C I T Y M A N A G E R S M E S S A G E

Transcription

1 BUDGET IN BRIEF Fiscal Year

2 C I T Y M A N A G E R S M E S S A G E The focus of the fiscal year 2018 budget process was to maintain the current service levels in a growing community and continue to support actions which make Des Moines a top ranked vibrant capital city. Des Moines is currently growing at the fastest pace compared to any decade since The City s population is at an all-time time record high. Likewise, building and construction in the City is at an all-time high with $782 million dollars in valuation approved in calendar year Activity is picking up in neighborhood corridors around the City. The fiscal year 2018 budget includes a 12-cent tax rate increase which will provide the additional resources to support these exciting times of growth and diversity of the City. Those additional resources include positions related to building and construction, public information requests, firefighting services, body camera digital evidence management, contract sales, human rights, and transportation planning. Growth is expected to continue, and the City will likely face challenges from changes in state and federal policies and funding. To establish a vision and in preparation for future challenges, the City has instituted a strategic planning process that will continue to be updated annually. We are a community that embraces diversity and is resolute in providing city services in a fair and inclusive manner. The commitment by our City Council, community leaders, and neighborhoods will ensure that the City of Des Moines perseveres as an extraordinary place to live, work, and play. Scott Sanders City Manager 2 Cover photo courtesy of Jason Harmer

3 Mayor T.M. Franklin Cownie At-Large Ward 1 Christopher Coleman ccoleman@dmgov.org Bill Gray BillGray@dmgov.org Skip Moore skipmoore@dmgov.org Linda Westergaard LindaW@dmgov.org At-Large Ward 2 M A Y O R A N D C O U N C I L Ward 3 Ward 4 Christine Hensley CLHensley@dmgov.org Joe Gatto joegatto@dmgov.org 3

4 A B O U T D E S M O I N E S Property tax is the levy on the value of a property. The total property tax collected funds various authorities - typically public school districts, cities, and counties. Each authority sets its own levy rate. The City of Des Moines receives 36 cents of every property tax dollar collected. These dollars fund the daily operations of the city and pay the principal and interest on general obligation bonds which fund capital projects. 4

5 The total tax rate for fiscal year 2018 is $ The budget was approved with a 12-cent increase to the property tax rate to provide for continuation of current services at a level to meet the demands of a growing community and to allow the City to address some of the highest priority needs identified by the community. A B O U T D E S M O I N E S 5

6 The City of Des Moines is governed by a system called the Council-Manager-Ward Plan. Residents vote to elect a Mayor and two at-large Council members. Residents of the four wards vote to elect a Council member to represent their area of the city. O R G A N I Z A T I O N A L S T R U C T U R E The City Council appoints the City Manager, City Attorney, City Clerk, and Boards & Commissions. The Library Director is appointed by the Library Board while all other department directors are appointed by the City Manager. 6

7 A budget process is a continuous set of activities undertaken throughout the year. Throughout the year, the City Council conducts hearings and meetings that result in policy actions incorporated in the recommended budget. Budget workshops typically begin in late summer or early fall and provide the public the opportunity to provide feedback. During the fall of 2016, the City launched a public engagement effort called SpeakUpDSM which invited residents to speak up on the future of the City. The budget was the first series in the SpeakUpDSM effort. B U D G E T P R O C E S S 7

8 FY2018 BUDGET HIGHLIGHTS The fiscal year 2018 budget included a 12-cent tax rate increase that will provide the additional resources necessary to maintain service levels of a growing community. Some highlights of the fiscal year 2018 budget are listed here. With record setting building and construction valuation, the addition of six additional Inspectors and Engineers will keep development moving forward. Thirteen added firefighter positions will increase the in-service level of apparatus to 95 percent daily and enhance customer service levels. B U D G E T S U M M A R Y Body cameras in the Police Department require management of the digital evidence collected. One position was added to perform that function. Four contract sales positions will help neighborhoods alleviate the issue of blight and facilitate revitalization by providing for more monitoring and enforcement. A Human Rights Equity Coordinator position was added to address conditions that affect a person s ability to move up the socioeconomic ladder and ensure equitable allocation of City resources. A Transportation Planner position will help with the implementation of a Complete Streets Policy and work to incorporate multi-modal views in the planning process. One position was added to handle the all-time high public information requests in a more efficient and economical manner. 8

9 FY2018 ADOPTED OPERATING AND CAPITAL BUDGET $686,924,570 The total budget of $687 million is often seen as two budgets - a $570 million operating budget and a $117 million capital budget. The operating budget is comprised of the following funds: General Fund (25%) - for general tax revenues and other receipts for the general operation of the city; Enterprise Funds (19%) - for operations of City facilities and services that are supported primarily by user charges; Special Revenue Funds (17%) - for specific targeted purposes or to segregate income or transfers for reporting requirements; Debt Service (15%) - to pay principal and interest on general obligation bonds and lease purchase payments funded through debt service tax revenue; and Internal Service (7%) - for services and commodities provided by one city department to other city departments. The capital budget (17%) includes funding for major construction or acquisition projects finance in whole, or in part, through the issuance of bonds, federal funds, state funds, or Enterprise Fund user fees. B U D G E T S U M M A R Y 9

10 The operating budget supports the day to day operations of sixteen City departments. The budget of some departments contain expenditures beyond their daily operations. For example, Finance department expenditures include debt payments for capital improvement projects and economic development debt payments. B U D G E T S U M M A R Y The Capital Improvement Plan is divided into ten funds including seven tax supported and three enterprise fund project categories. 10

11 GENERAL FUND $169,089,790 The General Fund is the primary operating fund for a government. The largest source of revenue for the City of Des Moines is property taxes. The General Fund budget provides for core city services - police, fire, library, parks, and neighborhood services. Street repairs and maintenance are funded primarily from Road Use Tax Fund allocations from the State. User fees provide funding for sewer maintenance and construction, parking garage operations, and solid waste collection and are accounted for in their respective enterprise funds. The chart below shows the allocation of the General Fund budget - 60 percent of the general fund budget is for police and fire services. G E N E R A L F U N D 11

12 DEBT Cities issue debt because they are not able to accumulate cash from current revenues to pay the high cost of acquiring or replacing buildings, streets, bridges, and recreational facilities. The cost of the debt (principal and interest payments) is spread over a period of 5 to 20 years to match the useful life of the asset providing a fair distribution of costs. The expense is shared by taxpayers living in the city during the useful life of the asset, not just at the time of construction. Borrowing does come with a cost interest expense and cities have to be careful not to issue debt that exceeds their ability to repay. D E B T The State of Iowa has placed limits on the amount of debt a city can issue and the Des Moines City Council has further restricted the amount of allowable debt payable from property taxes. The City maintains a very high rating from Standard & Poor s and Moody s Investor Service for general obligation bonds partly because of adherence to the debt policy set by City Council. Strong ratings result in lower interest rates on debt. Council continues to adopt capital improvement plans which hold debt steady in an effort to maintain a stable tax rate. 12

13 FUND BALANCE Fund balance is the amount of resources available for future spending that government normally sets aside for emergencies, to cover fluctuating revenues or expenses (cash management), or unforeseen events. Cities may also attempt to maintain a large fund balance as they are viewed favorably by bond rating agencies, resulting in a lower cost of borrowing for cities on capital projects. However, a large balance could be viewed negatively, as some would argue government should not raise money until it is needed. How much fund balance a city should maintain is subject to debate with many factors affecting what the right amount should be. Recommendations for a minimum fund balance range from five percent of annual operating expenditures to several times that amount. Sometimes the desired target is expressed in days such as equal to one month s operating expenditures. The bottom line is that the fund balance policy should take into account all the conditions that make a governmental entity unique. The current Council set a goal to maintain a fund balance of no less than 15 percent of annual operating expenditures. Over the last several fiscal years, measures have been taken during the budget process to increase the unreserved, undesignated General Fund balance. Fiscal year 2018 ending fund balance will be approximately 15 percent of annual operating expenditures. F U N D B A L A N C E 13

14 P E R S O N N E L PERSONNEL The budget provides funding for 1,552 permanent, full-time employees. Approximately 80 percent of these employees are represented by one of eight labor unions. The City also employs part-time and seasonal employees - primarily during the summer months to provide a full range of activities and programs for the residents and visitors of Des Moines. 14 Police and fire personnel represent 66 percent of the 1,137 General Fund positions.

15 NEED MORE BUDGET INFORMATION? The entire Adopted Operating Budget and Capital Improvement Program are available at budget.dmgov.org. Research & Budget Office Finance Department 400 Robert D. Ray Drive Des Moines, Iowa Bob Fagen Finance Director Dan Ritter Management Services Director Joe Brandstatter Budget Analyst II Jay Carlson Management Analyst Jessica Butler Budget Analyst II Kurt Rueckel Senior Budget Analyst LEARN MORE ABOUT CITY GOVERNMENT The City of Des Moines: Iowa s capital city and local government servicing more than 215,000 residents, 51+ neighborhoods, over 4,000 acres of parkland and 81 miles of trails. The City of Des Moines strives to be a financially strong city with exceptional, customerfriendly city services, fostering a diverse and involved community. DMTV Channel 7 15

16 WHO TO CALL (Area Code 515) City of Des Moines Police/Fire Non-Emergency Public Works 24-Hour Customer Service Animal License Building Permits City Clerk City Manager Human Resources Library Information Mayor & Council Office Neighborhood Complaints Park & Recreation Information Parking Tickets Tax Abatement Non-City Services Birth Certificates Driver s License Information Marriage License Property Tax Vehicle Registration WHERE TO GO Park facility rentals, pools passes, program registration Pay Your Parking Ticket City Clerk s Office or online at Buy a Smart Card City Hall 3rd & Court Parking Garage nd Avenue 9th & Locust Parking Garage Locust Street Wellmark YMCA Lobby Grand Avenue 16