Presentation of Proposed Budget Budget Overview Requirements, - - PowerPoint PPT Presentation

 Presentation of Proposed Budget

• Budget Overview

 Requirements, Format, Funds, Process

• Citywide Goals & Priorities
• Capital Projects / Purchases
• Operating Budget Overview
• Community Funding
• Revenue Assumptions
• Status of Fund Reserves
• Contingency Planning
• Next steps

Colorado Revised Statutes requirements:

 Submit an estimated budget on or before October 15  Budget format and content:

• By fund & spending agency
• Sources of revenue & object of expenditures
• Compare to prior completed fiscal year, current fiscal year (est.)
• Fund balances (est.) at beginning & end of year
• Written “budget message”
• Lease-purchase disclosure

 Notice of Budget  Budget Hearing, Adoption, Appropriate of Funds  Certified copy filed with the State of Colorado  Supplemental budget amendment & appropriation

 Separate funds – different revenue sources and

expenditures

• Government funds – tax revenue used for public services
• Proprietary funds (Enterprise funds) – fees charged to specific

users

 Salida has four separate funds, five separate budgets

• General Fund
• SteamPlant Enterprise Fund
• Water Activity Enterprise Fund

 Water Operations  Sewer Operations

• Conservation Trust Fund (CTF)

 Separate with some city-wide costs allocated to multiple

funds

Funding Sources / Uses of Each Fund:

 General Fund – tax revenue used for general

government services; partial cost recovery for certain user-based services

 Enterprise Funds – user fees for the services provided

(goal is to be self-sustaining; like a business)

 Conservation Trust Fund – state lottery proceeds

(distributed based on population) for parks / recreation / open space

 "Revenue" means all resources available to finance

expenditures

 "Expenditure" means any use of financial resources

• f the local government consistent with its basis of

accounting for budget purposes for the provision

• r acquisition of goods and services for operations,

debt service, capital outlay, transfers, or other financial uses

 If expenditures exceed current revenues, this

requires the use of reserves or financing

Internal Process:

 Continual process – projects and goals discussed

throughout the year in work sessions, public meetings

 Website post and “City News” column announce the

“official” beginning of the annual budget process

 City Administrator and Finance Director meet with

Department Heads before taking requests to the council

• Alternatives considered
• Timing, readiness of projects
• Prioritization

 Staff obtains direction from city council in the budget

work sessions before completing the first draft

Internal Process, continued:

 All work sessions with council are noticed and the

public is invited

 After presenting the proposed budget, a Notice of

Budget is published in the Mountain Mail and Public Hearing date set

 A copy of the proposed budget is made available at

City Hall and on the website

 Additional budget work sessions may follow  Budget Hearing  Fee schedules, pay plan update adopted  Adopted by Council before end of the year

 Budget directs resources to achieve goals and

priorities set by the council

 Public input  2015 Goals:

• Maintain and improve Salida’s existing assets
• Do it right and make it last
• Increase pride in the community and confidence in

local government

• Invest in employees
• Practice fiscal responsibility and manage debt

responsibly while performing city services effectively and efficiently

Services Provided:

 Administrative – general government, liquor and marijuana

licensing, birth and death certificates, municipal court, intergovernmental facility management, water & wastewater

• perations

 Community Development – land use and zoning, planning

improvements, historic preservation

 Police – 24/7 crime prevention & law enforcement  Fire – 24/7 emergency & fire response & prevention  Public Works – operation, maintenance and improvements of all

City infrastructure including parks and trails (tracked separately)

 Arts & Recreation – swimming pool, recreation programs, event

center

 Other – airport, community funding program, etc.  Water Treatment and Delivery  Wastewater Collection and Treatment

 Proposed budget

includes $14.6 million in expenditures.

 Total “normal” annual

budget is ~ $10 to 11 million.

 Again in 2015, we will

exceed this level due to the timing of major capital projects (with significant grant funding) in the water and wastewater enterprise fund, as well as the general fund.

 $7.2 million total (49% of total spending)

 $1.8 million projected from grants and

contributions

• Grant secured for river trail ($500k), water treatment plant

($253k in 2015) and water line to wastewater plant ($430k in 2015)

• Grant applications pending for Scout Hut ($200K), outdoor

soaking pools ($200k) and Kissell restoration ($72k)

• Donations for Kissel restoration, tennis courts, dog park

timed locks and sound barrier

 Restricted funds – in addition to “normal” use of

restricted sales tax revenue for general fund projects, the capital budget includes the use of some PEG fees and fees in lieu of open space

 Use of reserves - $1.5 million total

General Fund - $3.6 million

 Largest area of spending is streets -$1,134,800  Use of city funds for sidewalks - $130,000  Planned projects:

• H Street completion
• Slurry Seal

 N Street  Nicholls Street  8th Street  E Street  Dodge

• Rebuild – 14th (J to K) and two blocks of K Streets

 Pool / Recreation projects – $585,600  Parks & trails projects - $363,300

Water System - $1.46 million

 Water treatment plant (final phase)  H Street water mains  Fire hydrant replacements  Replacement pickup truck  Design of disinfection compliance

monitoring improvements

Wastewater System – $1.04 million

 Placeholder for sewer line replacements (pending report

from video camera project)

 Water line to plant  Replacement pickup truck

 Total Debt Reduction (all funds) - $677,000  Debt Service (P&I) – 8.6% of total revenue  Debt Balances Remaining at end of 2015:

• General Fund - $1.4 million
• Water Fund - $2.5 million
• Wastewater Fund - $11.5 million

 Total Cash Balances at projected at $4.5 million at

the end of 2015 after using some reserves for capital – 62% of operating revenue

 Debt agreements restrict the use of over

$900,000 of the water and sewer reserves

 Personnel Costs – most significant category of

• perating expenditures
• $3.7 million in compensation plus $1.3 million in taxes

and benefits

• New full time position – Civil Engineer / Project Manager
• Two positions changing from part to full time
• 5% net increase in FTEs (hours worked)
• 3% COLA + 3% merit (except for management) and

market adjustments for police, fire and public works staff

• Salary ranges in pay plan generally increasing by 3%

COLA except at top and bottom; 4.5% at Level 2 and 1.9% at Level 3

Department Personnel Contracted Services Supplies & Materials Utilities Other Operating Costs Total Administration 399,400 $ 179,000 $ 7,500 $ 24,900 $ 180,700 $ 791,500 $ Community Development 184,200 16,400 2,100 100 14,700 217,500 $ Police 1,288,200 196,000 59,800 28,800 31,200 1,604,000 $ Fire Department 843,700 37,400 32,700 3,800 37,900 955,500 $ Public Works 472,300 16,800 54,100 131,000 68,000 742,200 $ Pool and Recreation 423,500 22,500 47,300 71,900 69,600 634,800 $ Parks and Trails 183,500 2,300 19,000 49,500 20,500 274,800 $ Other

• 40,400
• 12,000

82,000 134,400 $ Totals 3,794,800 $ 510,800 $ 222,500 $ 322,000 $ 504,600 $ 5,354,700 $ 71% 10% 4% 6% 9% 100%

Department Operating Expense Revenue Net Operating Expense Cost Recovery Administration & General Government 791,500 38,000 753,500 5% Community Development 217,500 26,000 191,500 12% Police 1,604,000 75,000 1,529,000 5% Fire 955,500 85,000 870,500 9% Public Works 742,200 38,000 704,200 5% Recreation & Aquatic Center 634,800 435,600 199,200 69% Parks & Trails 274,800

• 274,800

0% Other 134,400

• 134,400

0% SteamPlant 349,400 261,000 88,400 75%

 A record number of requests received (26)  $93,599 in funds requested (more than 3x what

is proposed for this funding round)

 Proposed budget of$30,000

• $27,000 to be awarded now
• $3,000 to be reserved for fee waiver requests

 Objective to enhance city operations and enhance

quality of life

 Staff committee evaluated requests and made

recommendations for funding

• Needed support from more than one committee member
• Recommended amounts weighed for overall conclusion,

as well as overall percentage support from city

 Historical funding is as follows:

• 2007 – $750
• 2008 – $5,750
• 2009 – $22,785
• 2010 – $10,000
• 2011 – $16,863
• 2012 – $52,147
• 2013 – $61,629
• 2014 – $62,000 (original budget)
• 2015 – $30,000 (proposed budget)

 Intent to “supplement municipal government

• perations…”

 Net decrease in costs due to non-recurring

items in 2014

 No staffing changes  Operating revenue exceeds operating

expenditures for water and wastewater systems (need to get past major capital projects)

 75% operating cost recovery at SteamPlant

Event Center

 Sales tax – growth of 5% in 2014 and 2% in 2015  Occupation tax – no change from current forecast

(grew 20% in 2015; significant variability in the past due to delinquencies)

 Pool / Recreation / Parks revenue growth of 15%

(currently tracking at 11% through August)

 Other general fund revenue sources – few changes  Inflation increase in water & sewer rates of 2.9%  2015 Fee Schedules to be approved October 21 with few

changes

 General Fund - fire inspection fees, parking fines, pool (still pending)

 Water and sewer – quarterly charges, lab and outside septage, development fees

Winter Summer Typical usage 15,000 50,000 Free usage 6,000 6,000 Water Service 53.24 $ 53.24 $ Maintenance 18.48 18.48 Usage 14.76 77.46 subtotal 86.48 149.18 Sewer Service/Maintenance 55.76 $ 55.76 $ Usage 11.11 11.11 subtotal 66.87 66.87 Total per quarter 153.35 $ 216.05 $ Monthly 51.12 $ 72.02 $ Increase - quarterly 4.36 $ 6.21 $ Increase - monthly 1.45 $ 2.07 $

 General Fund – “Healthy”

• The 2015 proposed budget uses $450,000 in reserves

added in recent years for capital projects

• $2.9 million in cash at the beginning of 2014; ending

balance may be relatively unchanged (depends on the timing of capital spending)

• TABOR emergency reserve and Salida’s incremental

“contingency fund” (15% of operating budget) are fully funded

 Conservation Trust Fund – Adequate

• Just over $100,000 at end 2014
• Plan to spend current lottery distribution in 2014 and 2015

 $2.9 million at the beginning of this year; no

significant change at year end

 Recent increases (decrease) in fund balance:

• 2013 - $109,000
• 2012 - $859,000
• 2011 - $211,000
• 2010 - $269,000
• 2009 – ($1,375,000)
• 2008 - $174,000

Water System – Insufficient Level

• Four years ago, council took action needed to resolve the

pending financial insolvency of the water system. After the completion of a capital improvement plan (CIP) and rate study in 2011, user fees were increased significantly.

• 2012 started with no available reserves and a $300,000

“intra-fund” loan to the sewer system (pending availability

• f funds from a zero percent interest loan secured for

system improvements).

• 2013 started with nearly $700,000 in reserves for capital

needs; ended with nearly $1.0 million

• 2014-2015 treatment plant upgrade uses water reserves

(as planned since CIP) plus some reserves from wastewater and a $1.5 million DOLA grant

 Sewer System – Adequate Level

• Reserves saved before the plant upgrade; $1.35

million used before the USDA loan/grant

• 2013 started with $3.1 million in reserves and

ended with $2.6 million

• 2014 may be relatively unchanged (more system

development fees than originally projected)

• Expect to transfer some funds for the water

treatment plant upgrade

• Expect a break-even after sewer line replacement

project is completed

Water System Wastewater System $1.3 million at start of this year; less than needed for plant upgrade 2014-2015. Changes in reserves:

 2013 - $301,000  2012 - $79,000  2011 – $535,000  2010 – ($179,000)  2009 – ($1,483,000)  2008 – ($966,000)

$2.6 million at start of this year; slightly less projected at end of 2014. Changes in reserves:

 2013 – ($464,000)  2012 – ($9,840,000)  2011 - $10,809,000)  2010 – ($464,000)  2009 - $182,000  2008 - $347,000

 42.7% of city sales tax used for capital

• 44% of 2% restricted for capital
• 40% of 1% being budgeted for streets capital

 Based on proposed sales tax revenue of $4,468,600:

• 1% of 2A = $14,895
• Difference from 40% to 75% = $521,325

 Salida spends 2-3x more on capital than average for

Colorado municipalities, placing significant constraints

• n the operating budget. (See comparison data.)

 Council needs to begin considering what services to cut

if the Carlisle/Farney initiative passes. (Keep in mind decisions in the 2015 budget that could be affected.)

 Big Picture:

• Life is good in Salida!
• We spend a much larger percentage of our total budget on

capital

• Capital needs being addressed with responsible financing
• Requires tight management of operating costs
• General Fund debt minimal
• Enterprise Fund debt significant, but in accordance with long-

term plans, at good rates & reasonable level of debt service

• Total reserves adequate for emergencies & planned capital
• Current revenue streams provide for managed current

spending

 Next Steps:

• October 20 work session
• October 21 adoption of fees, pay plan
• November 5 budget hearing & adoption