Levy Lid Lift or Metropolitan Park District

Transcription

1 Levy Lid Lift or Metropolitan Park District

2 Why We Are Discussing These Two Options

3 April 2012 City Happenings The city has no funding to continue to rent its interim City Hall space beyond July of 2014.

4 April 2013 City Happenings

5 July 1, 2013 City Council Meeting Presentation on Interim City Hall & Other Service Financing Options Levy Lid Lift It is recommended that the City Council not place this measure on the ballot in November (2013), and instead fund the rent of Interim City Hall in 2014 from the reallocation of resources (e.g., services to citizens not impacted). City can afford to do this for one (1) year pending updates to the six-year financial forecast followed by the development of 2015/2016 biennial budget. As part of annual City Council retreat in early 2014 evaluate financing options specific to a new Civic Center as well as financing options (e.g., property tax levy lid lift) to address condition of city s existing facilities, particularly, library, police station and recreation pavilion beginning in 2015.

6 So what has happened? With no new revenues in place to pay rent in 2015, and no cuts made to address it, the General Fund balance was drawn down. With 2015 actual expenditures being substantially higher than actual 2015 revenues, the General Fund balance was further drawn down. With no new revenues in place to pay rent in 2016, and no cuts made to address it, the General Fund balance is being further drawn down.

7 $16,000,000 Actual Revenues, Expenditures & Ending Fund Balance Actual Revenues Actual Expenditures Ending Fund Balance $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $ Actual Revenues $12,933,177 $12,168,793 $12,895,438 $13,057,352 $12,931,300 $13,303,745 $13,212,373 $12,164,328 $12,529,258 Actual Expenditures $13,865,676 $12,793,777 $13,175,425 $13,458,786 $13,248,977 $12,784,566 $14,409,451 $13,867,487 $15,017,485 Ending Fund Balance $3,934,363 $3,001,865 $2,376,881 $2,096,894 $1,695,460 $1,377,783 $1,896,962 $699,884

8 Priorities of the Current Financial Condition Priority 1: Fund the cost of renting at Redstone. When the City signed documents to move into Interim City Hall at Redstone in early 2009, the impacts of the Great Recession were not yet known. With the Recession, General Fund revenues declined, and the City had to pay much of the rent from the General Fund s balance. The rent is a contractual obligation of the City. If an ongoing source of funding is not identified to pay the rent at Redstone (or somewhere else), this annual cost will cause the General Fund to continue to decline, reserves will be left unfilled, and service levels will be reduced.

9 Priorities of the Current Financial Condition Priority 2: Rebuild the Strategic Reserve Fund and General Fund Balance. If these balances are not restored to a healthy level, the City will not have funds available to unanticipated needs. In addition, the State Auditor may raise a concern regarding the City s financial health. This in turn can lead to a downgrade of the City s bond rating and higher interest rates when going to the bond market for funding projects.

10 Priorities of the Current Financial Condition Priority 3: Free up General Fund dollars for City Council priorities. Once funding is available for ongoing rent, and the General Fund balance and reserves are healthy, General Fund dollars can once again be applied to expand the City Council s priorities of public safety, infrastructure maintenance and economic development.

11 Action Strategies & Preventative Measures Through the Great Recession Revenue estimates reflect economic conditions Discretionary funding eliminated Restrictive General Fund spending practices City Attorney contract reduced to 2002 LOS Staff reductions through attrition. Overtime must be reviewed & approved by department director in advance Partnership between street maint & park services Communications Specialist position funded with General Fund resources reduced to half-time Civil Engineer II position assigned part-time to capital and construction program Employee Healthcare Task Force, resulting in transition to lower cost insurance plan Consolidation of customer service unit with police & finance Finance providing services to SNOCOM Fleet management best practices Transitioning to more fuel efficient fleet Providing fleet services to Shoreline and Brier Transitioned animal shelter provider to PAWS Jail services agreement with Okanogan County Programs transitioned from in-house to contract Fire & EMS services Custodial services Programs transitioned from contract to in-house Animal control Public Works sewer and storm pipe line television inspection system Thermoplastic street marking (e.g., crosswalks, stop bars) LED Street Light Retrofit project Unanticipated state & federal funds ($ mil) Opportunities for volunteers & interns Computer server virtualization Non-essential capital purchases delayed Fleet & equip, information technology, rec & parks Increased Services Public Safety (e.g., SWAT, code enforcement, animal control), Park Services, Streets & ROW Maintenance, and Facilities Maintenance Highest level of service in years -- low employee turnover Focus on economic development 11

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13 Recommendation Place a $0.70 Levy Lid Lift on the Ballot in 2016 To address the City Council s goal of Financial Stability the recommendation is to place a $0.70 levy lid lift on the ballot in The measure would be used for the following: Priority 1: Priority 2: Priority 3: $0.22 of the levy would go to cover the cost of renting at Redstone. This will go away following voter approval and construction of a new City Hall in four years. $0.23 of the levy would go to rebuild the Strategic Reserve Fund and the General Fund Balance. This will go away after four years. $0.25 of the levy would go for Recreation & Parks. This will go away when a park district of some form is approved that provides a similar level of funding.

14 What this Measure Will Do Provides a steady revenue source to pay rent at Redstone rather than continue to draw down the General Fund Balance and make service cuts. It also sets a firm timeline to get a new City Hall constructed with voter approval. Restores reserves and the General Fund Balance to pre-2014 levels. Provides a steady, dedicated revenue source to fund Recreation & Park programs, while also removing the annual General Fund subsidy. Currently, Recreation & Parks loses out in capital funding due to priorities of public safety. A dedicated revenue source will aid a backlog of capital projects. With the approval of the levy, the amount currently going into the Recreation Fund from the General Fund can be used to expand City Council goals such as public safety, street preservation, economic development and facilities.

15 Cost of the Recommended Levy Average Mountlake Terrace Home = $251,000 (2015 valuation) Levy Rate for Years 1-4 is $0.70 / $1,000 AV $0.70 x ($251,000 / $1,000) = $176 / Year (Years 1 4) After four years, levy rate drops to $0.25 / $1,000 AV $0.25 x ($251,000 / $1,000) = $63 / Year (After 4 years)

16 12, Average Total Property Tax Per Residence (State, County, City, etc.) 10, , , , ,

17 12, Average Total Property Tax Per Residence (State, County, City, etc.) Plus $0.70 Lid Lift Levy 10, , , , ,

18 Why Not a Park District? An MPD takes time to bring together, and we don t have time. With a levy lid lift as outlined, the community knows that the $0.70 levy will be reduced: It will be reduced after four years when (1) a new City Hall is constructed; and (2) the Strategic Reserve and General Fund balance are re-established; It will be further reduced when a Recreation & Park levy are approved in the future. With a Park District, there is no guarantee the levy ($0.75 or otherwise) will be reduced in the future. Because of this, the community may be less likely to approve it.

19 Recommendation Place a $0.70 Levy Lid Lift on the Ballot in 2016 To address the City Council s goal of Financial Stability the recommendation is to place a $0.70 levy lid lift on the ballot in The measure would be used for the following: Priority 1: Priority 2: Priority 3: $0.22 of the levy would go to cover the cost of renting at Redstone. This will go away following voter approval and construction of a new City Hall in four years. $0.23 of the levy would go to rebuild the Strategic Reserve Fund and the General Fund Balance. This will go away after four years. $0.25 of the levy would go for Recreation & Parks. This will go away when a park district of some form is approved that provides a similar level of funding.