County Administrator s Proposed Budget

Transcription

1 County Administrator s Proposed Budget Fiscal Year 2019 J. Brent Fedors 1

2 Agenda Introduction Setting the stage Objectives and guidance from the Board FY 2019 Proposed Budget Highlights Challenge and approach A look at individual funds General Fund (net of transfers), Education Funds, Social Services Funds, Capital Fund, Debt Service Fund, Enterprise Funds General Fund summary & revenue outlook The FY 2019 Proposed Budget Capital Improvement Plan Recommendations Suggested Tax Rate Advertising 2

3 Administrator s Personal Goals To listen, observe, and become intimately familiar with the Board s (and its members ) priorities and inclinations. To carry forward lessons learned from prior years and leverage them to create enhanced value in the future. To continuously engage with the Board in efforts to better anticipate its (and it s members ) changing expectations. To acknowledge community influences and be sensitive to the needs of each Board Member s constituencies. To propose a budget that perfectly aligns with the Board s intent, requiring little or no change by the Board prior to adoption. 3

4 Objectives To propose a balanced budget that: Aligns with Board guidance and strategic priorities Delivers enhanced value to County citizens Aligns resources with needs; promotes resource productivity Accurately projects anticipated expenditures, revenues, and vacancy / transfer credits Better leverages taxpayer dollars for public benefit Supports the current and future needs of our Community Fixes the County and Schools Compensation Deficit 4

5 Guidance from the Board Produce a budget that: Reflects compensation improvements as top priority Incorporates little or no real estate tax increase Does not reduce service levels Does not eliminate programs Develop excursion options that give the Board the ability to contemplate: Elimination of any proposed real estate tax increase Use of operating revenues to meet other unmet needs Use of fund balances to meet other unmet needs 5

6 Board Strategic Priorities 1. Compensation improvements (County & School) 2. Capital to improve/protect public infrastructure 3. Economic development/growth 4. Expanded broadband availability 5. Long term solution for local jail overcrowding 6. Protection of potable groundwater supply 7. Upgraded public water/sewer infrastructure 8. Enhanced public recreation/waterway access 6

7 FY 2019 Budget Highlights The FY 2019 Proposed Budget provides for: A 100% fix for the County and Schools Compensation Deficit Additional incremental funding for only the most critical and mandatory obligations Level (or reduced) funding in all other areas Cash funding of higher priority, non-bondable CIP & FMRR requests The FY 2019 Proposed Budget incorporates: A $0.015 increase to the real estate tax rate - $630K Natural revenue growth of approximately $2.6M (including GCPS) Revenue estimation shortfall corrections; Aggressive revenue forecasting Expenditure underspend corrections; Aggressive vacancy/transfer savings The FY 2019 Proposed Budget does not reduce services or eliminate programs 7

8 FY18 FY18R Adjustments $ 62.76M FY18 Budget (as originally approved) $ 151K FMRR Carryovers from FY17 $ 244K County FY18 Bonus $ 206K VATI and other one-time grants $ 892K CIP Carryovers / Accelerations $ 64.25M FY18 Budget Revised (as amended) 8

9 FY18 FY18 Run Rate $ 62.76M FY18 Budget (as originally approved) $ 151K FMRR Carryovers from FY17 (non-recurring) $ 244K County FY18 Bonus (non-recurring) $ 206K VATI and other one-time grants (non-recurring) $ 892K CIP Carryovers / Accelerations (non-recurring) $ 62.76M FY18 Run Rate (FY18R net of non-recurring s) Use of one-time funding sources to support one-time incremental expenditures and accelerations eliminates carryforward pressure on operating revenues. 9

10 Starting Point No More Hole* *Except in compensation, which has been building over time $ 207K Correcting improper grade placements $ 1.42M FY18 Gross under-compensation (current) Approximately $795K (4.85%) in equity lost during FY14 Scale Adjustments Approximately $623K (~3.8%) in missed COLA increases through FY18 $ 1.63M County Compensation Deficit (as of FY18) (Includes DSS) $ 1.41M Schools Compensation Deficit (as of FY18) FY19 ask of $2.36M minus $824K (2% FY18 FY19 COLA) minus $121K (step) $ 3.04M Total FY18 Compensation Deficit 10

11 $6.02M Additional Ask $ 3.21M Increase in transfer to schools (Incl. Schools compensation fix, FY18 FY19 2% COLA, step, HMP, etc.) $ 1.28M Increase in CIP transfer (YOY incremental net of carryovers) ($ 1.38M) Other (net) change in transfers ($1.65M Debt Svc/Utility Transfer; $300K (net) DSS compensation fix, COLA, HMP; $26K CSA) $ 704K County HMP increase (25% increase estimate from Cigna) $ 71K Civic & Fire/Rescue increase requests $ 474K Increase in FMRR (YOY incremental net of carryovers) $ 1.36M County compensation fix (Excl. DSS) $ 302K County 2% COLA (Excl. DSS; 2% figure aligned with 2018 Social Security Increase) $ 0K Other (net) personnel & operating requests $ 6.02M Net additional ask in FY19 submittals 11

12 Creates a Huge Challenge $62.76M FY18 Run Rate (FY18 Revised, net of one-time impacts) $ 6.02M Net additional ask in FY18 submittals $68.78M FY18 GF operating budget request $ 0K Total unfunded operating carryover $68.78M Total recurring revenue funding challenge 12

13 Budget Approach - Operating Start working from the FY19 request the stated need NOT from the FY18 base, and NOT from the identified gap Evaluate costs by function, unit and type Determine base needs, compare to FY16 actuals, FY17 actuals and FY18 trend, and adjust Identify and capture cost savings opportunities Enterprise fund self-support, resource sharing, cost compression Leverage vacancies in areas of greatest need Hiring frost / vacancy reallocations, position eliminations, resource reassignments, FT PT conversions Identify and capture year-end unassigned funds Vacancy savings, year-end under-transferred funds, budget over-estimates, committed fund balances Evaluate funding sources Compare to FY16 actuals, FY17 actuals and FY18 trend, identify influencing factors and adjust Leverage enhanced knowledge of specific departmental needs Second, and in some cases third or more meetings with directors / constitutional officers Exercise best judgement balance needs vs. funding 13

14 Proposed FY19 Pay Plan FY19 Request: Schools:Step increase (teachers) Scale decompression lower grades (teachers) Variable scale adjustments by grade (teachers) 4% Salary increase for all other EEs (catch-up COLA) County: Grade placement corrections (positions on wrong grade) HMP Premium corrections (dependent coverage cost) 2% COLA (aligned with 2018 Social Security increase) Market based salary adjustments (unique for each EE) FY19 Proposed: County and Schools: As Requested 14

15 Salary Increase History County: 4.85% EQUITY LOST only being brought up to new grade minimum Schools: FY10 None $400 gratuity (contract EEs ½ time +) FY11 None None FY12 None None FY13 2% 2% FY % (band & compression only) 2% FY15 3% bonus (Gr 2-8) 3% bonus (lower grade EEs) FY16 None None FY17 4% catch-up COLA 4% catch-up COLA; 2% bonus (net FY18 step increase s) FY18 2% bonus 0.355% equivalent step increase (teachers only) Note: Does not include one-off increases for select staff (County or Schools) or VRS offsets At $164K / 1%: 4.85% = $795K 3.80% = $623K Total = $1.42M From 1994 through 2009 both County and Schools saw annual increases; Between 2008 to 2018 (11 years) about 16.6% The most recent 11 year data set for Social Security indicates that it has increased 20.4% The most recent 11 year data set for the Consumer Price Index (CPI) indicates that it has increased 22.6% The most recent 11 year data set for Gloucester Median Household Income indicates that it has increased 30.1% The most recent 11 year data set for Gloucester Per Capita Personal Income indicates that it has increased 34.7% The most recent 11 year data set for Gloucester Average Wages Earned indicates that it has increased 21.2% 3.8% COLA GAP vs. Social Security 15

16 Facility Maint. Repair / Replace County Facility Maintenance Repair / Replacement FY17 Funded FY18 Funded* FY19 Request Accel to FY18 FY19 Proposal FY20 Target FY21 Target County vehicle replacements $125,000 $79,917 $80,000 $80,000 $0 $135,000 $135,000 HVAC unit replacements $10,000 $0 $63,000 $63,000 $0 $30,000 $30,000 Senior Center Repairs (Windows, Paving, etc.) $0 $0 $36,000 --> Shift to Older Adult Committed Capital Jail Kitchen Grease Trap Replacement $0 $0 $2,650 $0 $2,650 $0 $0 Power Washing Courthouse $0 $0 $4,600 $4,600 $0 $0 $0 Boiler Replacement at Colonial Courthouse $40,000 $0 $0 $0 $0 $0 $0 Parking Lot Paving at DIT $0 $0 $0 $0 $0 $35,000 $0 Computer Replacement Schedule (20%/year) $59,180 $63,200 $62,793 $0 $62,793 $63,200 $63,200 Network Security Appliance Upgrade / Replacement $0 $0 $10,000 $10,000 $0 $0 $0 Time Clock End of Life Replacement $0 $0 $30,000 $30,000 $0 $0 $0 IT Office / Old Library Interior Renovation $0 $0 $39,000 $0 $39,000 $0 $0 GIS - GPS Replacement and Trimble Software Upgrade $0 $0 $10,500 $10,500 $0 $0 $0 Security Card Access for County Offices $0 $12,500 $0 $0 $0 $12,500 $12,500 Parks and Recreation - Various $40,520 $40,520 $40,520 $0 $40,520 $40,520 $40,520 Copier Replacement (Bldg 1 HV) (Color Copier) $0 $0 $0 $0 $0 $13,500 $0 Sheriff - Body Cameras $55,000 $0 $0 $0 $0 $0 $0 Sheriff - Equipment/Technology replacements $35,000 $35,800 $35,000 $0 $35,000 $35,000 $35,000 Sheriff - Vehicle replacement $266,300 $131,300 $266,300 $116,900 $149,400 $266,300 $266,300 Colonial Courthouse / Court Circle Exterior Maint. $0 --> Shift to Tourism Committed Funding $0 $0 $0 Animal Control - Flooring, Security Cams, Carport $0 $0 $15,700 $0 $15,700 $0 $0 Energy Efficiency Study - County Buildings $30,000 $0 $0 $0 $0 $0 $50,000 Total FMRR $661,000 $363,237 $696,063 $315,000 $345,063 $631,020 $632,520 *$226K of FY18 FMRR request was accelerated into FY17, with some carryover into FY18 CA Proposes to accelerate $315K of FY19 FMRR request into FY18 using ½ year impact of proposed RE Rate Alternate Source: $254K in available FMRR Committed Fund Balance + other opportunistic committed fund rebalancing 16

17 General Fund Operating (Excluding Transfers) $ 31.94M FY19 GF operating request ($ 73K) Personnel expense (no service level reductions) Animal Control Officer (1/1 FTE - $54K); General District Court Supplements ($19K) ($ 40K) Level fund / no new civic contributions Gloucester Housing Partnership ($14K); Gloucester Free Clinic ($10K); Tidewater Soil & Water Conservation District ($4K); Puller Center ($2K); Arts on Main ($5K); Southeast Rural Community Assistance Program ($5K) ($ 32K) Fund bare need Fire/Rescue escalation deferral GVFRS requested level funding; AVFR request bundle $32K into FY20 ($ 57K) HMP increase 25% 23% (incl. HMP rate fix) ($ 315K) FMRR Acceleration into FY18 ($ 142K) Move from operating to committed Capital funding $106K funded via Tourism committed; $36K via Older Adult Fund committed ($ 98K) Other individual line item puts / takes (net) $ 31.18M FY19 GF operating budget funded 17

18 General Fund FY17 Final FY17 Actual FY18 Revised FY18 Expected FY19 Proposed FY18R --> FY19 s General Fund (10) Total $ 62,166,080 $ 60,218,967 $ 64,257,825 $ 64,254,188 $ 66,668,555 $ 2,410, % School Operating Fund $ 23,778,058 $ 23,578,285 $ 24,379,022 $ 24,379,022 $ 26,238,630 $ 1,859, % Social Services $ 1,111,624 $ 926,195 $ 1,327,183 $ 1,327,183 $ 1,627,336 $ 300, % Children's Services Act Fund $ 491,000 $ 343,694 $ 639,000 $ 639,000 $ 613,000 $ (26,000) -4.1% Capital Fund $ 1,688,077 $ 1,396,170 $ 2,363,087 $ 2,363,087 $ 2,750,491 $ 387, % Debt Service Fund $ 5,715,751 $ 5,703,436 $ 5,476,107 $ 5,476,107 $ 4,254,734 $ (1,221,373)-22.3% Utilities Fund $ 575,526 $ 575,526 $ 430,524 $ 430,524 $ - $ (430,524) % General Fund Total w/o Transfers $ 28,806,044 $ 27,695,660 $ 29,642,902 $ 29,639,265 $ 31,184,364 $ 1,541, % $31.18M FY19 General Fund operating budget funded $2.83M increase from FY18R, $1.29M in offsets, including $220K increase in vacancy / transfer savings estimate, $112K prior year unexpended HMP funds, $357K non-recurring, $100K VRS reduction, $214K reduction associated with personnel / position changes / eliminations; $33K Jail operating cost reductions, and others Major priorities funded: $647K HMP increase (including dependent coverage cost fix); $146K grade placement corrections; $302K 2% COLA adjustment; $1.21M County compensation deficit; $85K Commonwealth Attorney FTE; $165K ACA FTE 18

19 Schools Transfer Request $24.38M FY19 starting point (level from FY18) $ 2.36M Compensation adjustments $ 1.12M HMP increase $ 923K Personnel additions $ 60K Two additional days added to school year $ 220K FMRR ($ 813K) New State and Federal revenue ($ 500K) Internal Savings (attrition, line items, etc.) ($ 154K) Employee HMP premium increase $27.59M FY19 local transfer request (up $3.21M) Note: Figures taken from the School Superintendent s proposed budget presentation to the School Board 19

20 Proposed Schools GF Transfer $24.38M FY18 current appropriation $ 1.86M Toward FY19 compensation fix $26.24M FY19 transfer funded Compensation Solution (suggested) FY19 Compensation fix: $ 2.36M New Local funding ($ 1.86M) Internal savings (attrition, line items, etc.) ($ 500K) Balance Compensation (or other) Go-Get $ 0K HMP Increase Solution (suggested) FY19 HMP increase: $ 1.12M New State & Federal funding ($ 813K) Proposed EE HMP Premium ($ 154K) Balance HMP (or other) Go-Get $ 153K Unresolved: Additional days Additional positions FMRR Note: Figures taken from the School Superintendent s proposed budget presentation to the School Board 20

21 Schools Operating / Debt Service School Operating Fund FY17 Final FY17 Actual FY18 Revised FY18 Expected FY19 Proposed FY18R --> FY19 s Local $145,697 $105,527 $168,097 $168,097 $117,500 ($50,597) -30.1% Local Transfer $23,778,058 $23,578,285 $24,379,022 $24,379,022 $26,238,630 $1,859, % Commonwealth $29,149,334 $29,290,798 $29,681,657 $29,681,657 $30,478,405 $796, % Federal $2,825,334 $2,736,710 $2,914,911 $2,914,911 $2,931,122 $16, % Total Revenue $55,898,423 $55,711,320 $57,143,687 $57,143,687 $59,765,657 $2,621, % Debt Service from County GF $3,412,382 $3,401,518 $3,283,993 $3,283,993 $3,511,318 $227,325 7% Total County GF for Schools $27,190,440 $26,979,803 $27,663,015 $27,663,015 $29,749,948 $2,086,933 8% $26.24M FY19 General Fund transfer funded Includes $1.86M increase in Local Transfer toward FY19 Compensation fix Relies on Division level savings (attrition, line items, etc.) to complete compensation Assumes ability to negotiate Cigna down $153K to address HMP increase gap Does not fund $923K in additional instructional positions Does not fund $220K in FMRR Does not fund $60K in additional instructional days Note: Figures taken from the School Superintendent s proposed budget presentation to the School Board correction 21

22 Education Funds $26.24M FY19 General Fund transfer funded Includes $1.86M toward FY19 Compensation fix Relies on Division level savings (attrition, line items, etc.) to complete compensation Assumes ability to negotiate Cigna down $153K to address HMP increase gap Does not fund $923K in additional instructional positions Does not fund $220K in FMRR Does not fund $60K in additional instructional days Note: Figures taken from the School Superintendent s proposed budget presentation to the School Board 22

23 Social Services Funds Social Services FY17 Final FY17 Actual FY18 Revised FY18 Expected FY19 Proposed FY18R --> FY19 s Local $0 $4,777 $0 $0 $0 $0 0.0% Local Transfer $1,111,624 $926,195 $1,327,183 $1,327,183 $1,627,336 $300, % Commonwealth $1,433,401 $1,231,479 $1,411,912 $1,411,912 $1,477,544 $65, % Federal $1,470,197 $1,650,711 $1,517,776 $1,517,776 $1,802,733 $284, % Total Revenue $4,015,222 $3,813,163 $4,256,871 $4,256,871 $4,907,613 $650, % Children's Services Act Fund FY17 Final FY17 Actual FY18 Revised FY18 Expected FY19 Proposed FY18R --> FY19 s Local $3,720 $15,212 $3,720 $3,720 $3,720 $0 0.0% Local Transfer $491,000 $343,694 $639,000 $639,000 $613,000 ($26,000) -4.1% Commonwealth $843,280 $497,234 $825,280 $825,280 $789,280 ($36,000) -4.4% Federal $18,000 $34,836 $18,000 $18,000 $18,000 $0 0.0% Total Revenue $1,356,000 $890,976 $1,486,000 $1,486,000 $1,424,000 ($62,000) -4.2% $ 2.24M FY19 General Fund transfer funded Includes splits / offsets to accommodate proposed HMP increase/fix, grade placement corrections, 2% COLA, and DSS compensation deficit ~30% of HMP and compensation matters funded with Federal dollars 23

24 Capital Funds Capital Fund FY17 Final FY17 Actual FY18 Revised FY18 Expected FY19 Proposed FY18R --> FY19 s Local $140,000 $66,117 $0 $0 $100,000 $100, % Local Transfer $1,688,077 $1,396,170 $2,363,087 $2,363,087 $2,750,491 $387, % Commonwealth $801,427 $296,553 $1,031,865 $1,031,865 $150,000 ($881,865) -85.5% Federal $1,604,482 $935,695 $717,616 $717,616 $100,000 ($617,616) -86.1% Loan Proceeds $0 $1,020,726 $1,597,000 $1,597,000 $0 ($1,597,000) % Committed FB $0 $0 $0 $0 $36,000 $36, % Total Revenue $4,233,986 $3,715,260 $5,709,568 $5,709,568 $3,136,491 ($2,573,077) -45.1% $ 2.75M FY19 General Fund transfer funded $2.56M in unassigned fund balance from FY17 year-end operating results $106K from Tourism Committed Fund $88K from Cable Committed Fund Other funding sources include: $100K (donations); $150K (E911 grant); $100K (EPA grant); $36K (Older Adult Committed Fund) School busses prime for acceleration w/ 90-day EPA grant window (consider using Subsequent Expenditures Committed Capital Fund balance: $544K) Anticipate potential for FY18 FY19 carryover of $1.6M (BAN/VPSA) 24

25 Debt Service Fund Debt Service Fund FY17 Final FY17 Actual FY18 Revised FY18 Expected FY19 Proposed FY18R --> FY19 s Local $0 $0 $0 $0 $0 $0 0.0% Local Transfer $5,715,751 $5,703,436 $5,476,107 $5,476,107 $4,254,734 ($1,221,373) -22.3% Federal $233,268 $234,275 $233,268 $233,268 $235,030 $1, % Loan Proceeds $0 $0 $0 $0 $0 $0 0.0% Total Revenue $5,949,019 $5,937,711 $5,709,375 $5,709,375 $4,489,764 ($1,219,611) -21.4% $ 4.25M FY19 General Fund transfer funded Reduced by $1.22M due retirement of, and final payment on, the Communications Equipment Capital Lease (PS Radio system) Other funding sourced through Federal reimbursements of $235,030 for Series 2011 School Bond Interest Includes total School debt payments of $3.51M (net) correction 25

26 Enterprise Funds No proposed increase in district or water / sewer rates Utilities Fund FY17 Final FY17 Actual FY18 Revised FY18 Expected FY19 Proposed FY18R --> FY19 s Revenue Charges for Services $4,300,000 $4,407,768 $4,399,200 $4,399,200 $4,551,200 $152, % Local Transfer $575,526 $575,526 $430,524 $430,524 $0 ($430,524) % Development/Connection Fees $340,000 $622,320 $375,000 $375,000 $398,500 $23, % Loan Proceeds/DSRF $1,979,000 $0 $0 $0 $1,866,455 $1,866, % Use of Fund Balance/Other $125,000 $33,080 $550,000 $550,000 $0 ($550,000) % Total Revenue $7,319,526 $5,638,694 $5,754,724 $5,754,724 $6,816,155 $1,061, % Expenditure Personnel (includes PT WAR) $1,473,965 $1,251,988 $1,515,057 $1,515,057 $2,009,280 $494, % Operating $1,053,026 $1,982,286 $972,900 $972,900 $1,487,617 $514, % Capital $2,104,000 $123,860 $575,000 $575,000 $589,000 $14, % Debt Service $2,688,535 $273,251 $2,691,767 $2,691,767 $2,730,258 $38, % Total Expenditure $7,319,526 $3,631,384 $5,754,724 $5,754,724 $6,816,155 $1,061, % $ 0K FY19 General Fund transfer funded Reduced by $431K to reflect complete migration to self-sustainment Loan Proceeds (Debt Service Reserve Fund) supports final VRA Series 2012 Bond pmt Grade placement corrections & Utilities compensation deficit fix effective 12/1/17 Includes proposed 2% COLA and HMP increase/fix 26

27 General Fund Summary $68.78M FY19 General Fund operating budget (request) ($ 760K) GF incremental operating requests unfunded ($315K of which is proposed as FMRR acceleration into FY18) ($ 1.35M) GF transfer increase unfunded GCPS $66.67M FY19 GF operating budget (proposed) $66.67M FY19 GF operating budget (proposed) $62.76M FY18 GF Budget as adopted $ 3.91M Incremental Additional Funding FY18 FY19 27

28 Incremental Funding Summary $ 2.14M FY19 General Fund operating budget $2.83M increase from FY18R, $1.29M in offsets, including $220K increase in vacancy / transfer savings estimate, $112K prior year unexpended HMP funds, $357K nonrecurring, $100K VRS reduction, $214K reduction associated with personnel / position changes / eliminations; $33K Jail operating cost reductions, and others Major priorities funded: $647K HMP increase (including dependent coverage cost fix); $146K grade placement corrections; $302K 2% COLA adjustment; $1.21M County compensation deficit; $85K Commonwealth Attorney FTE; $165K ACA FTE $ 1.86M General Fund transfer GCPS $ 274K General Fund transfer Social Services/CSA $ 1.28M General Fund transfer Capital Fund ($ 1.22M) General Fund transfer Debt Service ($ 431K) General Fund transfer Utilities / Enterprise $ 3.91M Incremental Additional Funding FY18 FY19 $ 0K Total unbudgeted operating carryover (Hole) $ 3.91M Increased revenue pressure over FY18 Adopted 28

29 FY19 Revenue Outlook Summary General Fund Revenues FY2017 Final Budget FY2017 Actual FY2018 Revised Budget FY2018 Expected FY2019 Proposed Dollar Change % Change General Property Taxes $38,608,583 $39,509,178 $39,285,348 $39,285,348 $40,774,011 $1,488, % Other Local Taxes $9,782,461 $10,168,207 $10,174,980 $10,270,980 $10,641,280 $466, % Licenses, Permits, & Fees $369,363 $591,346 $395,680 $395,680 $431,580 $35, % Fines & Forfeitures $70,700 $85,667 $85,150 $85,150 $100,200 $15, % Use of Money & Property $148,400 $201,771 $145,750 $145,750 $283,450 $137, % Charges for Services $933,440 $1,048,851 $1,043,675 $1,043,675 $1,089,642 $45, % Miscellaneous $279,661 $347,566 $128,930 $128,930 $213,121 $84, % Recovered Costs $367,500 $413,302 $371,200 $371,200 $455,950 $84, % Commonwealth $8,954,202 $8,797,407 $9,077,991 $9,077,991 $8,890,298 ($187,693) -2.1% Federal $227,933 $278,824 $273,838 $264,708 $311,201 $37, % Total General Fund Revenues $59,742,243 $61,442,118 $60,982,542 $61,069,412 $63,190,733 $2,208, % ($63.19M) FY19 Projected GF revenue (no rate impact) 29

30 FY19 Revenue Outlook Detail About 50/50 Growth and Enhanced Accuracy of Projection Property Taxes FY2017 Final FY2017 FY2018 FY2018 FY2019 Dollar % Budget Actual Revised Budget Expected Proposed Change Change CURRENT REAL ESTATE $27,593,583 $28,422,692 $28,155,348 $28,155,348 $29,272,011 $1,116, % DELINQUENT REAL ESTATE $800,000 $659,432 $700,000 $700,000 $700,000 $0 0.0% PUBLIC SERVICE CORP $825,000 $984,322 $1,000,000 $1,000,000 $1,100,000 $100, % CURRENT PERS PROP $8,000,000 $8,116,343 $8,100,000 $8,100,000 $8,262,000 $162, % DELINQUENT PERS PROP $800,000 $759,107 $750,000 $750,000 $800,000 $50, % MANUFACTURED HOME $50,000 $48,973 $40,000 $40,000 $50,000 $10, % PENALTIES $350,000 $342,898 $350,000 $350,000 $400,000 $50, % INTEREST $190,000 $175,411 $190,000 $190,000 $190,000 $0 0.0% Total $38,608,583 $39,509,178 $39,285,348 $39,285,348 $40,774,011 $1,488, % Other Local Taxes FY2017 Final FY2017 FY2018 FY2018 FY2019 Dollar % Budget Actual Revised Budget Expected Proposed Change Change LOCAL SALES TAX $4,287,209 $4,363,168 $4,404,000 $4,500,000 $4,617,000 $213, % CONSUMER UTILITY TAX $711,000 $725,381 $720,000 $720,000 $750,000 $30, % BUSINESS LICENSE TAX $1,889,000 $1,682,846 $1,692,614 $1,692,614 $1,800,000 $107, % MEALS TAX $1,900,000 $2,194,699 $2,280,000 $2,280,000 $2,339,280 $59, % LODGING TAX $179,252 $209,149 $208,366 $208,366 $200,000 ($8,366) -4.0% OTHER LOCAL TAXES $816,000 $992,964 $870,000 $870,000 $935,000 $65, % Total $9,782,461 $10,168,207 $10,174,980 $10,270,980 $10,641,280 $466, % 30

31 Proposed use of Fund Balances End of FY 18 / beginning of FY19 Unencumbered, Unassigned Fund Balance Estimate: $17.6M (excl. FY18 YE results) Fund Balance Policy (14-16%) target: $14.4M - $16.5M Unassigned Fund Balance available for use: $1.1M - $3.2M ($2.15M midpoint) CA proposed funding for FY19 PayGo CIP: $ 2.56M Unassigned Fund Balance (UFB) $ 88K Cable Services Committed Fund Balance $ 106K Tourism Committed Fund Balance $ 2.75M Total GF Balance supporting FY19 PayGo CIP 31

32 Proposed use of Fund Balances $ 2.75M Total GF Balance supporting FY19 PayGo CIP $ 78K Asset Forfeiture (net neutral w/ offsetting Expenditure) $ 20K UFB support for RCC capital (level funded past 2 years) $ 2.85M Total (General) Fund Balance supporting FY19 proposed budget $ 36K Dedicated (Older Adult Committed) Capital Fund $ 2.89M Total (All) Fund Balance supporting FY19 proposed budget 32

33 Funding the Proposed Budget $66.67M FY19 GF operating budget (proposed) ($63.19M) FY19 Projected revenue (w/o tax impact; no use of FB) $ 3.48M Proposed budget/revenue GAP $ 630K Proposed $0.015 RE rate increase $ 2.85M Proposed use of GF balances for one-time expenses $ 3.48M Total proposed rate change and use of fund balances $0.015 RE rate increase = $27.67 / year on average annual RE tax bill at an assessed value of ~$184,487 $0.015 RE rate increase = $23.55 / year on median annual RE tax bill at an assessed value of ~$156,970 33

34 Projected Revenues by Source 34

35 FY 2019 Proposed Budget Category Expenditure Summary FY2017 Final Budget FY2017 Actual FY2018 Revised Budget FY2018 Expected FY2019 Proposed FY18R --> FY19 s General Fund $28,806,044 $27,695,660 $29,642,902 $29,639,265 $31,184,364 1,541, % School Operating $55,898,423 $55,711,320 $57,143,687 $57,143,687 $59,765,657 2,621, % School Cafeteria $2,664,689 $2,305,217 $2,723,616 $2,723,616 $2,613,473 (110,143) -4.0% School Special Education $665,553 $631,990 $691,676 $691,676 $732,697 41, % Social Services $4,015,222 $3,813,163 $4,256,871 $4,256,871 $4,907, , % Children's Services Act $1,356,000 $890,976 $1,486,000 $1,486,000 $1,424,000 (62,000) -4.2% Capital Fund $4,233,986 $3,689,636 $5,709,568 $5,709,568 $3,136,491 (2,573,077) -45.1% Debt Service Fund $5,949,019 $5,937,711 $5,709,375 $5,709,375 $4,489,764 (1,219,611) -21.4% Gloucester Sanitary Districts #1 $30,000 $20,259 $27,000 $27,000 $25,000 (2,000) -7.4% Gloucester Point Sanitary $20,130 $17,723 $19,950 $19,950 $19,860 (90) -0.5% Utility Fund $7,319,526 $3,631,384 $5,754,724 $5,754,724 $6,816,155 1,061, % Mosquito Control $111,971 $85,623 $126,103 $126,103 $127,535 1, % Total Expenditure for the County $111,070,563 $104,430,663 $113,291,472 $113,287,835 $115,242,609 $1,951, % Budget balanced with a $0.015 Real Estate rate increase, aggressive use of fund balances, enhanced RE revenue projection accuracy, aggressive revenue growth assumptions 35

36 Priorities Funded 36

37 Excursion Unfunded Priorities $ 32K Fire/Rescue funding full (or partial) request AVFR request $1.1M, level funded at $1.07M w/intent to supplement in FY20 $ 77K Revert Contingency to FY17 level (to address revenue risk) $ 73K County personnel (new) Animal Control Officer (1 FTE - $54K); General District Court Supplements ($19K) $ 923K+ * GCPS personnel (new) Outsourced Substitute Services ($160K); GHS Regular Education Teacher (1 FTE - $65K); Gifted Teacher (1 FTE - $65K); K- 12 Behavioral Specialist (1 FTE - $65K); Add l VA Preschool Classroom ($98K); Additional School Resource Officers (5 FTE $313K PLUS COUNTY CONTRIBUTION AND FIT-UP, TBD); 6-12 Reading Specialist (1 FTE - $95K); Special Education * Paraprofessionals (2 FTE $62K) $ 60K GCPS two additional instructional days (new) $ 140K GCPS FMRR (excluding security upgrades) Fleet ($65K); Kitchen Ceiling at Peasley ($25K); Exterior Soffit / Fascia Repairs at TCWEC ($30K); Leaf and Debris Vac ($10K); Paint Shaker ($10K); Snowplow ($7K) $ 400K GCPS security upgrades (consider funding with UFB) CA suggests considering physical security improvements in advance of adding SROs If Subsequent Expenditures Committed Capital Fund dollars are used for School Bus acceleration (to meet EPA grant 90-day timeline), UFB $ would be freed up to support this recommendation $ 40K Civic Organization funding increases Gloucester Housing Partnership ($14K); Gloucester Free Clinic ($10K); Tidewater Soil & Water Conservation District ($4K); Puller Center ($2K); Arts on Main ($5K); Southeast Rural Community Assistance Program ($5K) 37

38 Excursion Target Ø tax impact $ 630K Proposed budget/revenue GAP ($ 288K) Short Compensation fix by 0.5% across the board (County - $82K; Schools - $206K) (Will be positioned as a Hole going into FY20, and added to FY20 COLA request) ($ 181K) Arbitrary deferral of FMRR ($315K acceleration already proposed) (Could create a Hole going into FY20, or otherwise re-level over future years) ($ 73K) 25% Reduction in Civic Contributions ($ 88K) Cancel Refitting of GHS TV Studio (3 rd Year Push) $ 0 RE tax rate changes required Also: Option for reinstatement of the Boat Tax (~$400K) 38

39 Excursion Target Ø tax impact $ 630K Proposed budget/revenue GAP ($ 576K) Short Compensation fix by 1% across the board (County - $164K; Schools - $412K) (Will be positioned as a Hole going into FY20, and added to FY20 COLA request) ($ 54K) Other (Go Get) (Split between County & Schools) $ 0 RE tax rate changes required -- OR ($ TBD) Major service reduction / program elimination (Up to $630K) 39

40 Questions? 40

41 CIP Objectives / Approach Identify needs for capital improvement Document needs Assess alignment with BOS Strategy / Comp Plan Prioritize needs Evaluate funding options Balance needs with available funding Evaluate, modify (if needed) & adopt a plan of action Appropriate funding Execute projects that meet the stated needs 41

42 FY19 CIP Summary (Excl. Utilities) Project Title Year One FY2019 Funding 911 Call Handling Equipment (CHE) (name change) 440,000 Paygo/Grant Accessibility Improvements-Project Completion 83,000 Paygo Social Services Building Expansion 1,000,000 Paygo ADA Accessibility Improvements 173,000 Paygo HVAC Replacement at Peasley & Bethel 215,000 Paygo School Bus Replacement Program (5 per year) 478,950 Paygo* Lighting Replacement in All Schools except GHS and Page 266,417 Paygo Cable Communications Program 88,124 Paygo/ Committed Playground-Woodville Park 250,000 Paygo/Grant Total FY 2019 Non-Enterprise CIP (Excluding Prior Year Carryforwards) 2,994,491 * CA Recommends consideration of accelerating $478,950K of FY19 CIP request into FY18 using Subsequent Expenditures Committed Capital Fund (available balance $544K) in order to address 90-day EPA Grant timing requirement and unencumber Unassigned Fund Balance that could be used to support Acceleration of GCPS FY19 FY23 Security related FMRR into FY19 42

43 FY19 CIP Summary $ 2.99M FY19 Non-enterprise CIP, w/o carryforwards $ 106K CA Transfers from FMRR (Tourism Committed) $ 36K CA Transfers from FMRR (Older Adult Committed) $ TBD FY18 FY19 carryforwards $ 3.14M Total Proposed FY19 CIP (Capital Fund) $ 510K Proposed FY19 Enterprise CIP (Utilities) Project Title Year One FY2019 Funding Rehab/Repair PS #11 (Courthouse North) Phase II 200,000 Paygo Replace Anthracite Filter Media at WTP (New!) 50,000 Paygo Radio-Read Meter Conversion Ph 1 & 2 (New!) 100,000 Paygo Water Treatment Plant Roof Replacement 75,000 Paygo Water Treatment Plant Façade Repairs 85,000 Paygo Total FY 2019 Non-Enterprise CIP (Excluding Prior Year Carryforwards) 510,000 43

44 Proposed use of Fund Balances End of FY 18 / beginning of FY19 Unencumbered, Unassigned Fund Balance Estimate: $17.6M (excl. FY18 YE results) Fund Balance Policy (14-16%) target: $14.4M - $16.5M Unassigned Fund Balance available for use: $1.1M - $3.2M ($2.15M midpoint) CA proposed funding for FY19 PayGo CIP: $ 2.56M Unassigned Fund Balance (UFB) $ 88K Cable Services Committed Fund Balance $ 106K Tourism Committed Fund Balance $ 2.75M Total GF Balance supporting FY19 PayGo CIP 44

45 FY19 CIP Funding Proposal $ 3.14M Total Proposed FY19 CIP (Capital Fund) ($ 2.75M) Total GF Balance supporting FY19 PayGo CIP ($ 36K) Total CF Balance supporting FY19 PayGo CIP (Older Adult Committed Capital Fund) ($ 150K) State Grant (E911 Call Handling Equipment) ($ 100K) EPA Federal Grant (School Busses) ($ 100K) Donations (Woodville Playground) $ 0K Remaining unfunded Note: Transportation Facility and GHS design work funded in FY18 projected to carryover, likely to be funded via BAN 45

46 Pay-Go / Cash Project Plan Department Project Title CA Quartile Schools 1-9 Dept Dir Wtd CIP Team Wtd Plan Com Wtd Average Ranking (/10) Ranking (/10) Ranking (/10) Ranking (/10) Ranking Radio O&M 911 Call Handling Equipment (CHE) (name change) Top N/A PR&T Accessibility Improvements-Project Completion Top N/A DSS Social Services Building Expansion Top N/A Engineering ADA Accessibility Improvements Top N/A Schools HVAC Replacement at Peasley & Bethel Top Schools School Bus Replacement Program (5 per year) Top Schools Roof Coating at Achilles and Botetourt Top Schools Lighting Replacement in All Schools except GHS and Page Upper-Mid PR&T Restrooms and Concessions-Woodville Park (New!) Upper-Mid N/A Schools Playground Equipment Replacement at Botetourt and Achilles Upper-Mid PR&T Road Improvement-Ark Park Upper-Mid N/A Comm Eng Cable Communications Program Upper-Mid N/A Schools Bus Compound General Repairs Upper-Mid PR&T Playground-Woodville Park Upper-Mid N/A DIT ERP Software (Replace Fin Plus, Community Plus, etc) Upper-Mid N/A PR&T Athletic Field Lighting (Woodville & Abingdon) Upper-Mid N/A PR&T Irrigation System - Woodville Park Upper-Mid N/A Engineering Asphalt Paving & Overlay-Justice Dr & Law Enforcement Parking Lot Upper-Mid N/A PR&T Paving & Striping of Parking Lots-Various (New!- Combining of previous submissions) Lower-Mid N/A PR&T Support Facilities & Equipment-Woodville (New!) Lower-Mid N/A Engineering Asphalt Paving & Overlay-2002 Courthouse Pking Lot Lower-Mid N/A

47 Pay-Go / Cash Project Plan FY20 & FY21 expected to be difficult PayGo years Department Project Title Total Cost Year One Year Two Year Three Year Four Year Five FY2019 FY2020 FY2021 FY2022 FY2023 Radio O&M 911 Call Handling Equipment (CHE) (name change) 440, ,000 PR&T Accessibility Improvements-Project Completion 83,000 83,000 DSS Social Services Building Expansion 1,000,000 1,000,000 Engineering ADA Accessibility Improvements 173, ,000 Schools HVAC Replacement at Peasley & Bethel 1,714, , , , ,000 Schools School Bus Replacement Program (5 per year) 2,542, , , , , ,063 Schools Roof Coating at Achilles and Botetourt 734, ,000 Year Six and Beyond Schools Lighting Replacement in All Schools except GHS and Page 1,386, , , , ,276 PR&T Restrooms and Concessions-Woodville Park (New!) 622, ,000 Schools Playground Equipment Replacement at Botetourt and Achilles 737, , , , ,670 PR&T Road Improvement-Ark Park 127, ,000 Comm Eng Cable Communications Program 288,124 88, , ,000 Schools Bus Compound General Repairs 162, ,506 0 PR&T Playground-Woodville Park 250, ,000 DIT ERP Software (Replace Fin Plus, Community Plus, etc) 644, ,000 PR&T Athletic Field Lighting (Woodville & Abingdon) 1,128, , , ,000 PR&T Irrigation System - Woodville Park 82,173 82,173 Engineering Asphalt Paving & Overlay-Justice Dr & Law Enforcement Parking Lot 112, ,000 PR&T Paving & Striping of Parking Lots-Various (New!- Combining of previous submissions) 1,433, , , , , ,000 PR&T Support Facilities & Equipment-Woodville (New!) 318, ,000 0 Engineering Asphalt Paving & Overlay-2002 Courthouse Pking Lot 146, ,000 47

48 Bond / Financed Project Plan Department Project Title CA Quartile Schools 1-9 Dept Dir Wtd CIP Team Wtd Plan Com Wtd Average Ranking (/10) Ranking (/10) Ranking (/10) Ranking Ranking Radio O&M Public Safety Radio Subscriber Upgrades Top N/A Schools Gloucester High School Major Repairs (HVAC, Roof Repairs, & Others) Top Schools Bus Compound Relocation Upper-Mid Schools Baseball Field - Page (New!) Upper-Mid Schools Storage Facility-Division Wide (New!) Upper-Mid Schools New Achilles Bus Loop Lower-Mid PR&T Support Facilities & Equipment-Woodville (New!) Lower-Mid N/A Department Project Title Total Cost Year One Year Two Year Three Year Four Year Five Year Six and FY2019 FY2020 FY2021 FY2022 FY2023 Beyond Radio O&M Public Safety Radio Subscriber Upgrades 3,090,000 3,090,000 Schools Gloucester High School Major Repairs (HVAC, Roof 9,897,570 9,897,570 Repairs, & Others) Placeholder Schools Bus Compound Relocation 6,000,000 6,000,000 Schools Baseball Field - Page (New!) 300, ,000 Proposed Schools Storage Facility-Division Wide (New!) 0 0 Borrowing Schools New Achilles Bus Loop 800, ,000 (VPSA) PR&T Support Facilities & Equipment-Woodville (New!) 4,118, ,118,000 0 Total Financed 24,205, ,997, ,090,000 4,118,000 Initial Financing Capacity 0 16,997, ,281,635 2,191,635 Remaining Financing Capacity ,191,635 (1,926,365) 48

49 Projected Debt Capacity $1.22M Debt Service Cliff As part of the FY2017 Budget and CIP adoption, the Board chose to retain the FY19 cliff Simultaneous $430K reduction in General Fund supported Enterprise debt service $1.65M Total debt service reduction = $23M total project capacity at current debt service funding levels About $71K per million financed, assuming 25 year term at 5% (Planning Interest Rate) No operating reserve to fund future PayGo, debt service, RE Tax, and/or other operating needs $17M proposed borrowing would consume $1.21M of the $1.65M total debt service reduction About $440K operating reserve to fund future PayGo, debt service, RE Tax, and/or other operating needs CA recommends $17M proposed borrowing be funded via then current (FY21) natural revenue growth, and/or up to an estimated $0.03 increase to the (FY21) RE Tax rate Full $1.65M operating reserved to fund FY19 County and Schools Compensation Deficit 49

50 Utilities Enterprise Funded Deprioritized considering other opportunities to address the need Department Project Title Total Cost Year One Year Two Year Three Year Four Year Five FY2019 FY2020 FY2021 FY2022 FY2023 Utilities Replace Reverse Osmosis Membranes Ph2 100, ,000 Utilities Rehab/Repair PS #11 (Courthouse North) Phase II 1,100, , , , , ,000 Year Six and Beyond Utilities Rehab/Repair PS #13 (Courthouse South) Phase II (NEW!) 850, , , , ,000 Utilities Rebuild PS #11 (Courthouse North) 700, , ,000 Utilities Rebuild PS #12 Summerville 600, ,000 Utilities Rebuild PS #13 (Courthouse South) 1,200,000 1,200,000 Utilities Replace Anthracite Filter Media at WTP (New!) 50,000 50,000 Utilities Kerns Avenue Utility Improvements (New!) 140,000 55,000 85,000 Utilities Demolish Radial Well Facility (New!) 65,000 65,000 Utilities Radio-Read Meter Conversion Ph 1 & 2 (New!) 200, , ,000 Utilities Water Treatment Plant Roof Replacement 75,000 75,000 Utilities Water Treatment Plant Façade Repairs 85,000 85,000 Utilities Utility Yard 1,500,000 1,500,000 FY19 and beyond funded via FY19 cliff impact (reduction of debt service) which generates a net positive cash impact of approximately $1.2M per year Funding mechanisms to be further evaluated in FY19 to support future CIP spend Modifications likely pursuant to outcome of pending Master Plan study 50

51 CIP Questions? 51

52 Proposed Tax Rate Advertising CY 2017 Suggested Advertising (CY 2018) Real Estate $0.695 $0.72 Manufactured Homes $0.695 $0.72 Public Service Corporation $0.695 $0.72 Tangible Personal Property $2.95 $2.95 Boats $ $1.00 Gloucester Sanitary District #1 $0.01 $0.01 Gloucester Point Sanitary District $0.01 $0.01 Mosquito Control $0.01 $

53 Budget Calendar March 13 March 20 March 21 March 28 April 3 April 4 April 10 April 12 April 16 April 17 addition addition Budget Work Session Joint Work Session w/school Board* (7PM) Chair / Vice Chair Budget Town Hall (7PM) FY19 Budget & Tax Rate Public Hearings* Regular Meeting Possible Budget Work Session (new) Possible Budget Work Session Possible Budget Work Session FY2019 Budget Adoption addition Regular Work Session Note: *At Thomas Calhoun Walker Education Center Note: All meetings at 6PM unless otherwise noted 53

54 54