FY 2019 Budget Forecast Overview

Transcription

1 FY 2019 Budget Forecast Overview October 24, 2017

2 Arlington Outlook Arlington Continues to Grow Population Service Demands Real Estate Assessment Base / New Construction School Population Real Estate Trends Residential slightly positive 2017 sales & prices trending up Apartments growing inventory, slower growth in rents Commercial Office continues to be under pressure - vacancy still a key concern 2

3 Arlington Real Estate Countywide Commercial Vacancy Rate 25.0% 20.0% 15.6% 19.0% 21.2% 19.3% 20.0% 19.3% 19.7% 19.9% 17.7% 18.5% 18.0% 15.0% 12.8% 10.0% 5.0% 0.0% 3

4 Real Estate Trends & Forecast Growth in Assessments 7.0% 6.0% 6.1% 5.6% 5.7% 5.0% 5.0% 4.3% 4.0% 3.0% 3.0% 3.0% 2.8% 2.9% 3.6% 3.0% 2.5% 3.8% 3.2% 2.0% 1.0% 1.0% 0.0% Certified 2014 Certified 2015 Certified CY 2016 Certified CY 2017 Budget Planning CY 2018 TOTAL COMMERCIAL TOTAL RESIDENTIAL TOTAL ASSESSMENTS 4

5 Preliminary FY 2018 Outlook Other taxes showing slow but positive growth Personal Property & Business Tangibles: increasing Business, Profession & Occupational License (BPOL): increasing Sales, Meals, & Transient Occupancy Tax: slower growth Other local taxes: up 2% Minimal growth in fee revenue State & Federal 1% growth in state revenue Federal flat 5

6 Impact on the Residential Taxpayer $400 $350 $300 $250 $200 $150 $100 $50 $0 $356 $335 Changes in Annual Local Taxes and Fees for the Average Single Family Home $179 $278 $311 $50 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 Budget Planning Change in Other Taxes & Fees for the Average Single Family Home Change in Real Estate Tax Bill for the Average Single Family Home In CY 2018, the assessment of the average single-family home is expected to increase 5.0% to $648, % to $640,654 and see a corresponding increase in real estate tax of $310 $236 and projected fee increase of $75

7 County Expenditure Assumptions Metro: 18.1% (+$6.6 million) Preliminary Continuing Services Budget Development Assumptions 3% increase in County contribution plus replacement of one-time NVTC state aid balances that were utilized to supplement the County s FY 2018 support for Metro Transit Development Plan (TDP): +$2.7 million Estimated cost for FY Evaluating the feasibility of using Non-General Fund monies for the expansion of service. Debt: 7.2% (+$5.1 million) Contractual Cost Increases (e.g. multi-year contract agreements): 1.5% (+1.1 million) Healthcare (rates +7.5%): +$2.0 million Retirement: flat Other Post Employment Benefits (OPEB): +3% Employee Compensation Pay Changes: $8.9 million 7

8 FY 2019 Funding Pressures Schools Budget Gap: Unknown at this time Continuing enrollment increases Capacity needs Normal inflationary pressures of compensation, healthcare, retirement, OPEB, etc. County Budget Gap: $10 to $13 million Retirement Costs & Retiree Healthcare (OPEB) could change Employee compensation salary & health care cost increases Debt service up based on the County s adopted CIP Metro pressures increase for jurisdictional contribution and anticipation of a regional solution 8

9 County Support of Schools Sharing Local Tax Revenue (46.6%) FY 2019 Ongoing Revenue Transfer: $499.3 million (up from $484.2 million in FY 2018) Increase of $15.1 million over FY 2018 Funding gap still remains (projected based on Schools forecast) Additional Support (approx. $7-$8 million) Through: School Resource Officers School Health Nurses & Services Crossing Guards DHS Programs Helping Children & Families Fields, & Maintaining Safe Routes to Schools 9

10 Timeline November February County Board adopts Close-out and gives County Manager budget guidance for the development of the FY 2019 budget. County Manager s FY 2019 Proposed Budget submitted to the County Board February - April March April April / May Budget Work Sessions County Board holds a series of budget work sessions with County departments, Constitutional Offices, and the School Board Public Hearings County Board hosts public hearings on proposed FY 2019 budget including County expenses and real estate tax, personal property tax rates, and other taxes and fees Budget Adopted County Board adopts FY 2019 Budget and Appropriations Resolutions for the County government, the public schools, and Pay-As-You-Go Capital. County Board adopts CY 2018 real estate tax rate and other FY 2019 taxes and fees. School Board adopts FY 2019 school budget July 1 FY 2019 begins 10

11 FY 2019 Budget Forecast Overview October 24, 2017

12 FY 2017 Year-end Summary October 24, 2017

13 FY 2017 Year End Summary Year-End Fund Balance $240.0 $233.1 Year Ended With a Balanced Budget Fund Balance Continues to Decline from FY 2014 Majority of funding is restricted (94% in FY 2017) $220.0 $200.0 $180.0 $160.0 $140.0 $199.6 $25.6 $174.0 $29.8 $203.3 $200.3 $21.8 $178.5 $191.2 $186.4 $17.8 $11.1 $173.4 $175.3 $120.0 $ Restricted Funding Discretionary Funding 13

14 Historical Operating Savings Amounts of department and program savings vary from year to year (1.0% - 3.5%) Operating Department Savings ($ millions) $20.0 $18.0 $16.0 $14.0 $18.8 Examples of variable factors Winter Weather Hiring Slowdowns Program Utilization (e.g. DPR programs) Program Service Demands $'s millions $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 $10.1 $6.4 $

15 FY 2017 Year End Tax Revenue On average, actual tax revenue has been 1.4% higher than 3 rd Quarter projections. 1, % 2.0% 1, % 1.5% % 1.1% 1.0% Millions % % 800 FY 2013 FY 2014 FY 2015 FY 2016 FY rd Quarter Budget Estimate Actuals Actuals to 3rd Quarter 0.0% 15

16 Allocations of Fund Balance Allocations of Fund Balance ($186.4 million): 94% ($175.3 million) of fund balance restricted or already allocated per current Board policy or prior Board action Funding to reserves ($71.6 million) Required to maintain the County s triple AAA Continue commitment to Schools ($24.2 million) Affordable Housing Investment Fund ($52.7 million) $33.4 million Allocated to projects $19.3 million Unallocated Legally restricted funds ($2.6 million) Projects the County Board has already taken action on ($24.2 million) For example, $1.6 million for FY 2018 Housing grants, $1.5 million for FY 2018 for public safety staffing and equipment, $7.8 million for PAYG for FY 2018, $2.3 million in incomplete projects 16

17 County Manager Recommendations Remaining Funding Recommendations: $11.1 million ($ millions) Facility Studies, $0.90 Life / Safety, $2.00 Affordable Housing, $5.20 Employee Compensation, $1.75 Operating Contingent, $

18 Allocating the Balance of Funding County Manager s Recommendations ($11.1 million) Affordable Housing: $5.2 million Critical Life Safety Needs: $2.0 million Courts and Detention Center technology security upgrades Public Safety Position reclassification: $1.75 million County Manager Operating Contingent: $1.25 million Facility Studies: $0.9 million 18

19 Option per County Board Budget Guidance Provide an option for consideration that directs all carryover funds to consideration in the FY 2019 budget process, except for what is deemed to be emergency or unanticipated needs that require immediate allocation or appropriation. Emergency / Unanticipated Needs: Critical Life Safety Needs: $2.0 million Courts and Detention Center technology security upgrades Public Safety Position reclassification: $1.75 million County Manager Operating Contingent: $1.25 million In prior year, a significant portion of this contingent was utilized before the fourth quarter Facility Studies: $0.9 million JFAC work that the County Board could choose to delay until budget adoption in April Unallocated: $5.2 million 19

20 FY 2017 Close-out