City of Buda Proposed Financial Plan Kenneth Williams, City Manager August 30, 2016

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1 City of Buda Proposed Financial Plan Kenneth Williams, City Manager August 30,

2 Acknowledgements Mayor and City Council Finance Staff: Sidonna Foust, Carolyn Reininger, Liz DeLeon, June Ellis Staff-Directors 2

3 Video

4 Process 4

5 What is the Budget? Legal Document as authorized by the Charter Financial Plan for the City which is Based on Estimates of Revenues and Expenditures Fiscal Year runs October 1 thru September 30 Internal Control Process-Referenced by Auditors Policy Document that Funds Plans and Priorities Public Record Showing City s Goals to Citizens 5

6 Process to Date Zero Based Budget-Limited new expenditures-focus on completing existing projects March Six month actuals and year end projections April workshop re: City Council: Financial Process Review Staff Development & Team Building & Mission and Vision Review May 14 1 st Budget Retreat Financials provided & Council identified goals an objectives, new program considerations Nine workshops/council meeting to discuss budget items August 30 th City Manager s presentation 1 st Public Hearing on Budget 1 st Public Hearing on Tax Rate

7 City Council Priorities Proper Staffing Equitable Compensation Controlled CIP Water/Wastewater Pursue Environmental Stewardship Tourism-Promote Outdoor Theme Drainage Fee Bond Prop Execution Public Safety Responsible Tax Rate Maintain Property Values Stabilized Budget Parks-Water Options-Garison Roads-Partner with County and State Economic Development 7

8 Building-Unemployment Rates-Credit Rating-Tax Rate-Property Values-Sales Tax ECONOMIC INDICATORS 8

9 Population Growth ,705 9

10 National Unemployment Rates Buda 3.6% Texas 4.6% U.S. 4.9% 10

11 New Permit Trends 11

12 City of Buda s Credit Rating AA with a Positive Outlook 12

13 Recognition Scenic City 2015 Texas Chapter of the American Planning Association Community of the Year 2015 Texas Chapter of the American Planning Association Planning Excellence Award 2016 Texas Chapter of the American Planning Association Planning Excellence Award (third consecutive year) 13

14 Financials 14

15 Sales Tax $700,000 $600,000 $500,000 Sales Tax Revenue -3.8% -8.5% -2.8% -2.3% -0.5% -0.6% -0.8% Totals = $2,278, Totals = $2,494, Totals = $3,155, Totals = $3,461, Totals = $3,355, % +3.3% +5.2% +5.8% % $400,000 $300,000 $200,000 $100,000 $ $350,220 $368,061 $348,136 $402,073 $447,004 $315,175 $367,915 $464,893 $434,950 $395,246 $288,879 $453, $443,858 $477,246 $441,952 $437,742 $539,558 $400,693 $391,899 $450,165 $409,198 $368,348 $466,664 $406, $406,095 $481,692 $438,939 $433,145 $576,451 $396,694 $382,608 $560,410 $454,951 $451,326 $520,570 Proposed Sales Tax Revenue Increase less than 4% 15

16 Property Tax Property Tax Revenue $1,100,000 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 Total Property Tax = $2,638, = $3,182, = $4,226,494 General Fund (100) Portion of Property Tax Totals = $648, Totals = $774, Totals = $922, Totals = $1,017, Totals = $1,427, Proposed Totals = $1,667,324 I&S Fund (700) Portion of Property Tax Totals = $1,078, Totals = $1,071, Totals = $1,074, Totals = $1,621, Totals = $2,794, Proposed Total = $4,134,396 $100,000 $- OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP $14,150 $114,537 $1,338,251 $978,069 $109,520 $4,727 $52,147 $9,093 $9,797 $2,931 $1,963 $ $88,195 $97,395 $1,595,018 $1,164,731 $148,754 $47,452 $23,242 $5,462 $3,585 $5,838 $3,220 $ $25,497 $221,425 $1,733,251 $1,883,061 $253,547 $40,502 $25,675 $17,193 $15,751 $10,590 16

17 Tax Rate Total proposed tax revenue for FY is $5,176,670 This proposed budget is estimated to increase total property taxes over last year s budget by $1,078,244 or 26.3%. Of that amount $375,738 is estimated tax revenue from new property added to the tax roll in this year. Property Tax Comparison FY FY $ Generated Adopted & Proposed Tax Rate $5,176,670 Effective Tax Rate $5,063,682 Rollback Rate $5.176,670 M&O Tax Rate $1,667,324 Debt Rate $3,509,346 Fiscal Year City debt obligations secured by property tax is $3,510,031. The increase for General Fund M&O is $279,166. I&S increased by $799,078 Record Vote on Proposed Tax Rate (August 16, 2016) Mayor Todd Ruge yes Mayor Pro Tem Wiley Hopkins yes Council Member David Nuckels yes Council Member Angela Kennedy yes Council Member George Haehn yes Council Member Eileen Altmiller yes Council Member Bobby Lane Yes 17

18 Tax Rates in Central Texas Cities City Tax Rate Leander.5990 Pflugerville.5405 Kyle.5848 San Marcos.5302 Hutto.5585 Cedar Park.4795 Round Rock.4147 BUDA.3704 Dripping Springs Proposed rate 18

19 Tax Rate Cost What does it mean to the owner of a $200,000 home? Year Tax Rate M&O rate/$ I&S rate/$ Total per Year /$ /$502 $ /$ /$460 $695 $46 more per year $3.83 per month

20 Tax Rate Considerations Increase in Rate Voter Approved Proposed Rate due to Bond Propositions is 35% less than the rate told to the Voters before the election-including Additional CO issuance for Municipal Site Improvements Operations and Maintenance Rate Adjusted only.0016 cents 20

21 Proposed Budget Budgeted Revenue Proposed Revenues Budgeted Expenses Proposed Expenses Difference General Fund $ 9,580,000 $ 10,463,824 $ 9,580,000 $ 10,463,824 $ 0 Water $ 2,739,725 $ 3,869,349 $ 2,982,555 $ 3,212,010 $ 657,339 Wastewater $ 3,674,877 $ 3,982,080 $ 3,273,427 $ 3,329,504 $ 652,576 Interest & Sinking $ 4,032,169 $ 5,552,705 $ 4,033,670 $ 4,928,339 $ 624,336 Hotel/Tourism $ 601,380 $ 650,000 $ 505,708 $ 640,349 $ 9,651 Other $ 2,746,613 $ 3,203,911 $ 2,700,163 $ 2,891,491 $ 305,920 TOTALS $ 23,374,764 $ 27,821,869 $ 23,075,523 $ 25,465,517 $2,349,852 CIP (Projects) $ 5,764,860 $ 62,959,826 $ 6,135,543 $ 62,616,476 $ 343,350 21

22 Departmental Details FUND $ Budgeted Proposed Expenses Expenses LY Bdgt Diff General Fund $ 9,580,000 $ 10,463,824 $ 883,824 Administration $ 686,378 $ 953,340 $ 266,962 City Secretary $ 229,348 $ 235,786 $ 6,438 Human Resources $ 145,622 $ 128,816 $ (16,806) Non-Departmental $ 616,866 $ 664,043 $ 47,177 Finance $ 579,630 $ 607,881 $ 28,251 EDC $ 2,076,072 $ 2,152,913 $ 76,841 Library $ 469,155 $ 465,186 $ (3,969) Parks & Rec $ 479,555 $ 744,896 $ 265,341 Sportsplex* $ 131,912 $ - $ (131,912) FUND $ Budgeted Propsd Expenses Expenses LY Bdgt Diff Water Fund $ 2,982,555 $ 3,212,599 $ 230,044 Wastewater Fund $ 3,273,427 $ 3,330,372 $ 56,945 Engineering & Planning $ 1,089,224 $ 957,813 $ (131,411) Streets & Drainage $ 823,705 $ 959,743 $ 136,038 Fleet Maintenance $ 119,162 $ 157,994 $ 38,832 Municipal Court $ 116,873 $ 125,500 $ 8,627 Public Safety $ 1,593,798 $ 1,896,825 $ 303,027 Animal Control $ 81,400 $ 86,864 $ 5,464 Information Technology $ 341,300 $ 326,224 $ (15,076) *Sportsplex included with Parks & Rec for FY 2017

23 Total Budget Revenue and Expenditures Revenue $90,781,695 Expenditure $88,081,993 23

24 FY 2016 Budget Expenditures Budget includes $25,472,017 for General, Water and Wastewater Funds, etc. General Fund Expenditures $10,463,824 Capital Improvement Expenditures $62,616,476 Interest & Sinking $4,924,579 Wastewater $3,329,504 Water $3,212,010 Other including LGC, Sanitation, HOT, Library Spec. Rev. $3,538,340 24

25 General Fund Revenues Miscellaneous 5% Reimbursements 6% Fees 3% Permits & Licenses 9% Franchise Tax 5% Sales Tax 56% Property Tax 16% Total General Fund Revenues = $10,463,824 25

26 General Fund Expenses Public Safety 19% Animal Control 1% Administration 9% City Secretary 2% Human Resources 1% Non-Departmental 7% Municipal Court 1% Fleet Maintenance 2% Finance 6% Streets & Drainage 10% Engineering & Planning 9% Parks & Rec 7% Library 5% EDC 21% Total General Fund Expenses = $10,463,824 26

27 Total Revenues $27,721,869 Hotel/Tourism 2% Other 12% General Fund 38% Interest & Sinking 20% Wastewater 14% Water 14% 27

28 Total Expenses Hotel/Tourism 3% Other 11% I&S/Debt 19% General Fund $10,463,824 41% Wastewater 13% Water 13% Total Expenses = $25,465,517 Capital Projects = $62,616,476 28

29 Projected Cash Balance Fiscal Year-End General Fund Cash Balance $3,584,044 Average Monthly Expenses $871,985 x 3.5 mo. Required Cash Balance $3,051,947 Water Fund Cash Balance $3,804,024 Average Monthly Expenses $267,716 x 3mo Required Cash Balance $803,150 WasteWater Fund Cash Balance $7,524,819 Average Monthly Expenses $277,531 x 3mo Required Cash Balance $832,593 Hotel Fund Cash Balance $901,935 Average Monthly Expenses $53,362 x 3mo Required Cash Balance $160,086 Parks Capital Cash Balance $479,712 Library Cash Balance $25,000 Cash Balances Do NOT include Certificates of Obligation dollars

30 Debt Balances as of October 1, 2015 $2,345,000 Certificates of Obligation Series 2006 $6,120,000 Certificates of Obligation Series 2008 $2,930,000 General Obligation Refunding Bonds, Series 2008 $3,560,000 Certificates of Obligation, Series 2010 $5,915,000 General Obligation Refunding Bonds, Series 2010 $505,000 Certificates of Obligation Wastewater, Series 2006 $3,275,000 Certificates of Obligation, Series 2011 (tax-supported) $3,275,000 Certificates of Obligation, Series 2011 (utility-supported) $4,445,000 Certificates of Obligation, Series 2014 (tax-supported) $4,445,000 Certificates of Obligation, Series 2014 (utility-supported) $3,605,000 Certificates of Obligation, Series 2014a (utility-supported) $9,760,000 Bond Issue #1, Series 2015 (tax-supported) $1,190,000 CO Series 2016 (utility-supported) $41,150,000 GO Series 2016 (tax-supported) $3,655,000 CO Series 2016A (tax-supported) Total Debt payments for = $4,924,579 Utility Supported = $1,418,310 Tax Supported =$3,510,031 (29% W&WW Revenue) (81% Gen Fund Revenue) TOTALS Principal Balance Interest Balance Total P&I Balance Payments Payments $ 1,265,000 $ 368,126 $ 1,633,126 $ 135,841 $ 136,947 $ 4,505,000 $ 1,152,837 $ 5,657,837 $ 394,113 $ 395,065 $ 2,080,000 $ 348,153 $ 2,428,153 $ 292,885 $ 285,087 $ 3,025,000 $ 956,031 $ 3,981,031 $ 257,638 $ 257,338 $ 4,660,000 $ 1,017,975 $ 5,677,975 $ 510,838 $ 506,238 $ 395,000 $ 114,699 $ 509,699 $ 40,909 $ 44,685 $ 520,000 $ 181,275 $ 701,275 $ 42,100 $ 41,600 $ 2,415,000 $ 839,250 $ 3,254,250 $ 194,500 $ 197,200 $ 3,435,000 $ 1,324,049 $ 4,759,049 $ 242,428 $ 239,528 $ 1,010,000 $ 380,094 $ 1,390,094 $ 67,923 $ 67,122 $ 3,605,000 $ 1,222,807 $ 4,827,807 $ 249,185 $ 249,994 $ 9,430,000 $ 2,929,826 $ 12,689,826 $ 296,031 $ 1,190,000 $ 233,971 $ 1,423,971 $ 95,733 $ 41,150,000 $ 26,718,789 $ 67,868,789 $ 1,852,889 $ 3,655,000 $ 5,508,222 $ 5,163,222 $ 258,822 $ 82,340,000 $ 43,296,104 $121,966,104 $ 2,428,360 $ 4,924,579 30

31 Human Capital 31

32 Compensation Philosophy City s Compensation Philosophy: Desired Market Position Competitive Pay Practices Equitable and Flexible Pay Plan Design Open-Range Pay Increase Methods Performance Based

33 Retention is Key FY Reasons for Staff Turnover Turnover Rate is 21% Retention Strategies: 23.5% 11.8% 0.1% 11.8% 11.8% 41.2% advanced career opportunity/pay location retirement management career change other Offer competitive compensation package Provide continuous training and development opportunities Emphasize succession planning and develop career plans Strong relationships Positive and supportive work environment 33

34 Benefits Changes in employee compensation and benefits: UnitedHealthcare insurance 2% renewal rate MetLife Dental (orthodontia was included) -3% renewal rate MetLife Vision and Unum Life insurance no increase 2% COLA + up to a 2% merit increase mid-year 34

35 Compensation Study Evergreen Solutions, LLC completed a compensation and classification study 25 pay grades established adjusted employees to minimum salary range created consistent range spreads aligned salaries with compensation philosophy Revising job descriptions 35

36 New Staffing Project Manager (Bond Props) Public Utilities Engineer GIS Analyst Parks Maintenance Workers (2) Main Street Manager and Program Certified Auto Technician Police Officers (2) 36

37 Highlights GENERAL FUND 37

38 Police Department Two New Police Officers -Mental Health Officer ($78,000) Reim. Yr. 1 -Patrol Person ($78,000) Reclassification of two Patrolpersons to Sergeant ($25,088) -Assures Supervisor on Duty all times/additional officer on night shift Two New Patrol Cars ($88,000) 3.1% Pay Increase plus 2% Merit Training Budget Increased 20% 38

39 Administration Inclusion of Assistant City Manager and Public Information Officer into Department Increased Liability Insurance $30,000 Legal Fees $50,000 39

40 Finance Audit $63,500 Hays County Appraisal Fees $26,742 Sales Tax Audit $6,000 40

41 Library and Parks Library $3,000 for Storytime Parks and Sportsplex Budgets Combined Garison Park $25,000 $18,000 to Furnish New Parks Building Oak Wilt $7,500 41

42 Streets and Drainage $40,000 Drainage Utility Fee Study Streets Criteria Manual $28,000 (Total of $84,000 split with water and wastewater funds) $10,000 Mower 42

43 Fleet Maintenance ASE Certified Mechanic Vehicle Analyzer Machine 43

44 Non-Profit Funding Funded Per City Council Direction Onion Creek Senior Citizens Center--$7,000 Early Childhood Intervention--$5,000 Buda Food Bank--$2,500 Hays County Food Bank $2,500 Girls Empowerment Network $2,000 Hays County Child Protective Board $1,500 Totals=$20,500 44

45 Economic Development 45

46 Economic Development Sales Tax Paid to EDC--$1,928,259 Cabela s Related Tax Distribution City Sales Tax Paid to LGC $385,000 City Property Tax Paid to LGC $195,000 City Hot Tax Paid $140,000 EDC Funds Paid to Buda Parks & Recreation $40,000 46

47 Economic Development Excell Fueling Systems Buda Mill & Grain SpeedTech Lighting 47

48 Economic Development Candlewood Suites & Best Western Plus Zaxby s Reliable Automotive White Oak Preserve 48

49 Tourism 49

50 Hotel/Motel Funding Buda Lions Club Country Fair and Wiener Dog Races - $6,000 in HOT grant money, $4,500 in sponsorship money = $10,500 Budafest - $1,000 in HOT grant money, $1,000 in sponsorship money Buda Area Chamber of Commerce Fajita Fiesta - $6,000 Capital Area Police Motorcycle Chute Out - $6,000 50

51 Hotel/Motel Budget Highlights Increased Funding for Statewide Advertising Leasing of an Additional Billboard Repair of Stagecoach House Roof Monument Sign Carryover Two New Promotional Videos 51

52 RATES-BILL COMPARISON WATER/WASTEWATER FUNDS 52

53 Rate Structure Increase water rate by 5% and increase wastewater rate by 2%. Potential Future Rate Increases Utility FY18 FY19 FY20 FY21 Water 10.0% 5.0% 5.0% 5.0% Wastewater 2.0% 3.0% 2.0% 2.0% First wastewater increase in three years. With these rate increases and the projected future expenditures, the balance of both funds would remain above a 3-month reserve. Keep current volume tiers. The volumes were adjusted last year to increase bills for higher users more than bills for lower users. No additional change is recommended this year. Current Rate Proposed Rate Tiers 0 6,000 $ 3.28 $ ,001 12,000 $ 4.82 $ ,001 18,000 $ 6.89 $ ,001 24,000 $ 8.00 $ ,001 30,000 $ 9.53 $ ,001 40,000 $ $ ,001 9,999,999 $ $

54 Residential Bill Comparison City - Sorted by Residential 10,000 Gallons/Month Water Use - WATER WASTEWATER TOTAL WATER & WASTEWATER RESIDENTIAL WATER RESIDENTIAL SEWER RESIDENTIAL Bill for 5,000 Gallons Bill for 10,000 Gallons Bill for 5,000 Gallons Bill for 10,000 Gallons Bill for 5,000 Gallons Bill for 10,000 Gallons Austin $ 38 $ 81 $ 50 $ 100 $ 88 $ 180 Hutto $ 61 $ 101 $ 40 $ 62 $ 100 $ 162 San Marcos $ 37 $ 64 $ 45 $ 79 $ 82 $ 144 Taylor $ 40 $ 57 $ 47 $ 72 $ 87 $ 129 Kyle $ 56 $ 86 $ 17 $ 35 $ 74 $ 121 Buda (Proposed) $ 28 $ 52 $ 48 $ 67 $ 77 $ 119 Buda (Current) $ 27 $ 50 $ 47 $ 65 $ 75 $ 115 Belton $ 33 $ 50 $ 35 $ 61 $ 68 $ 111 Lockhart $ 34 $ 55 $ 30 $ 53 $ 63 $ 108 Round Rock $ 33 $ 45 $ 34 $ 51 $ 67 $ 97 Schertz $ 34 $ 47 $ 27 $ 44 $ 61 $ 91 Pflugerville $ 34 $ 56 $ 27 $ 32 $ 61 $ 88 Georgetown $ 32 $ 41 $ 29 $ 29 $ 61 $ 70 *Other cities listed at rate 54

55 Commercial Bill Comparison City - Sorted by Commercial 50,000 Gallons/Month Water Use - WATER WASTEWATER TOTAL WATER & WASTEWATER COMMERCIAL COMMERCIAL WATER COMMERCIAL SEWER Bill for 50,000 Gallons Bill for 200,000 Gallons Bill for 50,000 Gallons Bill for 200,000 Gallons Bill for 50,000 Gallons Bill for 200,000 Gallons Taylor $ 2,371 $ 9,361 $ 275 $ 1,037 $ 2,646 $ 10,398 Austin $ 438 $ 1,368 $ 473 $ 1,862 $ 911 $ 3,230 Hutto $ 521 $ 1,725 $ 341 $ 1,100 $ 862 $ 2,825 San Marcos $ 450 $ 1,552 $ 410 $ 1,450 $ 860 $ 3,002 Kyle $ 563 $ 1,754 $ 197 $ 786 $ 760 $ 2,540 Buda (Proposed) $ 408 $ 1,549 $ 213 $ 762 $ 621 $ 2,311 Schertz $ 298 $ 860 $ 322 $ 1,389 $ 619 $ 2,249 Buda (Current) $ 389 $ 1,475 $ 209 $ 748 $ 598 $ 2,222 Lockhart $ 273 $ 1,045 $ 248 $ 964 $ 521 $ 2,009 Pflugerville $ 415 $ 1,435 $ 82 $ 270 $ 497 $ 1,705 Round Rock $ 222 $ 630 $ 239 $ 747 $ 461 $ 1,378 Belton $ 190 $ 714 $ 237 $ 916 $ 427 $ 1,629 Georgetown $ 243 $ 603 $ 162 $ 514 $ 404 $ 1,117 *Other cities listed at rate 55

56 Bond Propositions 56

57 Bond Projects Proposition 1: City Hall/ Library - $21,000,000 Additional funding for site related improvements - $4,005,000 TOTAL - $25,005,000 Proposition 2: Public Safety - $6,750,000 Proposition 3: Streets - $12,250,000 Street improvements: FM 967/Main St Intersection improvements Main Street improvements from Cabela's Drive to Cedar St. Old Goforth Rd. Improvements San Antonio Street improvements 57

58 Bond Projects Proposition 4: Drainage - $7,000,000 Drainage Improvements: West Goforth FM 2770 Fire Station Bluff Street Houston Street Oxbow Neighborhood Lifschutz Headwaters Proposition 5: Parks - $8,000,000 Purchase of John D. & Byrd Mims Garison Memorial Park - $1,098,986 Remaining- $6,901,014 Original Bond Budget Total - $55,000,000 +plus $4,005,000 for site improvements - Minus John D & Byrd Mims Garison Park TOTAL - $57,906,014 58

59 Prop 3 - Streets, $11,669,214 Remaining Balances on 2014 Bond Program Prop 4- Drainage, $6,800,413, Prop 0 5- Parks, $6,446,956, 0, 0, 0 Prop 2- Public Safety, $5,428,292 * Prop 1 includes $4.05M Certificate of Obligation *Prop 1- City Hall/Library, $22,512,513 59

60 Capital Improvement Program 60

61 FY CIP Projects by Program Purple Pipe - Drainage - $40,000 Facility - Planning & Beautification - $62,000 Sidewalk & Trails - Transportation $28,000 Parks - $18,750 Water - $28,000 Wastewater - $22.9M 61

62 5-Year CIP Projects by Program (FY 16/17 FY20/21) Transportation $61.2M Water $11.2M Wastewater $33.6M 0% 1% 0% 11% 25% 8% 2% 45% Purple Pipe $1.1M Planning & Beautification $368K Drainage $14.7M 8% Facility 1 Does not include any 2014 Bond Projects Parks $10.7M Sidewalk & Trails $2.8M 62

63 CIP Projects Transportation Revise Transportation Criteria Manual - $28,000 Water Revise Water Criteria Manual - $28,000 Wastewater Revise Wastewater Criteria Manual - $28,000 Expansion of WWTP (1.5MGD to 3.5MGD) -$18,217, inch effluent force main discharge line to Sunfield - $4,670,000 Drainage Completion of Drainage Utility Fee -$40,000 Planning & Beautification Monument sign (FM 967/FM 1626) - $62,000 Parks Furniture, fixtures and equipment for new parks maintenance facility - $18,750 63

64 Items Cut In General Fund $100,000 for Garison Park-Parks Dept. will not contract this work and will do in house for less $60,000 Animal Control Truck $65,000 Road Pavement Study $60,000 Roadway Impact Fee Study 64

65 Remaining Process September 6 th 2 nd Public Hearing on Budget 2 nd Public Hearing on Tax Rate 1 st Reading on Budget Ordinance 1 st Reading on Tax Rate Ordinance

66 September 20 th 2 nd Reading & Adoption of Budget Ordinance 2 nd Reading & Adoption of Tax Rate Ordinance

67 Summary Comprehensive Process City Council Priorities Positive Economic Indicators Conservative Forecasting Balanced General Fund Required Fund Balances Emphasis on Bond Propositions Completion of CIP Projects 67

68 QUESTIONS COMMENTS 68