budget in brief City of Salem OREGON FISCAL YEAR 2018 WHAT S INSIDE Opportunity Compassion Responsiveness Accessibility

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1 FISCAL YEAR 2018 budget in brief City of Salem OREGON WHAT S INSIDE Message from the City Manager And the Survey Says Did You Know? Funding City Operations More About the General Fund Understanding Property Tax Serving the Community Opportunity Compassion Responsiveness Accessibility City of Salem Page 1 FY 2018 Budget in Brief

2 message from the city manager I am pleased to present this summary of the City Council-adopted FY 2018 budget. The annual budget is part of an ongoing process. Recommendations for a new fiscal year are built upon the foundation of current activity, trends, data, and multi-year financial forecasts. Today s choices impact the City s capacity to deliver services in the future. Continuity and a view to the future frame the FY 2018 budget. While implementation of new services and initiatives is one indicator of organizational health and forward progress, the capacity to retain valued City programs and services must be considered. The strategic planning process initiated by City Council in 2017 will guide future policy decisions regarding City services and resources. The basic municipal functions of police and fire response, library access, planning and parks, and transmission of clean drinking water are integral to a safe and livable community. We learned through the first phase of the current strategic planning initiative that Salem s residents are satisfied with City services. Continuing this positive community response will require attention to the organization s fiscal health. In FY 2017 to that end, the City Council championed facility assessments, strategic planning, and resident opinion surveying. As we prepare for FY 2018 and beyond, we must invest in a thoughtful, measured, and inclusive response to the City s fiscal challenges. Solutions to the structural imbalance in the General Fund may require difficult choices trade-offs, reduced programs, new or increasing fees to offset the increasing cost of service delivery. To continue in a positive direction while navigating these difficult choices, the City s executive management team will work with the City Council and its advisory boards and commissions, Salem s neighborhood associations, and our business, health, and education partners to help form a long-term strategy. We also know we must broaden our problem-solving outreach in the community. We are improving our communication tools with the newly launched communitycentric website, adoption of current and emerging social media platforms, and an ongoing commitment to resident surveying. We must invite the community s vision for Salem and ensure the exchange of accurate and timely information. Sincerely, budget in brief FY 2018 edition Steve Power City Manager This document provides an overview of the City s budget, which was adopted by the City Council on June 26, To view the entire budget (including the Salem Urban Renewal Agency budget) and other financial reports, please visit our website at: City of Salem Page 2 FY 2018 Budget in Brief

3 Coffee with a Cop Wallace Marine Sports Complex Make Music Day now and for the future For several months, the City has undertaken a strategic planning effort with the primary goal of engaging the community and elected officials to sustain efficient and effective delivery of Salem s services. Through extensive outreach and engagement, including a 2016 resident satisfaction survey, the City Council developed six initial priorities in the strategic plan. These priorities will further the City s mission to provide fiscally sustainable and quality services to enrich the lives of present and future residents, the quality of the environment and neighborhoods, and the vitality of our economy. and the survey says... A December 2016 survey confirmed that Salem residents are positive about the services from city government. 92% 88% 85% of Salem residents say they are SATISFIED with City services. A significant percentage of respondents 66% also think the city is headed in the RIGHT DIRECTION. This figure is among the highest for communities in Oregon, and in line with other suburban cities of Salem s size. of Salem residents say they are satisfied with the emergency services of POLICE, FIRE, AMBULANCE and call-taking. of Salem residents say they are satisfied with PARKS and RECREATION and the SALEM PUBLIC LIBRARY. City of Salem Page 3 FY 2018 Budget in Brief

4 did you know the City of Salem provides dozens of services and programs that enrich residents lives and the quality of our neighborhoods and environment; support a safe and livable community, and promote the vitality of our economy? SAFETY GOVERNANCE Police Fire emergency response Contracted ambulance service Municipal Court Code enforcement Building inspection Sound financial, human resource, and information technology policies and practices Municipality-focused legal services LIVABILITY Parks and street trees Salem Public Library Multi-generational recreation programs Long range, current planning Social services program support Water delivery Wastewater treatment Stormwater management Environmental compliance VITALITY Economic development Salem Airport Residential and commercial building permits Business retention and recruitment Redevelopment management Parking solutions The FY 2018 budget and City Council actions promote the strategic plan s 7 identified priorities Vision for Growth and Development Affordable Housing, Social Services, Homelessness Critical Infrastructure Economic Development and Downtown $400,000 for a multi-year Comprehensive Plan update to help guide future growth and development. $1.4 million supporting enhancements for a joint program to assist the hardest-to-house with temporary housing and additional support services through non-profit agencies. Support of a November 2017 ballot measure to seismically upgrade and extend the life of the Library, funding to begin work on the voter-approved $61.8 million public safety facility, an additional $350,000 for deferred maintenance, and $74.5 million for improvements to the City s transportation and utility systems and infrastructure. Continued investment in improvements to job creation and downtown vibrancy. Sustainable Service Delivery Dedicated funding to continue strategic planning and surveying of residents to inform future policy decisions. Public Transportation Continued partnership with Salem Keizer Transit District to support improvements to the public transportation system in our community. Environmental Action, a seventh priority, was added in late June Work is underway to define the goal or desired outcome and identify key actions, which will help the City make progress toward the goal. City of Salem Page 4 FY 2018 Budget in Brief

5 funding city operations TOTAL FY 2018 WHERE THE MONEY COMES FROM TAXES include property taxes that support General Fund operations, transient occupancy taxes paid by visitors to Salem, marijuana sales tax, and voter-supported tax levies for infrastructure improvements. SALES, FEES, LICENSES and PERMITS encompass 68 different charges for everything from franchise fees paid by utilities (electric, natural gas, telecom) for use of the City s rights-of-way, to library overdue book charges, to building permits. Money leftover from the prior year to begin the new fiscal year. all other 9% working capital 31% CITY BUDGET $559,326,370 taxes 15% internal / intergovernmental 23% sales, fees, licenses, permits 22% Some of the money in the INTERNAL / INTERGOVERNMENTAL category comes from insurance premiums paid to the City s Self Insurance Fund; revenues shared by the State of Oregon from liquor, gas, and cigarette taxes; grants anticipated to be received; reimbursements from other agencies, cities, and counties; and transfers from one City fund to another. ALL OTHER revenues include rent from parking meters and meeting rooms at the library, court and parking fines, interest earnings, and bond proceeds. AND HOW THE MONEY IS SPENT SUPPLIES and SERVICES are the purchases required to deliver City programs and services construction contracts, training courses, firefighter safety gear, computer software licenses, library books, emergency dispatch services, wastewater treatment chemicals, electricity, tools to maintain parks and buildings, radios, uniforms, and so much more. EQUIPMENT, BUILDINGS, and LAND represent purchases that exceed $10,000 and are longer-term assets of the City. This category includes the land purchase for the new police facility. EMPLOYEE COSTS or Personal Services include salaries, incentive pay for specific skills or certifications, overtime, and retirement and health benefits. Costs in this category equal $154.9 million in the budget for 1, full-time equivalent career staff and dozens of parttime or seasonal workers. City employees are represented by five labor unions for sworn police officers, firefighters, general employees, call-takers and communication specialists, and city attorneys. employee costs 31% supplies, services 49% equipment, buildings, contingency 2% transfers to other funds 4% CONTINGENCY provides funding for unanticipated costs and must be transferred into one of the other categories included in this display to expend it. land 6% debt payments 8% DEBT PAYMENTS for streets, bridges, fire stations and trucks, utility system rehab and additions. TRANSFERS to move money from one City fund to another to support a specific project or service. City of Salem Page 5 FY 2018 Budget in Brief

6 a closer look at the General Fund WHERE THE MONEY COMES FROM At 46 percent of all estimated funding (total resources), PROPERTY TAX is the largest source of support for general services in Salem. All other new sources of funding equate to 36 percent. WORKING CAPITAL funds left over from the prior year provides another 18 percent. The category of INTERNAL / INTERGOVERNMENTAL includes among other sources anticipated grants and reimbursements from other agencies; a transfer of transient occupancy tax revenue to support landscape maintenance at Bush, Deepwood, Riverfront, and Wallace Marine parks; and the City s share of state revenues derived from alcohol, cigarette, and taxes. FEES, LICENSES, and PERMITS includes revenues derived from public rights-of-way use (franchise fees); recreation program participants; planning, site plan, dwelling plan, and fire safety reviews; and citation of City code violations. AND HOW THE MONEY IS SPENT The General Fund supports police, fire, emergency response, library, parking, Center 50+, planning, parks, code enforcement, economic development, and all of the behind-the-scenes activities (like finance, information technology, legal, human resources, and facilities maintenance) to ensure direct services reach all members of the community. The middle chart breaks down the costs for these services by expense category. Employee costs comprise 75 percent of the total for the General Fund. The bottom chart provides a cost breakdown by service. In this view, police and fire services comprise the majority of PUBLIC SAFETY at $74.3 million. The Salem Public Library, parks maintenance, and recreation programs are combined in CULTURE and RECREATION. Planning, parking, and various economic development activities form COMMUNITY and ECONOMIC DEVELOPMENT. The category of GOVERNANCE includes all of the behind-the-scenes services noted above. working capital 18% property taxes 46% EXPENSES BY CATEGORY $129.9 million supplies, services 21% debt payments, transfers 1% community and economic EXPENSES development 6% BY SERVICE $129.9 million public safety 60% internal / intergov. 16% contingency 2% Movies in the Park RESOURCES BY CATEGORY $144.5 million all other revenues 5% employee costs 75% equipment, buildings, land 1% fees, licenses, permits 15% culture and recreation 11% governance 23% City of Salem Page 6 FY 2018 Budget in Brief

7 understanding property tax In Oregon, property taxes are the primary funding source for local government general services. Salem property taxes provide more than 56 percent of the new revenue in the General Fund budget for FY The City has a permanent tax rate of $ per thousand of assessed value. The permanent rate does not include any voter-approved bond measure or local option levies. MORE ABOUT PROPERTY TAXES Measure 5 was fully implemented in 1995 and introduced limits of $5 per $1000 of real market value (RMV) for schools and $10 per thousand of RMV for general government. If the assessed taxes exceed these limits, the amount taxed is reduced until it is within the limits. This process is called compression. Measure 50 was drafted in 1997 and created permanent rates for taxing jurisdictions. It also limited the annual growth in assessed value (AV) to 3 percent annually. These property tax measures contribute to the forecasted imbalance between the City s revenues and expenses, as the expenses grow at a faster rate than the 3 percent limitation allows property tax revenue to increase. Property Taxes for a Salem WESD**, 2% Chemeketa, 5% Homeowner Regional Library, Misc., 1% Transit, 4% S-URA*, 6% County, 16% School District, 31% Salem, 36% *Salem Urban Renewal Agency **Willamette Education Service District The coin stack illustration of property taxes is based on FY 2017 information as it related to a Salem home (in Marion County) with an AV of $200,000. This illustration demonstrates the distribution of all property taxes the Measure 5 imposed limits, as well as all voter-approved bonds. Salem Parks $6.9M Our residents and visitors recreate in 2,235 acres of parks neighborhood, major urban, sports-centered, and natural areas. Fifty-five miles of walkways and trails, a variety of sports courts and fields, over 125,000 street and park trees, and playground equipment are maintained by 39 Parks staff, assisted by many community members, supplying 199,925 hours of volunteer (74,525 hours) and supplemental labor (125,400 hours). serving the community Economic Development and Livability $5.2M At the center of the Urban Development Department s mission is a focus on economic development and livability through business retention / recruitment and workforce development, downtown revitalization, and promotion of housing options for low- and middle-income residents. The department also manages the City s parking services program. Transportation Services $18.09M Funded primarily through State Highway Funds (gas taxes), Salem operates and maintains 640 miles of streets, ranging from local residential streets to major arterials and expressways. The street system contains signalized intersections, school speed zone flashers, streetlights, street signs, alleys, bridges, and sidewalks. Transportation Services also keeps our streets and bridges plowed, de-iced, and available for safe travel during and after storms. The budgets for these programs and services are managed within two separate funds. City of Salem Page 7 FY 2018 Budget in Brief

8 serving the community Building Permits, Inspections $5.02M Salem maintains the endorsement of International Accreditation Service Building Department; the first city in Oregon to achieve this status. Responsibilities for the Building and Safety Division include construction plan review and structural, plumbing, electrical, and mechanical inspections. Neighborhood Enhancement Division $1.77M This division focuses on goals related to quality of life, as well as public safety through prevention, code compliance, civic involvement, social justice, and strong neighborhoods. Much of this work is linked to involving and encouraging citizen participation at all ages. Water rates and service fees pay for the treatment of source water at the Geren Island Water Treatment Facility $12.08M, and the distribution of safe, clean drinking water to 194,440 customers. This funding supports operation and maintenance of 758 miles of water mains, 19 water pump stations, 18 reservoirs, 7 active wells, and all the hydrants, valves, and water meters to supply uninterrupted water services to the community. Willow Lake Wastewater Treatment Facility $11.97M Serving 234,820 customers in Salem, Keizer, Turner and portions of Marion County, the facility has been in continuous operation since it was built in 1964, 24 hours a day, 7 days a week for more than 50 years. It treats over 17.7 billion gallons of wastewater a year and discharges this cleaned water into the Willamette River enough water to fill 73 Olympic-sized swimming pools each day. For every penny spent at the treatment plant, 15.4 gallons of water are treated. Center 50+ $1.04M The community s premier senior center offers over 200 different programs, classes and events each year designed specifically for those who are 50 years of age and older. The Center is nationally recognized and accredited by both the National Council on Aging and National Institute of Senior Centers. Well over 800 seniors use the Center on an average day, assisted by staff and many volunteers. Capital Construction - $116.88M A small sampling of infrastructure improvement projects in the FY 2018 budget includes site improvements to the 3.8 acres of new park land at Riverfront Park; the first year of project expense for the City s new voter-approved public safety facility; widening and other enhancements to Brown Road NE; streetlight luminaire and pole replacements; improvements to the stormwater system on McKay Drive S; design work to replace the Ferry Street sanitary sewer pump station; 2,000 linear feet of waterline on Ewald Avenue S; and water main replacements on Redwood and Hemlock streets, both in West Salem. Salem Municipal Airport $1.95M Created by Salem voters in 1928, McNary Field is operated by the City and includes two runways and 130 leased hangars and business spaces on 751 acres. In its 2014 Oregon Aviation Plan update, the Oregon Department of Aviation found that Salem airport supports over 630 local jobs onsite and another 640 local jobs indirectly with total annual wages of $54.3 million and business sales of $221.1 million. Story Time at Salem Public Library Salem Public Library $4.97M Police patrol, investigations, and support services $43.04M Fire emergency rescue and paramedic response $31.27M Municipal Court $1.98M Planning, current and long range $2.13M Recreation (in addition to Center 50+) $1.21M Tourism promotion and Convention Center marketing $1.31M call taking and dispatch $10.96M Federal community development and housing programs $3.59M City of Salem Page 8 FY 2018 Budget in Brief