining bonding levels, estimating user fees and tax levies, and evaluating the impact on property owners and stakeholders. Estimating future needs well in advance helps the City develop practical strategies for meeting future demands. Preparing for the challenges of infrastructure replacement and/or enhancements demands a long-term view of replacement needs in an effort to: Ensure that the City s infrastructure is improved to meet the community s expectations and that there is no further growth in aggregate dollar amount of deferred maintenance; Moderate changes in tax levies and user fees; Manage debt levels; Predict and carefully plan for future debt issuance; Provide stable revenues; Limit the use of special assessments to finance replacement costs. In general, sharp changes in tax levies and user fees are unacceptable to citizens, business owners, and elected officials. In order to provide stability the City will: Develop a 6-year capital planning and financing system for use in preparing a multi-year capital plan for adoption by the City Council as required by the Growth Management Act of Washington State; Require all operating divisions to prepare multi-year capital plans; Assign the responsibility for coordinating and preparing the City s Capital Facilities Plan to the Finance Department s and Research Division; Consider long-term borrowings as an appropriate method of financing large capital projects that benefit more than one generation of users; 13

20 Adopt the first two years of the 6-year capital plan as part of the City s biennial budget process. OVERHEAD POLICY The City will develop a benchmark for administrative overhead to ensure both adequate support to activities directly serving the public and to ensure that dollars are focused to the maximum extent practicable to providing those direct services. INVESTMENT POLICY The City Charter creates a Finance Committee composed of the Mayor, Finance Director, and the City Treasurer. The Finance Committee is charged with overseeing the City s investments and has adopted Investment Policies to guide the City Treasurer in investing City funds. The following is a brief summary of those policies. The City will strive to maximize the return on its investments, with the primary objective of preserving capital in accordance with the City s ordinances and prudent investment practices, including diversification requirements. Disbursement, collection, and deposit of funds will be managed to ensure needed cash availability. The City will deposit all funds on the same day the funds are received as required by the State Constitution. INTERGOVERMENTAL REVENUE POLICIES Other governments influence many service costs of the City, either because of service overlaps or mandates imposed by the federal, state or county governments. The City should take advantage of opportunities to enhance services through intergovernmental cooperation, shared revenues, or grants. For planning purposes, all grants will be treated in the same manner as other temporary and uncertain resources and will not be used to fund ongoing, basic service needs. Appropriate City staff, including Finance, City Attorney s Office, and sponsoring department will review agreements to ensure compliance with state, federal and City regulations. The City will budget expenditures for grant-funded programs only after receipts of grant award or letter of commitment, and only for the amount of the grant award. City overhead or indirect costs for grant-funded programs will be included in all grant proposals, where permitted. The City will aggressively oppose state or federal actions that mandate expenditures that result in the reallocation of local resources, without local control (i.e., unfunded mandates). The City will pursue intergovernmental funding to support the incremental costs of those mandates. 14

21 Revenue Detail By Fund General Fund (0010) Taxes Property Tax General Property Tax-Prior Period 2,693,034 (1,500,000) (1,595,588) (95,588) General Property Tax-Current Period 88,081,686 96,768, ,935,153 6,166,641 Sales Tax Title Property 10,893 Total Property Tax 90,785,612 95,268, ,339,565 6,071,053 Sales Tax City Sales/Use Tax 40,282,869 35,079,326 38,682,233 3,602,907 City Optional Sales/Use Tax 40,052,024 34,418,217 37,953,223 3,535,006 Streamline Mitigation Sales Tax Revenue 37,359 Sales Tax.1% Criminal Justice 5,893,021 5,100,000 5,623, ,808 Natural Gas Use Tax 2,824,134 1,268,663 1,398, ,301 Total Sales Tax 89,089,409 75,866,206 83,658,228 7,792,022 Business Tax International Finance District 3,545,960 2,173,800 2,077,145 (96,655) Cellular Telephone & Pager Tax 10,688,242 5,496,863 5,252,451 (244,412) Telephone Tax 5,462,820 6,208,043 5,932,010 (276,033) Cable Television Tax 4,021,701 3,888,000 3,715,125 (172,875) Natural Gas Tax 8,947,216 9,861,725 9,423,234 (438,491) Private Solid Waste Tax 67,118 Business Tax Miscellaneous 0 (5,814,417) (5,555,886) 258,531 Manufacturing Tax 6,608,949 8,155,485 7,792,861 (362,624) Retailing Tax 15,496,197 16,056,225 15,342,304 (713,921) Service Tax 23,599,990 27,159,300 25,951,695 (1,207,605) Railroad Franchise Tax (94) Wholesaling Tax 9,845,188 9,746,325 9,312,966 (433,359) B/O Tax Job Credit (1,314,042) (1,000,000) (955,536) 44,464 Multiple Activities Tax Credit (2,366,598) (1,800,000) (1,719,965) 80,035 Retail Services 1,315,18 0 Cabaret 115,385 Buying & Selling of Wheat Oats Corn Barl 356,571 Admission Tax 1,080,854 1,302,278 1,244,374 (57,904) Total Business Tax 87,470,639 81,433,626 77,812,778 (3,620,848) Utility Tax Power Excise Tax 47,623,084 40,548,000 50,382,587 9,834,587 Water Excise Tax 8,859,195 10,215,000 11,164, ,747 Wastewater Excise Tax 11,507,000 12,400,000 12,921, ,768 Solid Waste Excise Tax 8,600,095 8,660,000 9,561, ,200 Rail Excise Tax 3,093,214 2,598,000 2,913, ,773 Click! Excise Tax 3,030,075 4,444,000 3,859,059 (584,941) Cable TV Franchise Fee 178, , ,886 (7,114) Total Utility Tax 82,890,855 79,025,000 90,956,020 11,931,020 Other Taxes Leasehold Excise Tax 2,307,798 1,822,500 2,274, ,692 Bingo & Raffles 6,728 4,050 5,053 1,003 Punchboard & Pulltabs 1,111,752 1,012,500 1,263, ,940 Card Rooms 1,102 15

22 Revenue Detail By Fund General Fund (0010) (Continued) Amusement Games 44,256 50,625 63,172 12,547 Total Other Taxes 3,471,635 2,889,675 3,605, ,182 Taxes - Non ary Uncollected Taxes (203,003) Total Taxes - Non ary (203,003) Total Taxes 353,505, ,483, ,372,448 22,889,430 Licenses & Permits Business Licenses & Permits Business Licenses & Permits-Misc 295, , ,675 83,465 Fire Prevention Bureau Permits 417, , , ,766 Emergency Alarm Installation 15,835 8,510 11,678 3,168 Annual Business License Fee 2,478,971 2,632,500 3,612, ,988 Home Occupation License 64,047 50,625 69,470 18,845 Alarm System Operator License 14,15 0 Alarm Monitor 491,288 51,890 1,171,000 1,119,110 Dance Hall/Cabarets 43,920 45,664 62,665 17,001 Multiple Vendor/Promotor Fee 104, , ,112 40,179 Garage License 78,945 62,269 85,451 23,182 Interest/Penalty on Business Licenses 225, , , ,946 Amusement Device (10) Total Business Licenses & Permits 4,229,959 3,972,592 6,551,242 2,578,650 Non-Business Licenses & Permits Non-Business Licenses & Permits-Misc 225, , ,389 (11,063) IPMS Revenue 389 Building Permits 4,953,523 4,759,50 (4,759,500) Heating & Plumbing Permits 1,080, ,284 0 (776,284) Sign Permitting 98, ,218 0 (143,218) Streets & Curbs 395, ,125 0 (415,125) Animal Licenses 780, , , ,439 Intergovernmental Animal Licenses 20,872 16,385 22,486 6,101 Total Non-Business Licenses & Permits 7,555,258 7,148,433 1,319,783 (5,828,650) Business License & Permits-Non ary Uncollectible Business and License Fees (6,610) Total Business License & Permits-Non ary (6,610) Total Licenses & Permits 11,778,606 11,121,025 7,871,025 (3,250,000) Intergovernmental Revenues Federal Grants Direct Federal Homeland Security Grant 6,262 Direct Federal Dept of Justice 9,215 18,430 21,533 3,103 Indirect Federal Homeland Security Grant 7,260 50,000 58,419 8,419 Ind Federal Emergency Mgmt Agency 87,023 9,220 10,773 1,553 16

23 Revenue Detail By Fund General Fund (0010) (Continued) Total Federal Grants 109,760 77,650 90,725 13,075 State Grants Direct WA Military Department 23,923 75,826 88,593 12,767 Direct WA Other Judicial Agencies 10,813 Direct WA Dept of Health 0 9,000 10,516 1,516 Direct WA State Patrol 12,813 Direct WA Recreation & Cons Funding Brd 1,050,607 Direct WA Traffic Safety Commission 33,094 53,290 62,262 8,972 Direct WA Dept of Transportation 124, , ,203 16,889 Total State Grants 1,255, , ,574 40,144 State Shared Revenue Criminal Justice-Assistance 82, , ,182 84,182 Criminal Justice-High Crime 2,368,391 2,700,000 3,154, ,586 Criminal Justice-Low Population 81, , ,836 16,836 Criminal Justice-Violent Crime 299, , ,877 53,877 Liquor Excise Tax 1,901,139 4,657,500 5,441, ,160 Liquor Board Profits 2,823,375 Motor Vehicle Fuel Tax City Street 3,695,070 3,800,00 (3,800,000) Total State Shared Revenue 11,251,268 12,077,500 9,671,141 (2,406,359) Payments in Lieu of Taxes Payments in Lieu of Taxes 14,385 30,000 35,051 5,051 Total Payments in Lieu of Taxes 14,385 30,000 35,051 5,051 Grants from Local Units Interlocal Grants-Puyallup Tribe 322, , , ,856 Interlocal Grants-Others 6,992 Total Grants from Local Units 329, , , ,856 Intragovernmental Revenue Intergovernmental Revenue Misc 0 972,260 1,135, ,716 Fire Protection Services 6,716,855 5,725,538 7,800,000 2,074,462 Library Services 319 Advanced Payment - Unearned Revenue 66, , ,836 16,836 Total Intragovernmental Revenue 6,783,604 6,797,798 9,052,812 2,255,014 Total Intergovernmental Revenues 19,744,563 19,921,378 19,946,159 24,781 Charges for Services Processing Fees Charge for Services-Misc 177, , ,996 29,396 Charge for Services - Maintenance 249, , , ,927 Filing Fees-Misc 3,069 4,040 4, Sale of Maps & Publications 80, , ,373 18,373 Certified Photostat Record Search 100,696 80,000 94,553 14,553 Environmental Processing 181, ,00 (202,000) Revenue - Other 4,650 10,100 11,936 1,836 Other Cust Fees Revenue (Late/NSF Check 49,206 70,700 83,559 12,859 17

24 Revenue Detail By Fund General Fund (0010) (Continued) Zoning/Subdivision Fees 1,340,816 1,414,00 (1,414,000) Plan Checking Fees 2,467,291 2,424,00 (2,424,000) Total Processing Fees 4,654,964 4,871,440 1,296,119 (3,575,321) Public Safety Fees Charges for Security of Persons/Property 195, , ,742 32,742 Law Enforcement Services 633, ,000 1,027, ,333 Fire Dept Misc 2 Fire Alarm Svc 124, , ,382 36,382 False Alarm Fines 578, , , ,143 Ambulance/Emergency Aid Fees 536, , , ,952 Emergency Medical Accts Rec Writedowns (224,908) (200,000) (236,382) (36,382) Emergency Medical A/R Uncollectibles (56,574) (30,000) (35,456) (5,456) Total Public Safety Fees 1,788,281 1,950,000 2,604, ,714 Transportation Fees Parking 4,709 10,10 (10,100) Streets & Grounds Maint External Service 12 0 Total Transportation Fees 4,829 10,10 (10,100) Public Facility Usage Fees Library - Nonresident 61,885 62,000 73,279 11,279 Other Fees & Charges - Culture & Recreat 51, , ,759 18,739 Other Revenue - Misc 85,301 Other Intellectual Envir 15,173 20,200 23,875 3,675 Total Public Facility Usage Fees 213, , ,913 33,693 Interfund Charges for Services Interfund Charges for Services-Misc 298, , ,10 Total Interfund Charges for Services 298, , ,10 Other Power Revenue - Small General 0 1,000 1, Water Revenue - Commercial/Industrial 0 1,000 1, Product Sales 14,226 Rent of Oper Prop Leasehold 1,02 0 Power Revenue - Temporary Service 24 0 W/W Other Service Revenues 589 External Overhead 61, , , ,831 Miscellaneous Non-Operating Sales - Taxa 5,597 2,000 2, Surplus scrap sales 2,890 1,000 1, Total Other 86, , , ,741 Total Charges for Services 7,046,242 7,636,860 5,310,587 (2,326,273) Fines & Forfeits Criminal Penalties Criminal Costs Misc 15 0 Other Infractions 31,917 22,000 36,747 14,747 Driving Under the Influence 167, , , ,010 18

25 Revenue Detail By Fund General Fund (0010) (Continued) Criminal Traffic Misdemeanors 177, , , ,305 Mand Vehicle Insurance Admin Credit 6,222 Court Costs Recoupment 12,239 Total Criminal Penalties 396, , , ,062 Civil Penalties Penalties/Interest-Business Taxes 359, , , ,309 Penalties and Interest on Assessments 2,317 Parking Infractions 1,995,498 2,170,00 (2,170,000) Parking Red light infractions 2,093,760 3,850,00 (3,850,000) Traffic Infractions 1,909,022 1,750,00 (1,750,000) Non-Traffic Misdemeanors 253, , , ,064 Boating Safety Fines #TMC Library Book Fines & Penalties 525, , ,832 38,832 Total Civil Penalties 7,139,244 8,843,500 1,486,705 (7,356,795) Total Fines & Forfeits 7,535,249 9,225,500 2,124,767 (7,100,733) Interest Investments-Misc. Revenue 1,010, , ,480 (184,520) Interest Earnings-Interfund Loans 634, ,000 1,227, ,740 Interest Income-Municipal 97, ,000 76,935 (23,065) Pooled Investments Revenue 5,021,250 2,100,000 1,615,634 (484,366) Amortization of Premium/Discount 54,491 40,000 30,774 (9,226) Other Interest Earnings 100, ,000 76,935 (23,065) Capital Gains & Losses on Investments (98,809) GASB 31 Gain/Loss 481,957 12,000 9,232 (2,768) Total Interest 7,301,602 3,552,000 3,652, ,730 Contributions Contributions and Donations 45, ,00 (900,000) Contributions and Donations - SD 10,286 Contributions - Other 986,814 Total Contributions 1,042, ,00 (900,000) Transfers From Other Funds Contribution from Other Active Fund 841,068 6,981,000 2,807,649 (4,173,351) Contribution from Contingency Fund 0 2,000,00 (2,000,000) Contribution from EMS Levy 250, , , ,000 Contribution From Arterial St Fund 88,511 Contribution From Right of Way Fund 295,0 Total Transfers From Other Funds 1,474,579 9,231,000 3,307,649 (5,923,351) Other Vending Machine Sales (200) Reimbur Serv Wk in Prog 30,000 30,000 Non-Grt Reimb-Pierce County 1,94 0 Misc Work Order Revenue 145,627 12, , ,000 Mechanical Shop Repairs 25, ,000 27,000 (434,000) Sale of Machinery & Equip

26 Revenue Detail By Fund General Fund (0010) (Continued) Sale of Junk & Salvage 9,077 Compensation for Loss of Captial Asset 56,864 60,000 60,00 Other Miscellaneous Revenue 507, , , ,832 Other Interfund Misc Revenue 23, ,000 20,000 LID - Collection Fees (2,100) Cashier Over & Short 6,894 Rental of City Property/Other Leasehold 2,332 Rental of City Property/Non Leasehold - 63,968 Monthly Parking Rentals 39,726 40,00 (40,000) Reimbursements Non-Revenue Receipts 135,573 Misc Debit/Credit to Retained Earning (29,178) Gain/Loss on Disposal of Capital Assets 5,425 Proceeds from the Sale of Capital Assets 40, , ,000 50,000 Total Other 1,032,798 1,172,368 1,387, ,632 Total 10,851,930 14,855,368 8,347,379 (6,507,989) Cash Balance Cash Balance Beginning Cash Balance 0 16,523,053 0 (16,523,053) Appropriation from Current Fund 0 29,663,00 (29,663,000) Total Cash Balance 0 46,186,053 0 (46,186,053) Total Cash Balance 0 46,186,053 0 (46,186,053) Total General Fund 410,461, ,429, ,972,365 (42,456,838) 20

27 Revenue Detail By Fund Special Revenue Funds Courts (1020) Intergovernmental Revenues Ind Dept of Justice 4,503 Direct WA Other Judicial Agencies 99, , ,344 (68,656) Total Intergovernmental Revenues 104, , ,344 (68,656) Fines & Forfeits Domestic Violence Penalty Assessment 14,448 14,40 (14,400) Total Fines & Forfeits 14,448 14,40 (14,400) Other Miscellaneous Revenue (13,988) Total (13,988) Cash Balance Beginning Cash Balance 114, ,612 Total Cash Balance 114, ,612 Total Courts 104, , ,956 31,556 Contingency (1030) Conversion Interest Earnings-Interfund L 1,500,000 1,500,000 Pooled Investments Revenue 139,847 Amortization of Premium/Discount 1,527 Capital Gains & Losses on Investments (2,778) GASB 31 Gain/Loss 15,259 Contribution from Other Active Fund 0 1,500,00 (1,500,000) Total 153,855 1,500,000 1,500,00 Cash Balance Beginning Cash Balance 0 1,500,00 (1,500,000) Total Cash Balance 0 1,500,00 (1,500,000) Total Contingency 153,855 3,000,000 1,500,000 (1,500,000) Public Works Streets (1060) Licenses & Permits Non-Business Licenses & Permits-Misc 174, , ,010 91,509 IPMS Revenue (3) Building Permits (5,076) Streets & Curbs (98) 21

28 Revenue Detail By Fund Special Revenue Funds Public Works Streets (1060) (Continued) Total Licenses & Permits 168, , ,010 91,509 Intergovernmental Revenues Federal Grants - Miscellaneous 0 1,818,10 (1,818,100) Direct Federal Dept of Transportation 200,618 Ind Federal Emergency Mgmt Agency 72,538 Ind Dept of Transportation 12,090,962 25,725,364 0 (25,725,364) State Grants - Miscellaneous 0 297,399 0 (297,399) Direct WA Military Department 12,09 0 Direct WA Recreation & Cons Funding Brd 108,895 Direct WA Transportation Improve Brd 4,447,168 6,900,00 (6,900,000) Motor Vehicle Fuel Tax City Street 5,667,603 5,954,818 8,258,298 2,303,480 Interlocal Grants-Puyallup Tribe 0 337,50 (337,500) Interlocal Grants-Others 325,727 Intergovernmental Grants Revenue 69,216,999 69,216,999 Intergovernmental Revenue Misc 0 2,000,00 (2,000,000) Advanced Payment - Unearned Revenue (999,149) Total Intergovernmental Revenues 21,926,451 43,033,181 77,475,297 34,442,116 Charges for Services Charge for Services-Misc 156,141 50,00 (50,000) Charge for Services - Maintenance 36,57 0 Plan Checking Fees 85 Other Revenue - Misc 4,418,419 4,418,419 External Overhead 327,772 Miscellaneous Non-Operating Sales - Taxa (25) Total Charges for Services 520,544 50,000 4,418,419 4,368,419 Fines & Forfeits Penalties and Interest on Assessments 3,892 Total Fines & Forfeits 3,892 Pooled Investments Revenue 510,062 Amortization of Premium/Discount 4,882 Capital Gains & Losses on Investments (14,986) GASB 31 Gain/Loss 69,165 Contributions and Donations 0 16,00 (16,000) Contributions - Other 2,500,000 2,500,000 Contribution from ,525,847 0 (2,525,847) Contributions from CIP 615,729 1,493,518 0 (1,493,518) Contributions from Other Funds 102, ,000,000 11,000,000 Contribution from Other Active Fund 67, , ,000 Contribution from General Fund 2,898, ,000 21,941,276 21,761,276 Contributions from REET 7,776,000 7,776,000 Contribution From Arterial St Fund 100, ,00 (200,000) Contribution From Wastewater Fund 0 750,00 (750,000) Contribution From Right of Way Fund 200,0 Contribution from ,897 0 (977,897) 22