Minneapolis Park and Recreation Board Committee of the Whole 2021 - - PowerPoint PPT Presentation

Minneapolis Park and Recreation Board Committee of the Whole 2021 Budget Retreat May 14, 2020

www.minneapolisparks.org/budget

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2020 Budget Framework

(Adopted April 22, 2020)

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2020 Budget Framework

Stage 1 – Social distancing requirements, stay-at-home order, closures/cancellations of buildings, events and programs, aspects of service delivery on hold. This stage was initiated on April 3, 2020. 1. Take immediate action to reduce costs a. Hiring Freeze – Appointed, Certified Civil Service and Provisional Employees (part-time and full-time), exceptions to be approved by Division Head and Superintendent b. Spending Freeze – only critical purchases should be made c. Travel and Training Freeze – only required trainings; no travel

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2020 Budget Framework

Stage 2 – Social distancing requirements, modified building, event and program uses/offerings, aspects of service delivery on hold or modified, position MPRB for possibility for rapid restoration of service delivery. This stage is beginning to be implemented where allowable through Superintendent authority and, if approved by the Board, additional items will be completed in the coming weeks due to the extension of the stay-at-home

• rder and the current predictions by the MN Department of Health that the

epidemic peak will occur in early July which is anticipated to require an extended length of the social distancing requirements. 1. Modify revenue estimates as programs and services are re-established, and assistance becomes known a. Establish modified programs and services that do not violate social distancing requirements and/or can be provided virtually (in process) b. Identify and apply for state and federal relief available to local governments (ongoing)

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2020 Budget Framework

2. Determine appropriate level of fund balance that should be used to

• ffset the loss of revenue

a. Identify how emergency fund balance would be replenished to meet financial policy requirements (complete retain enough fund balance to assist if needed for another storm emergency $1 - $2 million) b. Identify and return General Fund one-time fund balance authorizations back to excess fund balance (conversation with Board during Committee of the Whole) 3. Determine internal loan repayments and transfers that can be cancelled

• r delayed

a. Identify General and Enterprise Funds internal loan repayments to defer and extend payback period (complete utilizing Superintendent authority will bring resolutions to confirm in June) b. Identify General Fund internal transfers to cancel reducing the amount available for the program impacted(complete utilizing Superintendent authority will bring resolutions to confirm in June)

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2020 Budget Framework

4. Determine capital and rehabilitation projects that can be delayed or re- aligned a. Identify Enterprise Fund capital and rehabilitation projects to be delayed (in process) b. Consider the realignment of the NPP20 CIP for the years 2020 and 2021 toward rehabilitation vs. capital in year 2020 (complete – Resolution 2020-201 adopted on May 6, 2020) c. Consider the shifting of Operations & Maintenance Lottery-in-lieu excess fund balance to current year General Fund operations (in process – bring forward to Board for consideration in June)

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2020 Budget Framework

5. Take action to reduce personnel costs a. Wage Freeze for all full-time and part-time employees (under consideration) b. Inactivate provisional employees who do not have work assignments in the current service model - Note: allows employees to apply for unemployment benefits (has begun, employees on layoff status to be called back when work becomes available) c. Budgetary Leave enacted for voluntary unpaid leave by Appointed and Certified Civil Service employees (First request complete – 8,312 hours of budgetary leave given by staff)

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2020 Budget Framework

Stage 3 – Economic recession – budget development and financial planning, re-defined service delivery. This stage will be implemented if the State enters an extended economic recession. Board actions will be sought to implement these items, as required. 1. Board direction during budget development and financial planning process for revised 2020 Annual Budget (in process – began with the adoption of this budget framework and will continue through monthly financial status reports and financial discussions with Board) 2. Board direction during budget development and financial planning process for the 2021 Annual Budget (in process - budget retreats and Draft 2021 Budget Framework) a. Wage Freeze for multiple years (City is considering 2020 and 2021) b. Wage Cuts c. Separation or elimination of some positions – vacancy/severance/buy-outs

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General Fund Excess Fund Balance Allocations

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General Fund – Excess Fund Balance Allocations

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Revenue Sources and Economic Risks

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General Fund Revenue Sources

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Property Tax 75% LGA 11% Fees, Fines & Other Revenue 14%

2020 Park Board General Fund Revenue by Major Sources

General Fund Non Property Tax Revenue

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State Aids/Funding 46% User Fees 24% Charges for Services 14% Rental Charges 8% Permits 2% Police Fines 1% Donations & Grants 1% Transfers 4%

2020 Park Board General Fund Non-Property Tax Revenue

Revenue Sources and Economic Risks

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Current Service Level Discussion

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Planning for 2021

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Entering budget process in midst of a health and economic crisis

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Uncertain, instable and unpredictable are words that describe our current condition

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Pandemic duration

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Social distancing requirements

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Stay-at-home orders

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Revenue shortfalls

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Economic recession

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Current Service Level

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Understanding impacts to programs, services, events and park use

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Refining levels of service based on those changes

Current Service Level

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General Fund Property Tax Levy Increase

6.30% 5.38% 4.60% 4.28% 4.23% Adopted Est Est Est Est Est Budget Budget Budget Budget Budget Budget 2020 2021 2022 2023 2024 2025 Property Taxes 66,953,700 71,170,110 74,999,062 78,449,019 81,806,637 85,267,058 Local Government Aid 9,624,270 9,130,605 9,130,605 9,130,605 9,130,605 9,130,605 Commons Transfer 820,000 820,000 820,000 820,000 820,000 820,000 Fees, Fines and Other Revenues 11,836,138 11,602,073 11,602,073 11,602,073 11,602,073 11,602,073 Total Revenue 89,234,108 92,722,788 96,551,740 100,001,697 103,359,315 106,819,736 Full-Time Wages & Fringe 44,202,656 46,515,194 48,246,711 50,037,099 51,888,360 53,802,565 Part-Time Wages & Fringe 10,538,038 11,195,381 11,855,870 12,331,927 12,615,562 12,905,720 Health Insurance 7,248,460 7,610,883 7,991,427 8,390,999 8,810,548 9,251,076 Other Expenditures 24,149,954 24,306,330 25,362,732 26,146,672 26,949,844 27,765,375 Operating Costs 86,139,108 89,627,788 93,456,740 96,906,697 100,264,315 103,724,735 Neighborhood Park Capital Levy 2,180,000 2,180,000 2,180,000 2,180,000 2,180,000 2,180,000 Operations Facilities 500,000 500,000 500,000 500,000 500,000 500,000 Regional Park Transfer 100,000 100,000 100,000 100,000 100,000 100,000 Park Land Acquisition Reserve 315,000 315,000 315,000 315,000 315,000 315,000 Total Expense 89,234,108 92,722,788 96,551,740 100,001,697 103,359,315 106,819,735 Estimated Gap *Does not include tree preservation & reforestation levy

Current Service Level with COVID-19 and Recession Impacts

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COVID-19 Recession Combined General Fund Property Tax Levy Increase 6.30% 6.30% 0.68% 0.68% Adopted Est Est Est Est Budget Budget Budget Budget Budget 2020 2021 2021 2021 2021 Property Taxes 66,953,700 71,170,110 71,170,110 67,410,090 67,410,090 Local Government Aid 9,624,270 9,130,605 9,130,605 9,130,605 9,130,605 Commons Transfer 820,000 820,000 820,000 820,000 820,000 Fees, Fines and Other Revenues 11,836,138 11,602,073 7,729,027 11,602,073 7,729,027 Total Revenue 89,234,108 92,722,788 88,849,742 88,962,768 85,089,722 Full-Time Wages & Fringe 44,202,656 46,515,194 46,515,194 46,515,194 46,515,194 Part-Time Wages & Fringe 10,538,038 11,195,381 10,477,289 11,195,381 10,477,289 Health Insurance 7,248,460 7,610,883 7,610,883 7,610,883 7,610,883 Other Expenditures 24,149,954 24,306,330 23,580,570 24,305,570 23,580,570 Operating Costs 86,139,108 89,627,788 88,183,936 89,627,028 88,183,936 Neighborhood Park Capital Levy 2,180,000 2,180,000 2,180,000 2,180,000 2,180,000 Operations Facilities 500,000 500,000 500,000 500,000 500,000 Regional Park Transfer 100,000 100,000 100,000 100,000 100,000 Park Land Acquisition Reserve 315,000 315,000 315,000 315,000 315,000 Total Expense 89,234,108 92,722,788 91,278,936 92,722,028 91,278,936 Estimated Gap (2,429,193) (3,759,260) (6,189,213)

System Expansion Costs

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Expansion of the park system will necessitate service delivery models be analyzed, adjusted or changed to support the needs of these new areas

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In the current economic climate, property tax increases for these costs are unlikely to occur

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Current resources will need to be re-allocated to maintain these parks during the current pandemic and economic crisis, allowing for data and analytics to be utilized to request future phased in operational increases

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Estimated cost and staffing needs for new parks are listed below.

2021 Estimated Cost Estimated FTE Commons Park maintained to current standard & increased maintenance in downtown service area $250,000 3 Commons & Downtown Policing $210,000 2 Midtown Greenway, Grand Rounds Missing Link, 26th Avenue Overlook, Eight Avenue Streamscape $491,000 6 Wirth Trailhead & CEPRO Policing $100,000 1 Water Works support while transitioning to a self-supporting enterprise. $200,000 2022 Graco Park, Market Square, North Loop $519,000 6 Maintain Current Forestry Staffing (tree levy ends) $560,000 6 2023 Upper Harbor Terminal Park $370,000 4

Maximum Property Tax Levy Discussion

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Board of Estimate and Taxation

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In 1919 an act of the State Legislature created the Board of Estimate and Taxation in the City of Minneapolis

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Membership - the Board consists of six members:

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Mayor or designate

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City Council President

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Chairperson of the Ways and Means/Budget Committee

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Park and Recreation Board Commissioner

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Two members elected city-wide for four-year terms

Board of Estimate and Taxation

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As required by State Law, the Board of Estimate and Taxation sets the maximum property tax levy for the City of Minneapolis, Minneapolis Park and Recreation Board, Municipal Building Commission, and Public Housing Authority

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The MPRB by resolution requests annually the property tax levy maximum amount that the Board of Estimate and Taxation should set for the MPRB

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A public hearing is held to obtain citizen input regarding the setting of the maximum property tax increase

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The Board sets the maximum annual property tax levy increase on or before September 30 of each year for the next budget year

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The Board is also entrusted to incur indebtedness for municipal purposes on request of the City Council

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Issues and sells General Obligation Bonds in support of the Capital Program (excluding Tax Increment Bonds)

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Without the Board of Estimate and Taxation the City would have to go to the State Legislature for approval to issue bonds

2020 City of Minneapolis Tax Levies

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Source: 2020 City of Minneapolis Adopted Budget

Property Tax Allocation by Area

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Source: 2020 City of Minneapolis Adopted Budget

Property Taxes

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Estimated 2020 Property Taxes paid by Minneapolis Residents Parks 8¢ City 33¢ Schools 26¢ County 28¢ Other 5¢

Property Taxes

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Property Taxes on Individual Properties Several factors beyond the change in amount levied affect the annual change in property tax owed on a particular property. Each of these variables may change on a yearly basis, occasionally resulting in sizeable changes in the amounts of property taxes assessed to any one property.

• tax base composition within property classifications
• tax rate of the jurisdiction
• growth or decline in the value of other properties within the

jurisdiction

• properties placed in tax increment financing districts
• improvements to a property

Estimated Impacts of the 2020 – 6.95% Property Tax Increase

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Source: 2020 City of Minneapolis Adopted Budget

Maximum Property Tax Levy Options

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2020 Adopted 2021 Projected Change % Change % Increase City Property Taxes Park Board Budget Deficit Minneapolis Park Board 67,630,000 71,889,000 4,259,000 6.3% 1.1% (2,429,193) Tree Preservation & Reforestation 1,876,000 1,415,000 (461,000)

• 24.6%
• 0.1%

Park Board Total 69,506,000 73,304,000 3,798,000 5.5% 1.0% (2,429,193) 2020 Adopted 2021 Projected Change % Change % Increase City Property Taxes Park Board Budget Deficit Minneapolis Park Board 67,630,000 70,871,000 3,241,000 4.8% 0.9% (3,437,013) Tree Preservation & Reforestation 1,876,000 1,415,000 (461,000)

• 24.6%
• 0.1%

Park Board Total 69,506,000 72,286,000 2,780,000 4.0% 0.7% (3,437,013) 2020 Adopted 2021 Projected Change % Change % Increase City Property Taxes Park Board Budget Deficit Minneapolis Park Board 67,630,000 68,091,000 461,000 0.7% 0.1% (6,189,213) Tree Preservation & Reforestation 1,876,000 1,415,000 (461,000)

• 24.6%
• 0.1%

Park Board Total 69,506,000 69,506,000 0.0% 0.0% (6,189,213) Current Service Level Property Tax Increase 4% Property Tax Increase 0% Property Tax Increase Minneapolis Park & Recreation Board Total Certified Property Tax Levy Options

Draft 2021 Budget Framework

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2021 Budget Framework

 The Minneapolis Park and Recreation Board (MPRB) is entering the 2021 Budget process in the midst of a health and economic crisis.  We are uncertain about when the Coronavirus pandemic crisis will ease and there continues to be instability/unpredictability associated with this crisis.  The negative impact to the local and national economies will be felt long after the health crisis subsides.  Along with social distancing requirements, stay-at-home orders, and current revenue short falls; economic impacts resulting from this health crisis are, at this point, certain to occur.  The Board understands that in an economic crisis the MPRB will need to consider all aspects of strategic cost reductions and budget shifts.  The following 2021 Budget Framework provides a guide for budget development during this uncertain pandemic and economic time.

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2021 Budget Framework

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• A. The Board remains committed to the 2018-2022 Strategic Directions and

Performance Goals and directs that they be a guide to budget development within a reduced revenue and social distancing environment.

• 1. Proposed budget packages must be linked to a strategic direction and

performance goal

• 2. Proposed budget cuts should not increase the disparities in funding

between service areas that were intended to be addressed by the strategic directions and performance goals

2021 Budget Framework

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• B. The Board remains committed to racial equity and requires the use of the

racial equity lens to analyze implications of actions throughout the budget process

• 1. Proposed budget packages and reductions must include the racial

equity impact analysis

• C. The Board supports employee engagement and would like to ensure that

employee’s voices are heard and considered during the 2021 budget process

• 1. Employee budget information sessions will be held after the Budget

retreats

• 2. Employee budget workshops will be held in June

2021 Budget Framework

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• D. The Board recognizes that service models and corresponding staffing

models will need to be re-imagined to accommodate the pandemic and economic conditions.

• 1. Reshape the MPRB organization structure to meet the services needs
• 2. Define service delivery and realign staff as needed with the goal of

providing the least impact to staff

• 3. Limit reductions in staff needed to deliver refined service focus

through

• Wage freezes
• Voluntary budgetary leave
• 4. Consider separation or elimination of some positions that are not

aligned with refined service focus through – vacancy/severance/buy-

• uts/retirement incentives
• 5. If deeper position eliminations become necessary, consider attrition

first

Commissioner Comments & Questions

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Closing Remarks

www.minneapolisparks.org/budget

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