FY2016 Budget Presentation Richard M. Riebeling Finance Director - - PowerPoint PPT Presentation

FY2016 Budget Presentation

Richard M. Riebeling

Finance Director April 30, 2015 Metropolitan Government of Nashville and Davidson County Mayor Karl Dean

Mayor Dean’s Priorities

N IGHBORHOODS NEW AMERIC NS PUBLIC AFETY EALTH OLUNTEERISM EDUCATIO ECONOMIC DEVE OPMENT SUSTAINABI ITY TRANS T

N A S H V I L L E

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FY2015 – Current Year Status

• Departments are operating within budget
• Rebuilt reserves
• Small growth in property tax base
• Significant sales tax growth
• Maintained strong bond rating

3

FY2016 Budget Instructions

• Continued need to reduce expenditures ‐ 3% scenario
• Very Limited opportunity for funding improvements

4

Fy2016 Recommended Budget

$ 1,968,285,900 4.05% increase over FY2015

5

The Budget A Historical Perspective

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1.00 1.10 1.20 1.30 1.40 1.50 1.60 1.70 1.80 1.90 2.00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

1.11 1.23 1.31 1.35 1.35 1.44 1.51 1.56 1.57 1.54 1.52 1.59 1.71 1.8 1 1.8 9 1.97

FY01 to FY08 = 40.4% growth FY09 to FY16 = 25.4% growth

Amounts taken from Substitute Budget Ordinances as approved by Metro Council

Total Budget Growth

Amounts in billions

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Schools Budget Growth

350 450 550 650 750 850 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

40 4.5 4 4 3.1 4 77.6 50 2.9 510 .5 542.3 563.2 591.5 620 .8 620 .8 633.3 674 .0 720 .4 74 6.4 790 .1 8 10 .0

FY01 to FY08 = 46.2% growth FY09 to FY16 = 30.5% growth

Amounts taken from Substitute Budget Ordinances as approved by Metro Council

Amounts in millions

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Property Tax

400 500 600 700 800 900 1,000 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Budget FY16 Budget

470 598 60 1 60 1 60 8 719 762 757 774 791 78 1 78 9 8 91 912 933 939

Amounts in millions FY01 to FY08 = 60.9% growth FY09 to FY16 = 21.3% growth

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Sales Tax

100 200 300 400 500 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Budget FY16 Budget

237 232 231 240 250 271 28 5 28 5 265 256 258 28 1 30 1 315 325 361

Amounts in millions FY01 to FY08 = 20.4% growth FY09 to FY16 = 36.4% growth

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Pension Funds

Actuarial Value

• f Assets

Unfunded Liability Percent Funded FY2008

$1,921,193,000 $222,951,000 89.60%

FY2014

$2,220,622,000 $467,873,000 82.60%

FY2015

(Preliminary/Unaudited)

$2,450,131,000 $290,299,000 89.70%

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Other Post Employment Benefit (OPEB) Obligations

Unfunded Liability FY2008 $2,220,200,000 FY2014 $2,457,200,000

12

FY2009

• Total budget grew less than 1% over FY2008

* GSD/USD operating budgets dropped by $21 million

• Department reductions ranged from 0% to 12%
• 40% reduction in internal service fee budgets
• Improvements for Fire/EMS, truancy program,

homelessness services and launched Community Enhancement Fund

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FY2010

• Total budget was 2.2% less than FY2009 ‐ $27 million
• Department reductions ranged from 0% to 16%
• Travel savings
• Fleet reductions
• Minimal improvements – benefits, contractual, MTA

and Schools

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FY2011

• Total budget was 1.2% less than FY2010 ‐ $18 million
• Department reductions ranged from 0% to 7%
• Debt restructuring – no property tax increase
• Improvements for contractual commitments, MTA,

Hospital Authority, Fulton Campus operating costs, and crime lab start up costs.

15

FY2012

• Total budget increased 3.8% over FY2011 ‐ $62 million
• Departmental reductions ranged from 0% to 3%
• Crime lab, Madison Precinct, MTA, Goodlettsville Library

and expansion of Limitless Libraries

• McCabe and Riverfront Parks operating costs
• Courthouse security transferred to Sheriff and inspector

consolidation

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FY2013

• Total budget increased 7.85% over FY2012 ‐ $124 million
• Department reductions ranged from 0% to 4%
• 53 cent property tax increase – $100 million of new

revenue

• Improvements included COPS funding, Limitless

Libraries, MTA, Parks, Public Works, fuel, and contractual increases

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FY2014

• Total budget increased 5.86% over FY2013 ‐ $103 million

‐ Reappraisal year

• Department reductions ranged from 0% to 2%
• Retirement incentive – approximately 500 employees
• Improvements included Madison Precinct, crime lab,

special events, Paradise Ridge Community Center, Sevier Park, reopening of Main Library on Mondays

• Small business incentive program

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FY2015

• Total budget increased 4.4% over FY2014 ‐ $79 million
• Department reductions ranged from 0% to 3%
• Domestic Violence Enhancements – Opened JCAC
• Office of Public Guardian
• Barnes Fund for Affordable Housing
• Bellevue Library, Commons Crossings, Lentz, Midtown

Hills, Sevier Park, Parks custodial and grass mowing

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Departmental Budget Savings

More than $75 million has been saved through budget reductions or organizational efficiencies since FY2009. Equates to at least a 35 cents tax increase if these savings were not implemented.

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FY2016 Recommended Budget

$ 1,968,285,900 4.05% increase over FY2015

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Where the Money Comes From

All Other Revenues 11.6% Grants & Contributions 18 .6% Local Option Sales Tax 18 .3% Property Taxes 47.7% Fund Balance 3.8 %

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Total Revenue Growth

$75.2 million

• Property Taxes ‐ $6.0 million
• Local Option Sales Tax ‐ $35.6 million
• Grants and Contributions ‐ $13.9 million
• All Other ‐ $19.7 million

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Recommended Use of Fund Balance

Fund Appropriated for use in FY16 Budget Estimated June 30, 2016 Balance as a Percent of FY16 Budget Estimated June 30, 2015 Balance as a Percent of FY15 Budget OPERATING FUNDS: GSD* General Fund $40,000,000 6.1% 6.0% USD** General Fund $8,070,700 5.7% 8.6% Schools Fund $16,000,000 5.5% 5.8% DEBT SERVICE FUNDS: GSD* Debt Service Fund $5,000,000 5.2% 5.5% USD** Debt Service Fund $1,500,000 9.4% 10.0% Schools Debt Service Fund $3,300,000 5.2% 5.6%

*GSD ‐ General Services District **USD ‐ Urban Services District 24

Fund Balance Usage

FY11 and FY13 are not included because no fund balance was used.

Amounts in millions 20 40 60 80 100 120 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY12 FY14 FY15 FY16

19.2 18 .6 68 .7 10 5.2 52.6 14 .8 18 .6 15.7 31.4 36.0 24.6 4 5.0 72.5 73.9 25

Year-End Fund Balances

Operating Funds*

40 80 120 160 200 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 (Projected)

126.1 121.1 70 .7 59.7 53.7 8 1.9 10 7.6 8 6.2 74 .9 8 6.3 8 7.6 124.8 148 .1 124.8 166.7 26

* GSD/ USD/ MNPS

Amounts in millions

Where the Money Goes

Education 41% Debt Service 10 % Health & Social Services 4% Infrastructure & Transportation 5% General Governm ent 13% Recreation & Culture 4% Public Safety 21% Other 2%

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Where the Money Goes

$76.6 million

• Debt Service ‐ $4.1 million
• Schools ‐ $36.1 million
• FY15 and FY16 Pay Plan needs ‐ $23.6 million
• General Government ‐ $12.8 million*

* Net change after improvements and reductions

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Operating Budget Savings

• Health ‐ $2,953,000
• IOD ‐ $2,151,400
• Pension ‐ $8,128,000
• Other ‐ $2,040,800

Total $15,273,200

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Status Quo Budgets

• Most departmental operating budgets are

status quo and received no reductions

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Schools

FY2015 FY2016 Percent Change Dollar Change Operating Funds

773,920,300 810,000,000 4.66% 36,079,700

Debt Service Transfer

16,147,200 ‐ ‐100.00% ‐16,147,200

Total Budget

790,067,500 810,000,000 2.52% 19,932,500

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Pay Plan Increase History

FY2008

• 2% COLA and increments for eligible employees

FY2009

• Increments for eligible employees

FY2010

• None

FY2011

• 2% lump sum for full‐time staff, $2,000 cap

FY2012

• 1.5% lump sum for full‐time staff, $1,500 cap

FY2013

• 2% for department heads, SR13‐equivalent and upper grades
• 4% increase for all other employees

FY2014

• 1.5% COLA for all employees including part‐time staff (effective Jan 2014)
• Increments for eligible employees

FY2015

• Full funding for raises given in FY2014
• 1% COLA and 2% open range (effective Jan 2015)
• Market adjustment for positions deemed significantly below market (effective

Jan 2015)

• Increments for eligible employees

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FY2016 Pay Recommendations

• Full funding for raises given in FY2015
• 2.5% COLA (effective July 1)
• Increments for eligible employees (effective increment date)
• Compression for certain public safety positions
• 2% Open Range (effective July 1)

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Recommended Subsidies

There is no operating subsidy budgeted for:

• Farmers’ Market
• Municipal Auditorium
• State Fair
• Contractually, the Farmers’ Market lease payment discontinues in FY2016
• State Fair and Farmers’ Market project to be self-supporting in FY2016

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Hospital Authority

20 25 30 35 40 45 50 55 60 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

4 9.8 4 7.3 4 1.7 4 3.2 4 3.2 4 7.5 4 3.9 35.0 35.0

FY10 does not include $31 million loan which was forgiven

Amounts in millions

FY13 includes $4,292,400 supplemental and FY14 includes $5,227,100 supplemental

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Metro Transit Authority

$3,643,000

• Charlotte Pike and Nolensville Road BRT lite
• Employee and benefit costs

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Metro Transit Authority

5 10 15 20 25 30 35 40 45 50 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

18 .2 17.5 19.1 23.0 26.3 29.4 33.4 36.4 40 .0

Amounts in millions

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Other Transit Requirements

• Regional Transit Authority
• $164,500 improvement for a total FY2016

allocation of $320,200

• Commuter Rail subsidy is flat at $1,500,000

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• Beer Inspector ‐ $56,900
• Elections Poll Worker Pay/Staff ‐ $292,400
• Fire Hall maintenance ‐ $150,000
• Stations 19 and 20
• Health ‐ $319,800
• Animal control and dental services
• Human Resources ‐ $182,100
• Veterans’ outreach, domestic partner services and Diversity

Advisory Committee recommendations

• ITS ‐ $2,417,300
• Contractual increases, open data, software support, etc.
• Parks ‐ $1,412,400
• Maintenance, mowing, custodial, etc.

Miscellaneous Improvements

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• Public Library ‐ $1,401,900
• Friday openings, integrated services with MNPS,

annualizes funding for libraries opening in FY2015

• Public Works ‐ $1,261,200
• Utilities, contractual increases, south convenience

center and downtown recycling operating costs

• Special events ‐ $802,200
• Police and ECC

Miscellaneous Improvements

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Office of Family Safety

• Creates new office to coordinate domestic violence

services

• Will manage Jean Crowe Advocacy Center
• Funding transfers from existing allocations
• Small operating budget enhancement to establish

department (e.g. office supplies)

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Other Recommendations

• Barnes Fund for Affordable Housing ‐ $1 million – partially

funded by Air BnB revenues

• Community Foundation – Digital Inclusion Project ‐ $100K
• Nashville Ballet ‐ $200K
• Nashville Technology Council ‐ $75K
• National League of Cities ‐ $500K

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Legislation to Track with Budget

• Operating Budget Ordinance
• Tax Levy Ordinance
• Urban Council Resolution
• Pay Plan Resolutions
• Property Tax Relief
• Litigation Tax for General Sessions Judges Salaries
• Office of Family Safety Ordinance

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Annual Debt Report

BL2014‐696

The annual debt report will be emailed to Metro Council members today.

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Outstanding Debt

Type of Bond Principal Outstanding

Jun 30, 2014 Jun 30, 2015

General Obligation $2,227,730,000 $2,124,090,000 Convention Center Authority $623,215,000 $623,215,000 Sports Authority $157,060,000 $149,115,000 Water and Sewer $796,685,000 $765,185,000

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Annual Debt Service Requirement 2006 – 2016

General Obligation Debt

11.26% 10.94% 10.93% 10.55% 10.53% 5.51% 6.74% 7.42% 10.52% 11.19% 10.50%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% ‐ 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 USD Schools GSD % of Budget

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(As proposed)

General Obligation Debt

Amounts in millions 500 1,000 1,500 2,000 2,500 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 Principal Balance 63.58 %Paid in 10 Years

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GO Commercial Paper

General Obligation Total Combined Commercial Paper Program (in millions)

Traditional Commercial Paper $500 Extendable Commercial Paper $200 Total Combined Program $700

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Capital Investments

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Capital Investments

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Capital Spending Plans*

Amounts in millions *Amounts do not include revenue funded projects

100 200 300 400 500 600 700 FY01 FY02 FY03 FY05 FY06 FY07 FY08 FY10 FY11 FY13 FY14 FY15

179.5 211.7 263.3 18 3.0 30 5.7 318 .7 240 .6 560 .8 250 .0 40 7.7 30 0 .0 275.0 No capital plan in FY04, FY09, and FY12 FY13 had two capital spending plans 51

Capital Spending Plan $520 Million

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Capital Spending Plan

Schools $131 million Public Safety $172 million Parks and Public Works $123 million Other $94 million

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Proposed Bond Issuance

• Bond resolution to be filed authorizing up to $400

million in late July

• Low interest rates
• Financial flexibility reduces outstanding commercial

paper loan to approximately $100 million

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Capital Spending Plan Legislation to Track with Budget

• Capital Improvements Budget Ordinance ‐ May 15th filing
• Initial bond resolution authorizing up to $520 million
• Bond resolution authorizing sale of $400 million

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For More Information Visit the Citizens’ Guide to the Metro Budget

www.nashville.gov/citizens_budget