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HomeMy WebLinkAbout02/18/2025 09.D. Information about the upcoming community outreach efforts, budget committee and surveyItem No. 9.D. For Meeting of: February 18, 2025 ITEM TITLE:Information about the upcoming community outreach efforts, budget committee and survey SUBMITTED BY:*Vicki Baker, City Manager Randy Beehler, Communications & Public Affairs Director Mike Bailey, Budget and Finance Consultant BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT SUMMARY EXPLANATION: Council will be briefed on the upcoming budget outreach efforts. ITEM BUDGETED: Yes STRATEGIC PRIORITY 24-25: A Resilient Yakima RECOMMENDATION: Information only. ATTACHMENTS: Budget Committee Presentation 1x Yakima theme.pdf 242 24 3 24 4 24 5 24 6 24 7 24 8 24 9 25 0 25 1 25 2 Distributed at Meeting: a7/C'�'QU.?6j Item# City of Yakima, WA Citizen's Budget Committee Summary of the February 13, 2025 meeting Welcome, purpose and scope Committee members introduced themselves and shared their perspective on what makes Yakima special. City Manager, Vicki Baker and Interim Finance Director introduced themselves and provided a bit of background. The purpose of the committee was summarized to include: 1. Developing an understanding of city budgets and the City of Yakima's budget specifically. 2. Create an awareness of options that cities in Washington have to raise revenues 3. Review and understand city programs within the scope of the committee's work (e.g. General Fund) 4. Provide advice to the council to include general feedback and advice as well as a prioritization of the city's programs from their perspective. The scope of the committee's work is the City's General Fund and related fund activity as well (i.e. those other funds that rely on the General Fund for resources. Meeting times, rhythm,formats After a brief discussion, the committee determined that meetings will be held on Wednesday afternoons at 4:30 pm and generally last an hour. It is anticipated that there will be about 10 meetings needed to complete the assignment. Orientation on city budget laws and budgets 1. Cities are required to adopt a budget prior to spending any money for the fiscal year. The budgeted amount is called an "appropriation" and is the legal delegation from the council (the legislative branch) to the staff(the executive branch). This is similar to the state and federal governments (where you may have heard of"shut-downs" due to not adopting a budget (or a "continuing resolution" in the federal government's case. 2. Budgets are adopted by "fund". a. A "fund" is a separate accounting entity which provides for the segregation of different kinds of restricted monies (such as a water utility, transit system or airport). Each fund has its own balance sheet and money can't be shared between funds without an underlying relationship (like providing services from one fund to another). Summary of the February 13, 2025 meeting i. The scope of our work is the General Fund (and related funds—see more about funds later). 3. Cities can budget for either one fiscal year at a time (in WA all cities and counties use a calendar fiscal year) or two fiscal years at a time (called a biennium). a. Yakima uses a biennium budget—two years at a time. b. The current budget was just adopted by the Council last December for the 2025— 2026 biennium. i. When using a biennium budget cities are required to conduct a mid- biennium review between September and December of the first year of the biennium. ii. Our work is focused on providing input to the council for their mid- biennium review of the current biennial budget. iii. In Yakima, the first year of the biennium anticipates using up to $4.2m (I'll use m for millions and k for thousands) of the current $16.45m fund balance to balance and the second year would use another$7.8m resulting in an ending fund balance at the end of 2026 (the end of the biennium of$4.35m. See table below for a summary. 2025 2026 Beginning Fund Balance 16,451,654 12,223,758 Femenues 71,452,642 71,522,992 Bggendi tures 75,680,538 79,391,731 Annual Difference (4,227,896) (7,868,739) Biding Fund Balance 12,223,758 4,355,019 4. "Funds" in city (and all governmental) budgets (note: whenever I refer to funds, I'm talking about the accounting entity as described herein and not about moneys). a. Cities use three types of funds as illustrated on the next page. i. Governmental funds are used for non-proprietary purposes ii. Proprietary funds are used when all expenses are expected to be provided for by participant charges (e.g. water rates for the Water Fund, airport leases for the Airport Fund, etc.) 2 Summary of the February 13, 2025 meeting All City Funds I � I Governmental Proprietary Fiduciary — General Fund — Enterprise _ Special _ Internal Revenue Service — Capital Debt b. Governmental funds—a "near-term" focus (no long-term assets or liabilities) i. General Fund —for all activity not required to be accounted for in another fund (I'm sorry—that is the textbook definition no matter how ridiculous it sounds). More on this later ii. Special revenue funds—those activities where an external authority has mandated that resources are restricted to a specific purpose. In Yakima examples are Streets (restricted use of Motor Vehicle Excise Taxes), Tourist Promotion (restricted use of Hotel/ Motel Taxes), etc. iii. Capital funds—any capital improvements not related to a proprietary fund. iv. Debt—any debt service payments not related to a proprietary fund c. Proprietary funds—a "long-term" focus including capital assets and long-term liabilities (like debt). Proprietary funds have revenue structure intended to recover sufficient resources to pay all the expenses related to providing the service (e.g. water rates for water service, airport leases for airport service, etc. 3 Summary of the February 13, 2025 meeting i. Enterprise funds—those proprietary activities where the customers are external to the city (examples are Water Utility Fund, Wastewater Utility Fund, Airport Fund). ii. Internal Service funds -those proprietary activities where the customers are internal to the city (Fleet Fund, Risk Management) d. Fiduciary funds—where the city is acting as a custodian on behalf of someone else (and example is the Cemetery Trust Fund) e. Governmental funds use a "modified-accrual basis of accounting (near term focused) and proprietary funds use a "full-accrual" basis of accounting (long-term focus). f. Again, we are only focused on the General Fund and related activities. g. See page 371 of the city's budget to see a full list of funds and related activities. 5. City fiscal health a. Governmental funds use a "fund balance" to roll-forward the differences between revenues and expenditures from year-to-year. i. Fund balances in governmental funds is essentially the equity that a community has developed in each fund over time. ii. Fund balances provide resources for unforeseen events (such as an unexpected need for expenditure or natural disaster), cash flow (city revenues come in unevenly during the year which would result in cash deficits at times without a sufficient fund balance), and stability over time. iii. Councils often (and should) establish parameters around fund balances known as financial policies (more on this later). The Yakima City Council's policy fund balance level is 12% of the expenditure budget. (It was 16% and council lowered it to 12% in adopting this budget). 6. Financial reporting a. Cities produce an annual financial report (which you can find on the city's website here) which is audited each year by the Washington State Auditor's Office (you can also find the city's audit reports on the State Auditor's v',/eb ; e here). b. Cities also produce interim financial reports and Yakima does this quarterly. You can find these on the Finance Department website — here. c. Note that the basis of accounting for the budget and that used for the annual financial reports are different (and this is an imposed difference—not our choice!) So it is difficult to compare the information in the annual financial report to that in the budget reports (such as the quarterly report). 7. Financial policies 4 Summary of the February 13, 2025 meeting a. Cities (and all local governments) adopt "financial policies" to provide guardrails to good financial management. An example is the fund balance policy which was adjusted from 16%to 12% as described above. The city's relevant financial policies can be found in the budget on page 369. b. You will note that the anticipated ending fund balance at the end of 2025 is 16.15%of the budgeted expenditures (being above the policy threshold is good) and the anticipated ending fund balance for 2026 is 5.49%of budgeted expenditures (which is bad and the reason the council created this committee). 8. Financial management in general a. Cities, like any organization, has many related financial management responsibilities like cash management, banking, debt management, investment management, accounts payable, accounts receivable, etc. We did not discuss future topics of the committee, nor did we review the resources that are included in the attached PowerPoint presentation. They are available for the committee's review and comment. 5 Distributed at Meeting: 2// /22 Item# CITY OF YAKIMA RESOLUTION NO. [XXXX] A Resolution Expressing the City of Yakima's Profound Concerns Regarding the Performance and Accountability of the Yakima County Homeless Coalition and Stating the City's Intent to Explore Alternative Strategies if Meaningful Reform is Not Implemented WHEREAS, the Yakima County Homeless Coalition (YHC) was established to coordinate funding and resources to address homelessness in Yakima County, with a mandate to implement effective and measurable solutions; and WHEREAS, the City of Yakima has participated in the coalition in good faith, contributing resources, leadership, and funding with the expectation that the coalition would effectively manage homelessness initiatives; and WHEREAS, despite the Yakima County Homeless Coalition receiving an estimated [XX] in annual funding, with only [XX] coming from local 2163 funds, homelessness in Yakima County has continued to increase, demonstrating a failure to produce meaningful results despite substantial financial investment; and WHEREAS, the coalition's 2019-2024 Five-Year Homelessness Housing Strategic Plan has been a total failure, as it has lacked clear, measurable outcomes from the start and has not led to a reduction in homelessness, improved coordination of services, or better financial accountability; and WHEREAS, the coalition's annual budget has increased, yet there has been no corresponding decrease in homelessness, raising serious concerns about the effectiveness of current policies and spending priorities; and WHEREAS, the City of Yakima and other participating cities have been underrepresented in decision-making within the coalition, despite being the primary jurisdictions affected by homelessness and contributing significant local resources to addressing the crisis; and WHEREAS, the City of Yakima, along with other participating cities, has no faith in the current staff within the Yakima County Health and Human Services (HHS) Department to successfully administer the Homeless Response System, given their track record of inefficiency and lack of meaningful results; and WHEREAS, the City of Yakima urges the Yakima County Commissioners to remove the administration of the Yakima County Homeless Coalition and Homeless Response System from the Health and Human Services Department and seek a different project manager and department to facilitate these programs, ensuring leadership that is competent, accountable, and responsive to the needs of the cities most impacted by homelessness; and WHEREAS, the City of Yakima expects its concerns to be heard and resolved through meaningful action that includes better governance, oversight, and measurable improvements in homelessness response efforts; and WHEREAS, it is the duty of the City of Yakima to ensure that public funds are used effectively and that programs intended to assist the most vulnerable populations achieve tangible, measurable results; and WHEREAS, the City of Yakima is prepared to explore alternative models of addressing homelessness, including localizing homelessness services, reallocating funds to more effective programs, and advocating for state intervention if the coalition fails to reform; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: Expression of No Confidence: The City of Yakima formally expresses no confidence in the Yakima County Homeless Coalition's ability to effectively manage homelessness programs without significant structural and leadership reforms. Demand for Immediate Reforms: The City of Yakima calls upon the coalition to: • Conduct a full independent audit of its finances and expenditures. • Implement clear performance benchmarks for funded programs. • Establish greater transparency in decision-making and fund allocation. • Prioritize direct input from member cities that are most affected by homelessness, ensuring that local jurisdictions—not external service providers—have a stronger voice in funding and policy decisions. • Produce and share performance outcomes from the past three years to evaluate the effectiveness of current programs and strategies. Call for Removal of the Homeless Response System from HHS and Selection of a New Project Manager: The City of Yakima urges the Yakima County Commissioners to remove oversight of the Yakima County Homeless Coalition and Homeless Response System from the Health and Human Services Department and appoint a different project manager and department to administer these programs effectively. Cities must have confidence in the leadership overseeing homelessness initiatives, and the current administration within HHS has failed to demonstrate the necessary competence and accountability to continue managing these efforts. Exploration of Withdrawal and Reallocation of 2163 Funds: If meaningful reforms are not implemented within 90 days, the City of Yakima will begin formal discussions on withdrawing from the coalition, reclaiming its allocated 2163 funds, and pursuing alternative funding and service strategies to address homelessness more effectively. Commitment to Real Solutions: The City of Yakima reaffirms its commitment to addressing homelessness in a way that is fiscally responsible, transparent, and results-driven, ensuring that resources reach those most in need and produce measurable improvements in community well-being. PASSED BY THE CITY COUNCIL, this [XX] day of[Month], 2024. Signed: [Mayor's Name], Mayor City of Yakima Attest: [City Clerk's Name] City Clerk