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11/01/2011 08 2012 Preliminary Budget - Executive Summary
BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON • AGENDA STATEMENT Item No. For Meeting Of: November 01, 2011 ITEM TITLE: Presentation of the 2012 Preliminary Budget — Executive Summary. SUBMITTED BY: City Manager and the Finance Division CONTACT PERSON: Don Cooper, City Manager Rita DeBord, Director Finance and Technology Cindy Epperson, Deputy Director Accounting and Budgeting SUMMARY EXPLANATION: Attached is the City of Yakima's 2012 Preliminary Budget — Executive Summary, for Council's information and reference as you deliberate on the 2012 budget. This document includes 2012 budget information for all City funds. The Executive Summary Document is broken into three primary categories: A. Budget Information: includes 2011 year -end forecasts and some highlights of 1111 activities during the year as well as the 2012 Preliminary Budget information. B. Policy Issues: includes the specific budget items needing Council direction: (a) POG Budget Reductions Policy Issue - as included in the Preliminary Budget presented to Council on October 11th, (b) Supplemental Gen. Government budget reduction / revenue options Council may wish to consider and (c) Other Policy Issues C. Exhibits: contains numerous charts and graphs regarding the City's fiscal status, multi -year budget comparisons, how citizen tax dollars are allocated; expenditure / revenue comparisons with other municipalities, and various expenditure breakdowns. Continued on next page... Resolution Ordinance Other (Specify): Report Contract Mail to (name and address): Phone: Funding Source n/a APPROVED FOR SUBMITTAL:i��i',.. %�l.t,.1 City Manager • STAFF RECOMMENDATION: Accept Report and provide direction on Policy Issues BOARD /COMMISSION RECOMMENDATION: COUNCIL ACTION: 2012 Budget Status: • At the Council Budget Workshop held on October 11, 2011, the City Manager presented Council with the Preliminary 'General Government budget as developed according to the following Council directions: (1) utilize. the Priorities - of Government (POG) model and (2) allocate projected 2012 revenues to the six budget priorities in the POG model in the same relative percentages as the prior year (as modified by budget adjustments authorized by Council earlier this year), and (3) without utilizing cash fund balances to balance the budget. At this workshop, the City Manager presented a balanced Budget, based on the above criteria, which included the elimination of several vacant positions - but no layoffs. (The list of budget / service reductions included in this budget is shown on page 6 of Section IV.) . • Council voiced concerns regarding the Preliminary Gen. Government budget relative to the elimination of six vacant police officer positions and directed the City Manager to provide another budget reduction option sufficient to cover the costs of the six vacant police officer positions - and authorized the City Manager to adjust the POG model' percentage allocations of the six budget priorities, as necessary, in order to accomplish the objective of this request. • Supplemental Budget Reduction Options: The City Manager has developed supplemental budget reduction options for Council's consideration and distributed a memo to Council dated October 24 that provided a list of each of the options. (Copy of memo, is included in Section IV of this document.) • The 2012 Preliminary budget for all City funds is included in this document. (Section 11 General Government Funds; Section 111 - All Other Funds) • Council Action: at this time, staff requests direction regarding the Policy Issues listed in Sections IV and V, here in: > Section IV relates to the budget / service reductions and /or revenue increases necessary to balance the General Government Budget. > Section V includes all other Policy Issues proposed for the 2012 budget Note: the General Government Budget information included in this document reflects the Preliminary Budget as previously presented to Council on October 11, 2011; once Council provides direction on the above items, staff will update the Budget to reflect changes, as applicable. • . F It c - City Clerk -, • File CITY OF ''..)K11/141. I WASHINGTON _ . I dP dIP 2012 Preliminary Budget 1 • Executive Summary 1 ,, 1111111111•■ - # 4 I .... — III -,a _____. • 4 • z ' -L. ` i - A . ' =.° I k ; 0 • A 4 I , , : • • 1 , . I .!.' ....,""r--.... 4 , 0-....4::.0 , ' . - • f ......„ _ I U 7 ..-._. .--.... .--...... .4 - , ..._ , ../11....-- -- ---• _ • ----- - --- 4 41 . . . . . - 44 ' k • Ii II • I • - 4 v i 1 I 41-...am„,-.... ...-- \'• t i N a I • I ii' I- - : I II • 01 I . . 4. I ,IP ■ I .1 . , -.,.... .1 . I 1 / . I I. . . . . I - ••.„ . • . ■ - —... . . . **, • - ' I CI Aj IMP i # 0 • W ' III ^ ' ' j I ■ !Illt • • ie.'. .. 1 ' - • ; ; V t - .! . 4 e. • 1 1 I " • . All 41. 4 , A Art - li r - 1 -- -" .. milui....- i .1 . tie ilda wIlrikt 4- 1 4 1111P1 ,t.. Nr- • • IrJ XI t -.4 .- ...-- - -,.4 i \ .....g5 4Ar ? • - . - 1 .t 4 Si A - t - -a- - . I I 1 CITY OF Y2 ' 2012 PRELIMINARY BUDGET EXECUTIVE SUMMARY TABLE OF CONTENTS I SECTIONS BUDGET I. INTRODUCTION Transmittal Budget Summary ' II. GENERAL GOVERNMENT FUNDS Year in Review ' Revenue Trends Expenditure Trends III. OTHER FUNDS POLICY ISSUES W. BALANCED BUDGET OPTIONS ' V. OTHER POLICY ISSUES EXHIBITS ' > Three -Year Budget Comparison > What You Pay and What You Get > Supplemental Information I I , CITY OF � I 2012 PRELIMINARY BUDGET EXECUTIVE SUMMARY I I Insurance & Risk Mgmt $13.0 Million I Equipment Rental $5.5 Million Police, Courts, Fire $41.3 Million I Water & Irrigation $17.8 Million I I City Administration $6.8 Million I Wastewater Comm & Tech $30.4 Million &Other Svcs $7.2 Million I Other Operating Funds I Refuse �M. $16.5 Million $5.1 Million ik 1 '116. Transit Streets, Eng, Plan & I $9.1 Million Codes Stormwater Corn & Econ $5.8 Million Capital Development I $2.4 Million Improvement $2.1 Million Parks & Recreation $14.1 Million $4.0 Million Debt Service I $6.3 Million I ($57.9 Million General Government) I $187.4 MILLION I Preface— 1 I CITY OF Ya Lil.tt I I VISION STATEMENT I To create a culturally diverse, economically vibrant, I safe, and strong Yakima community MISSION STATEMENT 1 To rovide outstanding services that meet the community's needs P g tY I To govern responsibly by effectively managing and protecting public resources I To build trust in government through openness, diverse leadership, and communication I To strategically focus on enhancing Yakima's quality of life I STRATEGIC DIRECTION PRIORITIES I Maintain and Improve Public Health and Safety I Efficiently Manage Public Resources and Ensure Fiscal Stability I Promote Economic Development and Diversification I Preserve and Enhance Yakima's Quality of Life I Provide Responsive Customer Service and Effective Communications Build and Utilize Strategic Partnerships I I Adopted March 2009 I Preface- 3 ' INTRODUCTION: TRANSMITTAL e OFFICE OF THE CITY MANAGER `'` • a1 129 North Second Street City Hall, Yakima, Washington 98901 Phone (509) 57S4040 1 MEMO TO: Honorable Mayor and Members of the Yakima City Council FROM: Don Cooper, City Manager DATE: November 1, 2011 SUBJECT: City Manager's 2012 Preliminary Budget — Executive Summary Pursuant to the provisions in the City Charter, I am presenting to you the 2012 Preliminary Budget for the City of Yakima. > The total Preliminary City Budget for 2012 is $187.4 million, is balanced within existing resources, and is 10.2% less than the 2011 amended budget. ' > The Preliminary General Government Budget for 2012 is $57.9 million, and is also balanced within existing resources in accordance with Council's direction. The General Government Budget for next year is 1.2% less than the 2011 amended budget. ' The City of Yakima, like most local government ty go e nment entities throughout Washington State and across the nation, has been affected by the persistent national economic recession which has severely curtailed the City's traditional sources of income, resulting in chronic funding shortfalls. Additionally, the City has little control over our largest cost center (labor), except to reduce the ' overall number of employees. These issues and ballot initiatives that restrict / reduce financial support to the City have contributed to the consistent depletion of basic resources to pay for core municipal services such as police, fire, streets, parks, planning and others. The hard reality is that the City needs to address the issue of Service Sustainabili ty in 2012. We are looking at unsustainable service levels next year and beyond, despite the fact that the City has consistently taken significant steps to reduce costs, including; the elimination of 41 positions from the General Government budget from 2008 — 2011 and an additional 12 positions are eliminated in the Preliminary 2012 budget; most city employee's salaries have been frozen several times in recent years; many employees took pay reductions in 2010, through furloughs; and Firefighters accepted a one -time salary reduction of 3% in 2011. 1 Introduction • Section I —1 We are looking at difficult budgets in coming years with little chance of maintaining the status quo and with little or no capital improvements or equipment upgrades / replacements. In 2012, the Council should dialogue with the community and determine what the community is willing to pay 1 for and wants, and what services should be consolidated, privatized or discontinued. Council Action Needed: The 2011 projected year -end results and the Preliminary 2012 Budget is 1 outlined for you on the following pages of this document. Before staff can take the necessary steps to finalize the 2012 budget, we need Council Direction regarding the various options available for balancing the 2012 Budget (refer to Section IV) and regarding miscellaneous Policy Issues (refer to Section V). All Policy Issues are included in Sections IV and V of this document — behind the "Policy Issues" tab. t City Management is prepared to assist the Council in every way we can to help you reach final decisions on the City budget for 2012 and the services we will deliver to the public next year. ' Respectfully submitted, Don Cooper, City Manager 1 I I 1 1 I I 1 I 1 2 — Section I • Introduction t INTRODUCTION: BUDGET SUMMARY This Budget Summary Section provides a high -level overview of the 2011 year -end forecast and the preliminary 2012 budget, along with significant issues that have affected the City's fiscal position in the past year and /or anticipated to have a material impact in 2012. More details regarding these issues can be found in the "General Government Funds" and the "Other Funds" Sections herein, (Sections II and III respectively). ' 2011 YEAR END FORECAST 2011 General Government year -end revenues are projected to be $57.3 million, or slightly less than 2010 Actual revenues (or $57.5 million); with an increase of 0.9% projected in 2012 (to $57.8 million). The 2011 General Government revenue budget was anticipated to be $57.1 million- a decrease of 0.7% from the prior year; however, several major revenues slightly exceeded estimates, so that the year -end estimate is slightly more than the original budget. Current expenditure projections indicate that 2011 year -end General Government expenditures will be ($0.9) million less than budgeted. Most of the savings are the result of position vacancies throughout 2011, including both the Police and Fire Chief for the entire year, (refer to Section II - General Government Funds - for more information on the budget under -run). ' The net use of reserves in 2011 is estimated to be about 343 000; which results in a beginning $ � g balance going into 2012 of approximately $5.6 million or 9.7% of expected expenditures. 2011 AND 2012 - REVENUE AND EXPENDITURES OVERVIEW General Government Budget ' ➢ 2011 year -end expenditure estimate is $57.7 million, or ($0.9 million) below the amended budget of $58.6 million. ➢ 2012 expenditure budget is $57.9 million; $0.7 million, or 1.2% below the 2011 amended budget of $58.6 million. ➢ 2012 projected revenue is a $57.8 million or .9% more than the estimated 2011 year -end revenue of $57.3 million. City Wide Budget ' ➢ 2011 year -end estimate of $188.8 million is approx. (9.5 %) less than the amended budget of $208.6 million. This savings is primarily due to citywide position vacancies in the operating ' funds and the deferral of some capital projects that will not be completed by year -end. ➢ 2012 preliminary expenditure budget is $187.4 million, is $21.1 million or (10.2 %) less than the 2011 amended budget of $208.6 million. This is primarily due to lack of funding for new t projects. ➢ 2012 projected revenue is approximately $177.8 million or 3.8% less than the 2011 year -end estimate of $184.8 million. The primary revenue decrease is from Federal/ State grants. ' Introduction • Section I - 3 2011 VS. 2012 I EXPENDITURE BUDGET COMPARISON (Traditional Budget Model) I 2011 2011 Amended Year -End Amended 2012 Budget Fund Estimate Budget Budget % Change General $48,421,164 $49,328,886 $48,761,470 (1.2 %) Parks 4,042,476 4,042,938 4,050,111 0.2% I Street &Traffic 5,212,161 5,218,691 5,055,371 (3.1 %) General Government Total $57,675,801 $58,590,515 $57,866,952 (1.2 %) Community Development $4,063,080 $4,144,772 $1,839,530 (55.6 %) I Utilities /Other Operating 60,628,276 61,703,537 59,921,175 (2.9 %) Capital Improvement 42,972,782 53,235,457 36,524,106 (31.4 %) Contingency /Operating Reserves 3,056,386 9,902,608 10,185,982 2.9% I Employee Benefit Reserves 13,918,791 14,381,113 14,333,596 (0.3 %) General Obligation Bonds 3,236,077 3,350,077 3,349,336 (0.0 %) LID Debt Service 285,000 285,000 285,000 0.0% I Water /Sewer Revenue Bonds 2,862,054 2,862,054 2,636,124 (7.9 %) Trust and Agency Funds 148,099 169,129 503,225 197.5% Total - Citywide Budget $188,846,346 $208,624,262 $187,445,026 (10.2 %) (1) The 2012 CED budget includes an estimate of the 2012 grant awards only. The 2011 amended budget includes the 2011 grant awards and awards carried forward from the previous years. The proposed 2012 total city -wide expenditure budget of $187.4 million is balanced within existing I resources and reflects a decrease of (10.2 %) from 2011, despite numerous actual and projected increases in the costs of providing existing services. This was accomplished as a result of significant I budget and service reductions that are included in the Preliminary 2012 budget. The General Government (taxpayer supported) budget consists of three separate Funds: the I General Fund, the Parks Fund and the Streets and Traffic Fund. Over 68% of these tax supported budgets are devoted to public safety services in the 2012 budget; this includes Police, Fire, Courts I and support to these departments from the Technology Services, Finance, Legal, and Human Resources divisions, along with code enforcement, animal control, street lighting, traffic control, and snow and ice removal activities. I Priorities of Government (POG) Budget Model The City Council adopted a budget model / methodology for budget development referred to as the Priorities of Government Model; and as part of this model, Council adopted six Budget Priorities for the City's General Government expenditures, as listed below in priority order: Budget Priorities: I 1. Maintain and Improve Public Health and Safety 2. Efficiently Manage Public Resources and Ensure Fiscal Stability I 3. Promote Economic Development and Diversification 4. Preserve and Enhance Yakima's Quality of Life 5. Provide Responsive Customer Service and Effective Communications I 6. Build and Utilize Strategic Partnerships I 4 - Section I • Introduction I ' The City Manager and Department Heads utilize both the Council's Strategic Priorities and the Budget Priorities as guiding principles upon which programs and services are developed, assessed, ' budgeted and, when necessary, reduced or eliminated. The City's budget is a critical tool utilized by Council and staff to continually move the City closer to the Council's ultimate vision for the City: to create a culturally diverse, economically vibrant, safe and strong Yakima community. For development of the 2011 budget, Council directed staff to allocate the projected 2011 revenues among the six Budget Priorities in the same relative percentage that each held of the total 2010 adopted General Government budget. Additionally, Council authorized staff to utilize a small amount of the projected 2011 year -end cash reserves (about $245,000) for Public Health and Safety's 2011 budget. The use of reserves to help fund critical services within the Public Safety Budget Priority in effect increased this priority's percentage allocation of resources going into 2012. In June, the Council provided staff with direction in regards to the development of the 2012 budget. Council directed staff to prepare the 2012 General Government budget utilizing the POG budget model, without the use of fund reserves, and directed that each of the six Budget Priorities, listed above, be ' allocated the same relative proportion of the projected 2012 revenues as each received last year; modified slightly to take into consideration the Council's budget adjustment authorized during 2011. ' 2012 Budget Allocation The following bar chart graphically reflects the 2012 proposed budget compared to the 2011 ' amended budget (the current authorized expenditure level), for each of the Budget Priority categories. Three out of the six budget priorities were allocated fewer (absolute) dollars in the proposed 2012 budget than they received in their 2011 budgets, to maintain the relative allocation of revenue in accordance to the POG model. > Quality of Life increased slightly because of its small allocation of the revenue increase. > Customer Service and Communications increased due both to maintenance fees for the new Utility Management System (this increase will be offset by additional revenues from the utilities) and election costs related to council elections that are held bi- annually. > Strategic Partnerships increased costs associated with the City / County consolidation of Purchasing (cost increase should be mostly offset by additional revenues from the County). 2011 VS. 2012 GENERAL GOVERNMENT EXPENDITURE COMPARISON BY BUDGET PRIORITY (Numbers in Thousands) Public Health & $39,817 Safety $40,256 Resource 1111.111111111111 $3,426 ' Management $8,601 Economic Mid $2,984 Development =I $3,036 • 2012 Proposed Budget - $57,866,950 ' Quality of Life $4,050 • _ $4,043 ■ 2011 Amended Budget - $58,582,228 Customer Service & $1,983 Communications IN $1,889 Strategic Partnerships $607 II $557 $0 $10,000 $20,000 $30,000 $40,000 $50,000 ' Introduction • Section I — 5 It should be noted that the actual budget and service reductions experienced by the various operating I divisions is much larger than what the previous chart would indicate due to significant increases in the cost of providing existing (2011) service levels. That is, the cost in 2012 of providing the same services I provided in 2011 has increased in many areas — thus, reductions had to be made to maintain the 2011 budget level, in addition to the reductions required to go further to meet the lower 2012 budget level. ' The following chart provides a comparison of the 2011 Adopted Budget (in both dollars and relative percentage each Budget Priority received of the total budget) to the 2012 Preliminary Budget. This demonstrates that the 2012 Preliminary budget as presented is ratably allocated in the same percentage as the 2011 budget. Budget reductions totaling $1.4M were necessary to comply with Council's direction to prepare a budget with no reliance on reserves; these budgeted reductions are included in the Preliminary Budget as presented in this document and are presented as a Policy Issue for Council's consideration. I The Preliminary Budget, based on Council's direction as identified above, was prepared and presented to Council during a Budget Workshop on October 11, 2011. Council stated concerns with I the budget reduction offered in the Police Department that would eliminate six (6) vacant police officer positions. As a result, Council directed staff to provide them with alternate (or Supplemental) budget reductions sufficient to cover the costs necessary to retain the six police I positions (approx. $530,000). The total, by Budget Priority, of these Supplemental budget reduction options is included in the chart below. Note: A complete list of both the budgeted POG reductions and the additional (unbudgeted) Supplemental reductions - and a narrative explanation of each - is included in Section IV, "Balanced Budget Options" behind the "Policy Issues" tab, herein. GENERAL GOVERNMENT BUDGET I 3 YEAR COMPARISON (POG Model Format) 2012 2012 2010 2011 2011 2012 2012 Budgeted Supp. Actual Adopted Amended Proposed Proposed Reductions Reductions Revenue (1) $57,086,960 $57,841,185 Reliance on Reserves 244,726 25,765 Total Resources $57,331,686 $57,866,950 Priority of Government I Public Health & Safety 69.3% $39,431,820 69.0% 68.8% $39,817,433 $1,188,100 $107,600 Resource Management 14.4% 8,251,924 14.7% 14.6% 8,425,527 26,100 428,000 Economic Development 7.1% 4,033,438 6.9% 7.0% 4,050,111 80,100 162,000 ' Quality of Life 5.2% 2,959,582 5.2% 5.2% 2,983,803 50,100 50,000 Customer Service & Comm. 3.0% 1,889,248 3.2% 3.4% 1,983,292 67,300 0 Strategic Partnerships 1.0% 557,389 1.0% 1.0% 606,784 0 0 t Total 100.0% $57,123,401 100.0% 100.0% $57,866,950 $1,411,700 $747,600 Estimated Increase /(Decrease) in Cash ($244,726) ($25,765) Estimated Beginning Cash Balance 5,954,903 5,612,257 I Estimated Ending Cash Balance $5,710,177 $5,586,492 Percent of 2012 Annual Expenditure Budget in Reserve 9.65% I (1) 2011 Year End Estimated Revenue is $57,333,155, a slight positive variance compared to the Adopted Budget. 6 — Section I • Introduction I BUDGET REDUCTION SUMMARY ' BY DEPARTMENT POG Supplemental Department Reductions Reductions" ' Police Fire $612,700 $0 240,000 0 Municipal Court 10,000 0 ' Finance 50,000 62,000 City Management /Legal 72,600 331,600 Community & Economic Development 202,100 204,000 ' Public Works - Street & Traffic 174,200 100,000 Public Works -Parks &Recreation 50,100 50,000 Total $1,411,700 $747,600 ' Grand Total $2,159,300 The following pie chart depicts the Preliminary 2012 budget and related budget allocations to the Council's six Budget Priorities. 2012 GENERAL GOVERNMENT PRELIMINARY BUDGET — TOTAL $57,866,952 (By Budget Priority) ' Public Health & Safety ' $39,817,433 68.8% Resource Management $8,425,527 14.6% Quality of Life $4,050,111 7.0% Economic Development $2,983,803 5.2% Customer Service & Communicaticns $1,983,292 Strategic 3.4% ' Partnerships $606,784 1.0% r Introduction • Section I — 7 I 2012 GENERAL GOVERNMENT PRELIMINARY BUDGET BY DEPARTMENT 2012 % of Forecast Dollars in Millions Total Organizational Unit Budget 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Budget Police $22,581,273 39.0% Fire 9,063,694 MI 15.7% Streets & Traffic Op. 5,055,371 NEM 8 Parks 4,050,111 OM 7 Information Systems 2,370,823 • 4.1% Transfers 2,331,275 r" 4.0% Financial Services 1,421,433 MI 2.5% Utility Services 1,342,080 ® 2.3% Municipal Court* 1,256,178 NJ 2.2% Code Administration 1,219,611 En I ■Personnel I 2.1% Police Pension 1,186,350 Q ONon- Personnel 2.1% Legal 1,127,156 MI 1.9% Engineering 759,589 • 1.3% t Planning 647,063 • 1.1% City Manager 529,576 • 0.9% Purchasing 527,330 • 0.9% , Human Resources 517,627 • 0.9% Indigent Defense 481,000 ❑ 0.8% Records 468,842 El 0 City Hall Maintenance 350,961 Q 0.6% Intergovernmental* 237,395 Q 0.4% City Council 205,214 I 0.4% State Examiner* 106,000 I 0.2% I Hearings Examiner* 31,000 I 0.1% Total $57,866,952 100.0% Fire Pen & Benefits $1,344,057 0 2.3% 1 The 2012 Preliminary Budget broken down by Department, as reflected in the chart above, provides a clear picture of the resource requirements of each functional area within the City and how each I area compares both to each other and to the total General Government budget of the City - in dollars and staffing levels. I > The Police Department consumes 39.0% of the $57.9 million General Government budget; > Fire Department consumes another 15.7 %; ➢ No other single Department utilizes more than 9% of the total General Government budget. The Streets & Traffic Department budget (8.7 %) and the Parks and Recreation Department budget I (7.0 %) come in a distant 3rd and 4th place for the utilization of available resources. This has been the relative utilization of General Government resources for many years, and continues to reflect the Council's resource allocation for the coming year. 111 Refer to Exhibit I for 2012 revenue and expenditure budget information by fund. I I N 8 - Section I • Introduction I PROJECTED ENDING CASH BALANCE (RESERVE) General Government resources consist of annual revenues and cash reserves (fund balances). U Prudent fiscal management dictates that adequate reserves be maintained to help ensure the City is prepared to meet any number of unbudgeted and / or unforeseen circumstances that may arise, without requiring major disruptions to normal business operations. Reserves are typically utilized I for many different business purposes, including: provide for emergencies; cover temporary cash flow needs; take advantage of one -time, unanticipated opportunities; fund unbudgeted policy I issues authorized by Council; provide grant matching funds; cover revenue shortfalls; and accommodate unforeseen expenditures and other contingencies. I 2012 GENERAL GOVERNMENT PROJECTED REVENUES, EXPENDITURES AND CASH BALANCES 2012 2012 2012 2012 I 2012 2012 Exp Estimated Estimated End Bal Projected Proposed as % of Beginning Ending as % of I Revenue Expenditures Difference Rev Balance Balance Exp General Fund $48,736,110 $48,761,470 ($25,360) 0.1% $4,226,072 $4,200,712 8.6% Parks & Recreation 4,049,765 4,050,111 (346) 0.0% 341,093 340,747 8.4% Street & Traffic Fund 5,055,310 5,055,371 (61) 0.0% 1,045,092 1,045,031 20.7% I Total General Government $57,841,185 $57,866,952 ($25,767) 0.0% $5,612,257 $5,586,490 9.7% II In August of 2010, the City Council approved fiscal policies to maintain operating reserves for General Government activities through the strict adherence to two basic guidelines: (1) maintain a I budgeted year -end General Government cash balance between 7% and 11% (i.e.: of no less than 7 %), which is an amount equal to approximately one month's operating expenditures, and (2) during budget development, the allocation of general fund unrestricted cash reserves to balance the I annual budget should be no more than 3.5% of the annual General Government budgeted expenditures. The 2012 General Government preliminary budget is balanced with minimal use of reserves and the ending reserve balance is projected to be 9.7 %. I Cash reserves are an integral and critical component of responsible fiscal management and business g P P g I planning. Standard and Poor's, a national rating agency, included two references to the City's general fund reserves in explaining the City's credit strengths that influenced their most recent (August 2009) reconfirmation of the City's "A +" credit rating. Standard and Poor's stated in their I report that the City has a "track record of very strong general fund balances and good financial policies and practices, including a minimum general fund balance threshold and the use of a financial forecasting model ". I I I I I Introduction • Section I — 9 GENERAL GOVERNMENT FUNDS 1 RESERVES USAGE AND BALANCE COMPARISONS (1) (2) (3) (4) (5) 1 2011 2011 Current 2012 2010 Amended Year -End Preliminary Variance Actual Budget Estimate Budget (4 -2) Beg. Reserve Balance $6,413,707 $4,916,845 $5,954,903 $5,612,257 Revenue 57,461,600 57,131,960 57,333,155 57,841,185 I Total Resources 63,875,307 62,048,805 63,288,058 63,453,442 1,404,637 Expenditure Budget $57,930,336 $58,382,228 $57,675,801 $57,866,950 (515,278) I End. Reserve Balance 5,944,971 3,666,577 5,612,257 5,586,492 I % of Annual Expenditures 10.3% 6.3% 9.7% 9.7% Incr. / (Decr.) in Reserves f/ Prior Year ($468,736) ($1,250,268) ($342,646) ($25,765) % of Expenditure Budge t -0.8% -2.1% -0.6% 0.0% The chart above reflects several key aspects of the City's fiscal condition: Revenues: > The 2011 year -end revenue estimate is less than 2010 actuals; although it is more than I the 2011 Amended budget. > 2012 projected revenues reflect an increase from the 2011 year -end estimate of 0.9 %, and I 1.2% above the 2011 Amended budget. Expenditures: I > The 2011 year -end expenditures are projected to be $0.7 million less than the Amended budget. > The 2012 proposed expenditure budget is $0.2 million more than the 2011 year -end estimate and $0.5 million less than the 2011 authorized expenditure level. With these reductions 2012 budget is balanced with a very minimal use of existing reserves. Reserves: I > A comparison of the 2010 beginning and ending reserve balances reflects a use of reserves of $0.5 million during that year (from approximately $6.4 to $5.9 million). I > 2011 year -end projections indicate a utilization of reserves of approximately $0.3 million during this year, thus using $0.8 million or 12% of the beginning reserves in this 2 -year period. > The 2012 budgeted year -end reserve level is approx. 9.7 %; this is within the reserve guidelines, as noted previously, and the use of reserves to balance the budget is I negligible. I 10 — Section I • Introduction I ' 2011 Budget Summary Even though the City's 2011 General Government revenues are coming in slightly higher than ' originally estimated, escalations in jail and fuel costs exceeded the salary savings experienced from position vacancies, so that the City is projected to utilize reserves by year end. The current level of services is simply not sustainable into the future should revenues continue to fall (or increase at ' rates significantly less than the costs of providing the related services). ' 2012 GENERAL GOVERNMENT BUDGET - HIGHLIGHTS For three years now, staff has been closely monitoring the financial crisis and economic recession ' that has gripped our entire nation, our State and our local economy. Staff has prepared, and updated, 2011 and 2012 revenue projections for the City based on the economic condition of our region. General Government revenues have been flat for the past 4 years (hovering between $57.3 and $57.5 million from 2008 through 2011). Unfortunately, costs of providing the same level of service has increased over these 4 years, causing an erosion of service levels. ' > From 2008 through 2011, 41 positions have been eliminated in order to balance the budget within available resources. ' > The 2012 budget eliminates 12 more positions, for a total of 53 positions which represents about 97,000 fewer hours of work being performed and services provided each year. City management placed significant emphasis on Council's Budget Priorities in their operating decisions and in the administration and development of the 2011 and 2012 budgets. Additionally, cost containment and efficiency improvements continue to be a strong focus and an emphasis in every expenditure decision. ' Taxes Management has included no new taxes in the proposed 2012 Preliminary Budget. ' > Sales Tax - The General Government budget includes revenue projections that reflect no change in sales tax revenues from 2011 to 2012. Unfortunately, the State Department of Revenue recently notified us that the July 2011 sales tax distribution was overstated by 3.8 %. ' In response to this news, staff previously reported that both 2011 and 2012 estimates will likely be reduced by $100,000 each. October sales tax was an improvement over the prior year so this estimate will be reassessed and any change will be reflected in the final budget ' numbers presented during the Budget Wrap -up /Adoption process. > Property Tax - The 2012 budget is based on a 1% increase in the property tax levy, as ' currently allowed by state law, or approximately $163,400, plus a 0.7% or $110,600 increase for new construction for a total increase of $274,000. I I Introduction • Section I -11 Budget Reductions / Personnel Changes 1 Since revenues are "flat ", and the cost of doing business continues to grow, significant budget / service reductions and / or eliminations were necessary in order to balance the 2011 and 2012 budgets within available resources and maintain a minimum reserve level. > The 2012 General Government budget includes approx. $1.3 million in salary and benefit ' reductions; and more than 12 fewer net FTE positions. > The City has a budget freeze on salary and wages (0% increase) for all non -union employees for 2012 and is proposing the same to the labor unions except those represented by Teamsters for Police Management as their contract was settled prior to the request for the wage freeze. The City is in various stages of negotiations with all other bargaining units. I Note: this represents the fourth salary and wage freeze over the past six years (2007, 2010, 2011 and 2012); additionally all non - emergency / 24 hr general government employees I received a wage reduction in 2010 due to mandatory furloughs and the Firefighters agreed to a 3% wage decrease in 2011. Policy Issues Although there are many important and vital needs throughout the various departments of the City, there are few new Policy Issues included in the preliminary 2012 budget as there simply is no funding available to support additional programs, services and the related budget expenditures. 2012 Policy Issues include: > POG and Supplemental Budget Reductions (as discussed above). I > A Wastewater operating rate increase of 5.1% per year over the next 3 years to provide adequate operating resources and debt service for the capital improvement program (a 2011 policy issue being carried forward into 2012). > An increase in Capitol Theatre management fees, to support /maintain the expanded facility. > An increase in Convention Center management fees and promotional expenditures. , > Vehicle replacement, including 9 Police cars, 2 Refuse trucks, a Street Sweeper, and 8 other vehicles. > Transit vehicle replacements (6) and additions to fleet (6) funded by grants and local sales tax. > An addition of 1.5 positions in Refuse to serve additional accounts annexed 7 years ago. The complete list of policy issues - and related information - is included in Section IV and V. CHANGES IN FUNDING AUTHORIZATION ORIZATION The 2011 budget was adopted with a reduction of 10 Full Time Equivalent (FTE) positions. Due to operational changes and limited staffing, 3.5 FTEs were added during 2011 by separate Council actions. The 2012 budget includes the full annualized costs of these positions to arrive at the baseline prior to the application of the required POG budget reductions (refer to chart on next page for more information regarding these staffing changes). 12 — Section I • Introduction 1 2011 MID -YEAR GENERAL GOVERNMENT BUDGET POSITION ADJUSTMENTS I F Base 0 & Fund/Department G Description Chg Pos # Benefits Remarks I 016 - Human RM Human Resources Spec. Add P 1.0 $70,000 Transfer LEOFF 1 pension Resources responsibilities f /City Clerks to Human Resources, new position I funded by savings in LEOFF 1 medical program 018 - Municipal PS Municipal Ct Dept. Asst. Add PPT 0.5 $34,500 Partially funded by elimination of I Court temporary ($22,700) 051- City Hall RM/ Building Maint. Spec. Add P 1.0 $49,200 Funded by elimination of Police Maintenance PS Building Supervisor. Split 50% City I Hall Maintenance, 50% Police 052 -Comm. & RM Comm. &Tech. Office Asst. Add P 1.0 $64,300 Required Support for Shared Technlogy (50 %) Management of IT and PSC I 151 - Public Safety Comm. (50 %) Total Mid -Year Adjustments 3.5 $218,000 I ---- -- ---- ----------- - - - - -- -- i a The following chart summarizes the General Government (i.e. tax- supported) position eliminations identified in the Balanced Budget Policy Issue in Section IV and as presented to Council in October, 2011; these positions are not included in the 2012 Preliminary Budget. There are also personnel changes I in other operating funds included in the budget. 2012 PRELIMINARY GENERAL GOVERNMENT BUDGET I POSITION ADJUSTMENTS PERMANENT POSITIONS P F Base 1 0 or & Fund/Department G Description Chg Pos V # Benefits Remarks 019 - Purchasing SP Buyer Add P 1.0 $64,400 To support additional County I demands. Funded by County Cont. & reduction of temporaries 021- Planning Var. CED Office Administrator Delete P V (1.0) ($71,900) Budget Reduction I 022 -Codes Var. Permit Technician Delete P V (1.0) ($61,200) Codes AdminReorga Administration Budget Reduction 031 -Police PS Police Officers Delete P V (6.0) ($530,000) Budget Reduction I PS Crime & Int. Analyst Sup. Delete P V (1.0) ($115,800) $63,700 General Fund, $52,100 in Police Grants Fund 032 -Fire PS Firefighter Delete P V (1.0) ($80,000) DiscontinuedYVTechprogram. I Revenue reduced by $71,000 131- Parks & QL Parks Admin. Assistant Delete P V (1.0) ($76,500) Budget Reduction - Share 40% of an Recreation Assistant Planner I 141- Streets & PS Traffic Sign Specialist Delete P V (2.0) ($121,700) Budget Reduction Traffic Eng Total General Government (12.0) ($992,700) I P - Permanent PPT - Permanent part -time F - Filled V - Vacant t Introduction • Section I - 2012 PRELIMINARY NON - GENERAL GOVERNMENT BUDGET I POSITION ADJUSTMENTS F Base I or & Fund/Department Description Chg Pos V # Benefits Remarks 124 - Office of Housing Rehab Assistant Delete P V (1.0) ($49,700) Reorganization tied to reduction in Neighborhood Federal funding Development Department Assistant II Add P 1.0 $41,500 Net 0.0 ($8,200) 151 - Public Safety 911 Calltaker Add P 1.0 $57,300 Approved by 911 board Communications 471 - Refuse (See Department Assistant II Add PPT 0.5 $34,400 Volume from Additional Annexation Policy Issues Solid Waste Collector/Drive] Add P 1.0 $61,800 Budgeted 6 months in 2012 - $30,900 473 - Wastewater Department Assistant II Delete PPT V (0.5) ($28,000) Total Other Operating Funds 2.0 $117,300 P — Permanent PPT — Permanent part -time F — Filled V - Vacant Each of these proposals has an identified revenue source or other expenditure reduction to support the additional cost. GENERAL STAFFING - ADJUSTMENTS SUMMARY & COMPARISONS I In the 2012 budget, management continues to accommodate Federal and State unfunded mandates and provides critical public safety and other essential services. In an effort to minimize costs and increase efficiencies, management has decreased and shifted personnel resources in the 2012 budget. General Government: I ➢ Net reduction of 12 FTE's and $1.4 million dollars between the 2011 adopted and the I 2012 proposed budgets. ➢ Since the recession started in late 2008, General Government is operating with 40 fewer FTE's (from 503 in 2008 to 463 by the end of 2012); a reduction of 8 %. I ➢ The per capita number of General Government employees has decreased over the past decade, from 5.9 FTE's in 2001 down to 5.4 FTE's in 2010 — per every 1,000 population. I Note: this comparison is prior to the reductions identified in the 2011 and 2012 budgets. Total City -Wide: Other operations added a net of 2 FTE's, supported by new revenue. I Comparison with other Cities: In order to balance the budget within available resources, the City has made numerous reductions in staffing and related programs over the past several years. These I staff reductions have resulted in favorable cost comparisons with other cities, as reflected below. (The data utilized in the following comparisons was compiled from the State Auditor's Local Government Comparative Statistics for 2009, (2009 data used as 2010 census data was not yet available), and includes I comparisons of all Washington State cities with populations between 45,000 and 125,000.) I 14 — Section I • Introduction I NNW I I Yakima's per capita expenditures on payroll is $542 which $959 $1,000 - is $96 less than the averagedty per capita of $638 $845 $863 $800 - $637 $662 $686 $708 ' $596 $542 $600 - $423 $398 $338 I $400 ; , $200 - i 1 I $0 1 Pasco Kennewick Auburn Yakima Richland Renton Bellingham Kent Kirkland Everett Bellevue Redmond I > Payroll Costs: The City of Yakima had the fourth (4th) lowest average per capita payroll costs out of the twelve comparison cities. I $3,500 Yakima's per capita total expenditures are $1,359, which is $672 $2,992 less than the average city per capita revenue of $2,031 $2,819 $3, W0 ' $2,446 $2,500 - $2,005 $2,021 $2,026 $2,027 $2,031 $2,144 $2,000 - ' $1,500 - $1,251 $1,254 $1,359 $1,000 I $500 _ $0 Pasco Kennewick Yakima Auburn Kent Bellingham Kirkland Renton Everett Bellevue Redmond Richland I > Total Expenditures: The City of Yakima had the third (3rd) lowest average per capita total expenditures out of the twelve comparison cities. I $3,500 - Yakima's per capita total revenue is $1,253, which is $570 $3,000 less than the average city per capita of $1,823 $2,696 $2,776 $2,332 $2,500 - $2,171 $1,841 I $2,000 - $1,561 $1,637 $1,737 $1,776 $1,253 $1,500 - $1,023 $1,075 I $1,000 3 w $500 I $tl Pasco Kennewick Yakima Auburn Kent Bellingham Renton Kirkland Everett Bellevue Richland Redmond I > Total Resources: The City of Yakima also had the third (3rd) lowest average per capita total expenditures out of the twelve comparison cities. I I Introduction • Section I -15 These comparisons demonstrate that the City of Yakima has limited revenue /tax base compared with most cities of its size in the state, and yet provides similar or enhanced services to its citizens. (For example, of the 12 cities included in the comparison, only Everett has a transit system, and there are no 1 other city -owned irrigation systems.) As reflected on the previous pages of this section, management has closely monitored and , maintained a strong fiscal discipline over spending throughout all City departments for years. This has preserved the City's reserve position — and a stable credit rating — during some very difficult times. However, the current national recession combined with the potential reduction of state - shared revenue in light of the projected shortfall in the state's budget — would reduce City resources past the point of its ability to maintain existing services to our citizens. The current service levels are simply not sustainable in the future should revenue growth continue at a rate below inflation. i 1 1 1 1 1 1 1 1 1 1 1 16 — Section I • Introduction I GENERAL GOVERNMENT FUNDS: YEAR IN REVIEW 2011 GENERAL GOVERNMENT ESTIMATED REVENUES AND EXPENDITURES ' General Parks & Rec Street Fund Fund Fund Total ' Actual Beginning Balance $4,480,899 $385,681 $1,088,323 $5,954,903 Estimated Revenue 48,166,337 3,997,888 5,168,930 57,333,155 ' Total Estimated Resources 52,647,236 4,383,569 6,257,253 63,288,058 Less: Estimated Expenditures 48,421,164 4,042,476 5,212,161 57,675,801 Estimated Ending Balance 2011 $4,226,072 $341,093 $1,045,092 $5,612,257 General Government is the term used to describe basic tax supported activities, which are included in three funds: General Fund ' Services provided include police, fire, code enforcement, planning, legal, municipal court, financial services, purchasing, and information systems. ' > 2011 year -end revenue estimate is $48,166,337 — which is slightly less than 2010 actual, and only 1.1% greater than 2009 actual. > 2011 year -end expenditure estimate is $48,421,164 — ($907,722) or (1.9 %) under the ' authorized, amended budget of $49,328,886 due primarily to salary savings from position vacancies. Parks and Recreation Fund Services include Parks programs and maintenance. ' > 2011 year -end revenue estimate is $3,997,888 — ($110,474) or (2.7 %) below the actual levels for 2010, with the primary decrease being in the allocation of Property Tax, which is how the budget reductions were balanced among the three funds. > 2011 year -end expenditure estimate is $4,042,476 — $462 or (0.1 %) under the 2011 amended budget. ' Streets Fund ' Services include Street and Traffic operations and maintenance. > 2011 year -end revenue estimate is $5,168,930 — $203,962 or 4.1% more than actual levels for 2010. This increase is primarily due to property tax reallocation to match expenditures, and the receipt of a traffic safety grant reductions made in the 2010 and 2011 budget. > 2011 year -end expenditure estimate is $5,212,161 — ($6,530) or (0.1 %) under the 2011 t amended budget. The savings from position vacancies were offset by the increase in fuel costs and electricity rates. 1 General Government Funds • Section II —1 The effects of the national economic recession worsened slightly through 2011, although not quite I as much as originally estimated. The 2011 General Government revenue budget was $57,131,960, so the year -end estimate of $57,333,155 is about $200,000 or 0.3% more than budgeted. However, the I 2010 actual revenue for these 3 funds was $57,461,601, so the 2011 estimate is slightly less than the prior year actual. The annual rate of inflation as measured by the CPI -U (All Urban Consumers) is 3.8% in August, 2011 for all cities, and the Seattle index is 2.9 %. This comparison would suggest I that the City is not bringing in enough revenue to cover its increased costs. The major factor keeping 2011 expenditures in line with revenues is several position vacancies, including 3 at the I Department Head level. GENERAL GOVERNMENT COMPARISON I 2011 BUDGET VS. YEAR -END ESTIMATE 2011 2011 Year -End Est. I Amended Year -End as Percent of Fund/Department Budget Estimate Variance Budget Police $22,718,620 $22,283,841 $434,779 98.1% Fire 8,929,340 8,794,947 134,393 98.5% I Technology Services 2,568,136 2,521,528 46,608 98.2% Transfers 2,412,275 2,325,275 87,000 96.4% t Code Administration 1,330,361 1,270,641 59,720 95.5% Police Pension 1,404,590 1,389,650 14,940 98.9% Legal 1,139,157 1,107,397 31,760 97.2% I Financial Services 1,386,046 1,368,211 17,835 98.7% Municipal Court 1,234,194 1,177,814 56,380 95.4% Engineering 757,250 748,588 8,662 98.9% Utility Services 1,305,084 1,295,207 9,877 99.2% I Environmental Planning 678,679 665,608 13,071 98.1% Records 411,556 409,976 1,580 99.6% City Manager 509,913 506,427 3,486 99.3% I Human Resources 447,436 474,066 (26,630) 106.0% City Hall Maintenance 352,127 350,049 2,078 99.4% I Indigent Defense 480,000 480,000 0 100.0% Purchasing 452,835 452,835 0 100.0% Intergovernmental 257,439 257,439 0 100.0% ' City Council 203,061 192,878 10,183 95.0% Nonrecurring Expenses 208,287 208,287 0 100.0% State Examiner 103,000 101,000 2,000 98.1% I Hearing Examiner 39,500 39,500 0 100.0% Total General Fund 49,328,886 48,421,164 907,722 98.2% Parks & Re cre a tion 4,042,938 4,042,476 462 100.0% I Street & Traffic Operations 5,218,691 5,212,161 6,530 99.9% Total General Government $58,590,515 $57,675,801 $914,714 98.4% The preceding table provides a breakdown of the year -end estimate of General Government I budgets for 2011. The largest positive variance (expenditure savings) is in the Police Department and relates to salary savings from several vacancies, including the Chief. I I 2 - Section II • General Government Funds I Currently, only the Human Resources budget is projected to be overspent for 2011. This overage stems primarily from the unexpected retirement of the long -term manager. Because the legal level of control for budget authority is the fund level, and General Fund is estimated to be under spent in total, staff is not proposing budget amendments for this overage at this time. GENERAL FUND ' THREE YEAR COMPARISON 2009 2010 2011 Year -End ' Actual Actual Estimate Beginning Balance $6,798,731 $4,612,886 $4,480,899 ' Revenues 47,615,448 48,388,271 48,166,337 Total Resources 54,414,179 53,001,157 52,647,236 Expenditures 49,801,293 48,520,258 48,421,164 Ending Balance $4,612,886 $4,480,899 $4,226,072 1 1 General Government Funds • Section II — 3 GENERAL GOVERNMENT FUNDS: REVENUE TRENDS The City receives revenue from many different sources; some revenue is available for any government purpose and some revenue is restricted in use to a specific fund(s) and / or a specific purpose. The sources of revenue that are available for use within the General Government Funds (for general purposes or for a restricted purpose within General Fund, Parks or Street Funds) are listed in the following charts, along with a three -year comparison of the amount of revenue received from each source. For 2012, total General Government revenues are budgeted to be $57,841,185; $508,030 or 0.9% more ' than the 2011 year -end estimate of $57,333,155. Total beginning cash reserves are estimated to be $5,612,257, $342,646 or 5.8% less than the 2011 estimate of $5,954,903. This fund balance is about 9.7% of the proposed 2012 budget, well within the minimum guideline. Variances in revenues at this combined level are explained briefly below. A more detailed explanation follows the chart. > Sales Tax - for 2012 is projected to be the same as the 2011 estimate and 2010 actual. It is still slightly below 2006 levels, and is 7.8% below the 2008 high of about $13.7 million. > Property Tax - increased $361,000 or 2.5 %. This includes the levy limit increase of 1 %, plus new construction (about 0.7 %), and a redirection from the Firemen's pension fund in ' response to the anticipated savings from transferring LEOFF 1 medical expense of pensioners over age 65 to Medicare and purchased Medicare supplemental insurance. > Franchise and Utility taxes - increase (2012 over 2011) of $244,000 or 2.1% is largely due to rate adjustments proposed in a few of the major utilities. > Charges for Services - are down by ($106,293) or (1.7 %) primarily because of an estimated downturn in plan checking fees. The Yakima School District projects spiked 2011 by about $100,000 —this higher level is not expected to remain into 2012. Other charges are estimated to remain flat. > State Shared Revenue - is being reduced by ($136,259) or (4.6 %) mainly because the current state budget includes an across -the board reduction of 3.8 %, and a change in the Liquor Board Profit distribution, resulting in the state keeping a higher percentage. ' ➢ Other revenues - are ($20,857) or (3.1 %) below 2011. This is mainly due to the current low rate of return on investment interest, coupled with a lower available balance to invest. > Other Intergovernmental Revenue - is up $126,583 or 13% which is largely due to the increased contribution by the Yakima School District for school resource police officers, and the increased contribution by Yakima County to fund an additional position in the Purchasing division. 4 — Section II • General Government Funds I GENERAL GOVERNMENT RESOURCES THREE YEAR COMPARISON I % of 2012 vs. 2011 2010 2011 Percent 2012 2012 Increase Percent Source Actual Estimate Change Budget Total (Decrease) Change I General Sales Tax $12,653,993 $12,650,000 (0.0 %) $12,650,000 21.9% $0 0.0% Crim. Justice Sales Tax 2,553,893 2,588,000 1.3% 2,575,500 4.5% (12,500) (0.5 %) I Property Tax 14,231,526 14,607,000 2.6% 14,968,000 25.9% 361,000 2.5% Franchise & Utility Taxes 12,035,789 11,742,000 (2.4 %) 11,986,000 20.7% 244,000 2.1% Charges for Services 6,076,139 6,297,948 3.7% 6,191,655 10.7% (106,293) (1.7 %) I State Shared Revenue 2,934,636 2,975,659 1.4% 2,839,400 4.9% (136,259) (4.6 %) Fines and Forfeitures 1,658,467 1,636,344 (1.3 %) 1,645,700 2.8% 9,356 0.6% Other Taxes 1,394,441 1,395,500 0.1% 1,392,000 2.4% (3,500) (0.3 %) I Other Revenue 652,103 677,257 3.9% 656,400 1.1% (20,857) (3.1 %) Transfers from other Funds 1,230,565 1,185,000 (3.7 %) 1,234,000 2.1% 49,000 4.1% I Other Intergovernmental 1,271,580 959,247 (24.6 %) 1,085,830 1.9% 126,583 13.2% Licenses and Permits 768,469 619,200 (19.4 %) 616,700 1.1% (2,500) (0.4 %) Total Re venue $57,461,601 $57,333,155 (0.2 %) $57,841,185 100.0% $508,030 0.9% I Beginning Fund Balance 6,413,707 5,954,903 (7.2 %) 5,612,257 (342,646) (5.8 %) Total Resources $63,875,308 $63,288,058 (0.9 %) $63,453,442 $165,384 0.3% 1 (1) Some Criminal Justice sales tax is allocated to the Law and Justice capital fund (a non - general Governmental fund) for capital needs. I GENERAL GOVERNMENT RESOURCES 2011 YEAR -END ESTIMATE AND 2012 BUDGET FORECAST 1 Sales Tax /Crim. Justice Sales Tax $15,225,500 I Property Tax $14,968,000 EIMEEMBIEFEEEMI Franchise & Util. Taxes $11,986,000 I Charges for Services $6,191,655 State Shared Revenue IFIIIIIIIIIII $2,839,400 I Fines and Forfeitures $1,645,700 2012 vs. 2011 Estimate Increase Total Resources Other Taxes $1,392,000 Amount $165,384 0.... Percent .26% I Other Revenue a $656,400 Transfers from other Funds Ey $1,234,000 • 2012 Budget CI 2011 Y/E Estimate I Other Intergovernmental lEi $1,085,830 Licenses and Permits a $616,700 I Beginning Fund Balance, $5,612,257 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 I I General Government Funds • Section II - 5 In some instances, certain revenues are dedicated for specific purposes (i.e. grant proceeds). , Additionally, certain revenues are generated by operations, so that if the operations are reduced or eliminated, the revenue would also be reduced or eliminated (i.e. Parks recreation program). In the Priorities of Government model, these "dedicated" revenues were identified with appropriate service units to assist in determining any net effect of budget reductions. The following chart summarizes dedicated revenue by priority. ' DEDICATED REVENUES 2012 Dedicated Priority Revenue Public Health & Safety $6,138,622 Resource Management 3,021,977 Economic Development 1,486,910 Quality of Life 1,258,165 Customer Service & Communications 1,519,852 Strategic Partnerships 386,707 Dedicated Revenue $13,812,233 Revenue Projection 57,841,185 Undedicated Re venue $44,028,952 This demonstrates that about 23.9% of General Government revenue is either dedicated to or ' generated by certain operations. 1 GENERAL SALES TAX (SINGLE LARGEST REVENUE SOURCE FOR GENERAL FUND) ➢ 2012 revenue projection is $12,650,000 - the same as 2011. The City was recently notified by the State Department of Revenue that the July 2011 sales tax ' distribution was overstated by 3.8% or $41,000 for this revenue source. With that reduction, we thought the year -end estimate should be reduced by about $100,000. However, the October distribution showed improvement over the same month in the prior year, so the original estimate is being upheld. Of the 8.2% sales and use tax collected within the City, the City of Yakima receives only 0.85% (or about 10.4% of the total) in general Sales Tax revenue. The General Government Funds receive the full amount of the City's share of general sales tax revenues. (Note: the City also receives 0.3% sales ' tax revenues which are restricted for transit purposes and a portion of the 0.4% sales tax revenues which are restricted for criminal justice purposes. The State receives 6.5% and Yakima County receives .15% of the remainder - refer to Section IV for more information.) The following chart identifies Yakima's sales tax revenues as they relate to the total General Fund operating revenues (excluding interfund transfer revenues). This revenue source is very sensitive to economic conditions. As the graph below shows, sales tax receipts have trended downward over the past 10 years as a percentage of total revenue in the General Fund, as other revenue sources ' 6 — Section II • General Government Funds ' such as utility tax have generally kept up with inflation, and the City has been successful in obtaining grants. The decrease in the 2010 actual and 2011 estimate reflects the deceleration in the ' sales tax growth rate, due to economic conditions. PERCENT OF SALES TAX COMPARED TO OPERATING REVENUE GENERAL FUND ' 36% 34% 32% 1 30% 28% ' 26% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 ' Criminal Justice Sales Tax 0.1% Sales Tax - A special 0.1% Criminal Justice Sales Tax was approved by the voters of Yakima County in the November, 1992, General Election and became effective January 1, 1993. The State allocates this 0.1% criminal justice sales tax revenue between the City and the County, based on a ' predefined formula. This revenue is restricted to providing criminal justice related services and is allocated based on operating vs. capital needs. This tax revenue is affected by the same regional economic factors that affect the General Sales Tax revenue. ' This tax is expected to generate $930,000 for the City in 2012 and is allocated in the City's budget forecast as noted in the following chart. ' 0.1% CRIMINAL JUSTICE SALES TAX I 2011 2012 ar -End Budget Fund Actual Estimate Forecast ' General Fund $927,461 $930,000 $930,000 Law and Justice Capital 0 25,000 0 Total $927,461 $955,000 $930,000 ' 0.3% Sales Tax - Another special sales tax of 0.3% dedicated to Criminal Justice expenditures was approved by the Yakima County voters in November, 2004, and took effect on April 1st of 2005. The tax is on sales inside the County only and the proceeds are divided between the County and Cities on a predefined formula under which the County receives 60% and all cities within the County share the remaining 40 %. Anticipated revenue is depicted in the table below. (Note: ' Public Safety Communications and Law and Justice Capital Finds are not part of General Government.) This tax is expected to generate $1,810,000 in 2012, and is allocated in accordance with the following chart. General Government Funds • Section II — 7 0.3% CRIMINAL JUSTICE SALES TAX 2011 2012 2010 Year -End Budget Fund Actual Estimate Forecast General Fund (for Criminal Justice Expenditures) $1,626,432 $1,658,000 $1,645,500 Public safety Communications 138,566 131,500 152,500 Law and Justice Capital 24,173 27,200 12,000 Total $1,789,171 $1,816,700 $1,810,000 ' Exhibit III contains a summary of how these funds have been spent over the past 5 years. PROPERTY TAX ➢ Property tax provides approximately 25.9% of all General Government revenue in the 2012 budget. The 2012 budget is based on a 1% increase in the property tax levy, as currently ' allowed by state law, or approximately $160,000, plus a conservative 0.7% or $114,000 increase for new construction for a total increase of $274,000 for a total of $16,283,000. The 2012 request complies with the levy limit restrictions which cap property tax levy increases to the maximum of 1% or the rate of inflation, whichever is less. (Note: state law defines the rate of ' inflation as measured by the Implicit Price Deflator for consumer goods). State law also allows the City to increase the levy by more than 1% if approved by the majority of voters. As a point of clarification, the property tax levy restriction limits the change in the dollars levied (1% would generate about $160,000 for 2012) — it does not limit growth in assessed value. The 1% limit affects the total dollars levied, while assessed valuation is the mechanism used to allocate the ' levy ratably among the property owners. Since most consumer activity (i.e., wages, equipment, etc.) is more closely tied to the Consumer Price Index (CPI), and CPI is greater than 1% in almost all years, the future effect of 1% or less growth in Property Tax is restrictive to the City since Property Tax is one of General Government's primary revenue sources. The following chart and graph depict the 2012 budgeted allocation of the City's property tax revenues. 1 1 8 — Section II • General Government Funds I 2012 PROPOSED GENERAL PROPERTY TAX LEVY — BY FUND I 2011 2011 Est. 2010 Amended 2011 2012 vs. 2012 I Actual Budget Estimated Budget Budget General $9,190,326 $9,398,000 $9,548,000 $9,934,000 4.0% Parks & Recreation 1,665,500 1,546,000 1,546,000 1,578,000 2.1% fic 3,375,700 3,508,000 3,513,000 3,456, (1.6 %) S -Total General Government 14,231,526 14,452,000 14,607,000 14,968,000 000 2.5% Fire Pension 1,502,765 1,502,765 1,402,000 1,315,000 (6.2 %) Total $15,734,291 $15,954,765 $16,009,000 $16,283,000 1.7% I 2012 PROPOSED GENERAL PROPERTY TAX LEVY — BY FUNCTION I Fire & Police Pension $2,501,350 15.4% I Parks $1,578,000 1 9,7% I General Fund $8,747,650 53.7% I Streets I $3,456,000 21.2% I Note: Property tax is allocated among the General Government funds based on each funds need to balance to available resources. I I I I General Government Funds • Section II — 9 FRANCHISE AND UTILITY TAXES I Franchise and utility taxes are collectively the third largest category of General Government revenues. They comprise 20.7% of 2012 projected General Government revenues and 22.6% of , projected 2012 General Fund Revenues. ➢ 2012 projection is $11,986,000 — $244,000 or 2.1% above the 2011 year -end estimate of ' $11,742,000. These revenues are largely a function of weather conditions and utility rates in the Valley. In 2011, 1 it appears that the lingering recession and conservation education combined to reduce usage, so that this category is now estimated to come in below 2010 actual collections. In response, increases in this revenue category have been conservatively budgeted in 2012. Franchise and utility taxes combined are the only major revenue source keeping pace with the rate of inflation, primarily because of rate increases implemented by utility providers. ' The graphs on the following page depict how the City of Yakima compares to other cities of somewhat similar population relative to (a) sales tax, (b) property tax and (c) utility tax per capita. ' These comparisons show that for all 3 of the major tax sources, Yakima is well below the state average. , I 1 10 — Section II • General Government Funds Comparable Cities between 45,000 and 125,000 in Population (Rounded to the closest dollar) I 2009 PER CAPITA SALES & USE TAXES (1) I $450 - Yakima's per capita sales tax is $234, which is $12 less $400 - than the average city per capita of $246 $354 $359 $367 $350 - ' $300 - $266 $227 $231 $234 $250 - $194 $195 $196 $174 4 $200 - $149 $150 - $100 - 1 $50 ( i s , Pasco Richland Kent Auburn Kennewick Renton Bellingham Yakima Kirkland Redmond Everett Bellevue I 2009 PER CAPITA PROPERTY TAXES (1) $450 Yakima's per capita property tax is $167, which is $87 less $400 . than the average city per capita of $254 $356 $362 I $350 $332 $298 $311 $275 $283 $300 ' $250 $210 $189 I $200 - $148 $167 $150 . $112 I $100 ' r•• Pasco Kennewick Yakima Auburn Bellingham Richland Bellevue Kirkland Kent Everett Renton Redmond 2009 PER CAPITA B & O / UTILITY TAXES 111 $300 - Yakima's per capita B &O / utility tax is $157, whichis I $25 less than the average city per capita of $182 $250 $212 $215 $178 $182 $185 $190 $196 $201 $200 - $157 $157 $158 I $149 $150 - I $100 $50 - ' $0 Everett Yakima Pasco Renton Auburn Kennewick Kent Bellingham Bellevue Richland Redmond Kirkland (1) Data compiled from the State Auditor's Local Government Comparative Statistics. 2009 data used as 2010 I census data was not yet available General Government Funds • Section II —11 CHARGES FOR SERVICES This revenue category consists of revenues from various parks and senior citizen programs, plan checking fees and street and traffic engineering fees, etc. However, the largest component (about I half), are fees paid by other City funds for General Fund services (legal, administration, purchasing, utility billing, etc). ➢ 2012 projection is $6,191,655. This is a 1.7% or $106,293 increase from the 2011 estimate. STATE SHARED REVENUE State shared revenues are the fifth largest category of revenues received for General Government Operations. ' ➢ 2012 projection for all revenues within this category is $2,839,400; a decrease of ($136,259) from the 2011 year -end estimate of $2,975,659. The state has already imposed a 3.8% reduction on this revenue source for 2012. Recent revenue forecasts indicate another shortfall below prior estimates, and the Governor is requesting a special session for budget review. This is an area that may be at risk as the year unfolds. FINES AND FORFEITURES I These revenues come primarily from criminal fines and noncriminal penalties assessed in the City of Yakima's Municipal Court, and parking violations. This revenue category is budgeted to remain flat at $1,645,700 for 2012. OTHER TAXES This category includes Business Licenses, Gambling Taxes and County Road Tax from annexation. The 2012 projection is $1,392,000, down (0.3 %) or ($3,500) - virtually the same as the 2011 year -end ' estimate. OTHER REVENUES The balance of revenues supporting the general government funds consists of transfers from other funds (other financing sources) and miscellaneous revenues. For 2012, $656,400 is expected to be ' generated in this category, a decrease of ($20,857) or (3.1 %) from the 2011 year end estimate of $677,257, since current market conditions have greatly reduced interest earnings. The largest revenue sources in this category include: ➢ Interest income - 2012 projection is $313,000. ' ➢ Operating transfer from other funds - 2012 projection is $1,234,000 and consists primarily of the transfer of 3.5% of City owned utility taxes to the Parks and Recreation fund. ' OTHER INTERGOVERNMENTAL ➢ This category includes revenue received from other Government units other than the per capita distributions from the State of Washington. The 2012 budget of $1,085,830 is up $126,583 or 13.2% from the 2011 estimate largely due to the increased contribution by the ' 12 — Section II • General Government Funds I Yakima School District for school resource police officers, and the increased contribution by Yakima County to fund an additional position in the Purchasing division. I LICENSES AND PERMITS I The 2012 budget is $616,700, (0.4 %) or ($2,500) less than the 2011 year -end estimate of $619,200. The decrease is in response to challenges currently being faced in the building industry in general as a result of contraction in the new home market and turmoil in the credit markets. I REVENUE TRENDS — OVERVIEW Total General Government revenue has remained flat for the past 4 years -2008 actual revenue was $57.4 million, virtually the same as 2010 and 2011. This trend in revenues is reflective of an I economy confronted with high unemployment and low median income, with limited growth in elastic revenues and existing tax limitations. The slight increase anticipated in 2012 is the result of the Property Tax calculation and reallocation, coupled with growth in Utility Taxes. I GENERAL GOVERNMENT RESOURCE COMPARISON - BY FUND GENERAL GOVERNMENT I THREE YEAR RESOURCE COMPARISON 2011 2010 Year -End 2011 2012 2012 Actual Estimated vs. 2010 Budgeted vs. 2011 Resources Resources % Change Resources % Change General Fund $48,388,271 $48,166,337 (0.5 %) $48,736,110 1.2% I General Fund Beg Balance 4,612,886 4,480,899 (2.9 %) 4,226,072 (5.7 %) Total General Fund 53,001,157 52,647,236 (0.7 %) 52,962,182 0.6% I Parks & Recreation 4,108,362 3,997,888 (2.7 %) 4,049,765 1.3% Parks Beg Balance 339,555 385,681 13.6% 341,093 (11.6 %) Total Parks 4,447,917 4,383,569 (1.4 %) 4,390,858 0.2% I Street Sr Traffic Fund Revenue 4,964,968 5,168,930 4.1% 5,055,310 (2.2 %) Street & Traffic Beg Balance 1,461,266 1,088,323 (25.5 %) 1,045,092 (4.0 %) I Total Street & Traffic 6,426,234 6,257,253 (2.6 %) 6,100,402 (2.5 %) Total Revenue 57,461,601 57,333,155 (0.2 %) 57,841,185 0.9% I Total Beg Bal 6,413,707 5,954,903 (7.2 %) 5,612,257 (5.8 %) Total General Government $63,875,308 $63,288,058 (0.9 %) $63,453,442 0.3% I (1) Resources include both annual revenues and beginning fund cash balances. I I I General Government Funds • Section II — 13 GENERAL GOVERNMENT RESOURCES BY MAJOR CATEGORY I 2011 2011 2012 2012 % I 2009 2010 Amended Year -End Forecast Change f/ Actual Actual Budget Estimate Budget 2011 Est. 1 2 3 4 5 4 -5 I General Fund Property Tax $8,057,000 $9,190,326 $9,398,000 $9,548,000 $9,934,000 4.0% Sales Tax 12,623,990 12,653,993 12,333,000 12,650,000 12,650,000 0.0% Criminal Justice Sales Tax 2,521,881 2,553,893 2,507,000 2,588,000 2,575,500 (0.5 %) I Franchise Tax 52,945 44,520 42,000 42,000 42,000 0.0% Utility Tax 12,040,938 11,991,269 11,934,500 11,700,000 11,944,000 2.1% Other Taxes 1,484,163 1,367,030 1,390,000 1,395,000 1,392,000 (0.2 %) I Licenses and Permits 711,835 768,469 765,800 619,200 616,700 (0.4 %) Intergovernmental Revenue 3,073,099 2,813,157 2,441,530 2,483,158 2,532,730 2.0% Charges for Services 4,719,438 4,917,225 5,096,985 5,129,685 5,029,930 (1.9 %) I Fines and Forfeitures 1,631,592 1,658,467 1,721,400 1,636,344 1,645,700 0.6% Miscellaneous Revenue 657,445 338,922 339,450 334,950 333,550 (0.4 %) Other Financing Sources 1,120 0 1,000 0 0 n/a I Capital Lease Financing 0 51,000 0 0 0 n/a Transfers From Other Funds 40,000 40,000 40,000 40,000 40,000 0.0% Total Revenue $47,615,446 $48,388,271 $48,010,665 $48,166,337 $48,736,110 1.2% I Beginning Fund Balance 6,798,731 4,612,886 4,480,899 4,480,899 4,226,072 (5.7 %) Total General Fund $54,414,177 $53,001,157 $52,491,564 $52,647,236 $52,962,182 0.6% Parks & Recreation Fund I Property Tax $1,623,500 $1,665,500 $1,546,000 $1,546,000 $1,578,000 2.1% I nte rgove rnmental Revenue 178,965 139,555 107,700 106,248 92,000 (13.4 %) Charges for Services 898,505 930,907 963,365 952,253 945,965 (0.7 %) I Miscellaneous Revenues 218,863 221,835 183,420 233,387 224,800 (3.7 %) Other Financing Sources 43,098 0 55,000 55,000 55,000 0.0% Transfers From Other Funds 1,133,701 1,150,565 1,179,000 1,105,000 1,154,000 4.4% I Total Revenue $4,096,632 $4,108,362 $4,034,485 $3,997,888 $4,049,765 1.3% Beginning Fund Balance 451,356 339,555 385,681 385,681 341,093 (11.6 %) Total Parks & Recreation Fund $4,547,988 $4,447,917 $4,420,166 $4,383,569 $4,390,858 0.2% Street and Traffic Operations Fund I Property Tax $4,209,000 $3,375,700 $3,508,000 $3,513,000 $3,456,000 (1.6 %) County Road Tax 8,463 27,411 5,000 500 0 (100.0 %) I Fuel Tax Street 1,249,776 1,253,504 1,250,000 1,300,000 1,300,000 0.0% Other Intergovernmental 33,535 0 45,000 45,500 500 (98.9 %) Charges for Services 30,453 228,007 215,760 216,010 215,760 (0.1 %) Miscellaneous Revenue 20,079 27,779 3,050 33,800 23,050 (31.8 %) I Other Financing Sources 2,332 12,567 20,000 20,120 20,000 (0.6 %) Transfers From Other Funds 25,000 40,000 40,000 40,000 40,000 0.0% Total Revenue $5,578,638 $4,964,968 $5,086,810 $5,168,930 $5,055,310 (2.2 %) I Beginning Fund Balance 1,372,651 1,461,266 1,088,323 1,088,323 1,045,092 (4.0 %) Total Street and Traffic Operations Fund $6,951,289 $6,426,234 $6,175,133 $6,257,253 $6,100,402 (2.5 %) Total General Government $65,913,454 $63,875,308 $63,086,863 $63,288,058 $63,453,442 0.3% I Total Revenue $57,290,716 $57,461,601 $57,131,960 $57,333,155 $57,841,185 0.9% Total Beginning Fund Balance 8,622,738 6,413,707 5,954,903 5,954,903 5,612,257 (5.8 %) I Total Resources $65,913,454 $63,875,308 $63,086,863 $63,288,058 $63,453,442 0.3% I 14 - Section II • General Government Funds I I GENERAL GOVERNMENT FUNDS: EXPENDITURE TRENDS Criminal justice costs continue to consume an ever increasing share of total General Fund resources. ' In order to pay these costs other General Fund programs are necessarily limited /reduced to remain within available resources. See Exhibit III for more information. The following charts depict the major effect on the General Fund of the increase in criminal justice costs compared to all other cost increases from 2003 to 2012. PERCENTAGE INCREASE OF CRIMINAL JUSTICE COSTS ' VS. OTHER GENERAL GOVERNMENT FUNCTIONS AND CPI 2002 BUDGET TO 2012 BUDGET 1 Criminal 46 ., f s?`w, ; � « : t � � s � Z5 1 Justice F� „, � . +;„ r I — }' ' 23.4% h Other xn R 4< 23.4/0 ' Consumer Vt-',X,,,1F3,15746 4 25.5% Price Index r Cumulatively, over the past ten years Criminal Justice budgets have increased 46.1 %. B Y p Y g By comparison, all other General Government expenses have increased by only 23.4 %. During this same ten -year period the Seattle- Tacoma Consumer Price Index increased by 25.5 %. Criminal justice cost increases are not quite double what increases are for other cost categories. When the ' increase in population and boundaries are considered over this same time frame, the fact that other services approximate the rate of inflation demonstrates a real reduction in service /costs per capita. CRIMINAL JUSTICE FUNDING With the flattening of revenues, funding available for criminal justice needs is insufficient to offset increases in Criminal Justice costs. (The following chart depicts the growth in Law and Justice operations costs for 2010, 2011 estimate and 2012 budget). Even with the cost savings associated ' with transferring mandated medical costs for LEOFF 1 retirees over the age of 65 to Medicare and related supplemental insurance, this category of expense still increased by $163,000. ' In reviewing the following chart and graph, it should be noted that it includes only General Fund expenditures on criminal justice. Another $1.1 million is budgeted in the "Police Grants" special revenue fund, which includes the 7 officers funded by a federal COPS hiring grant. The Law and ' Justice Capital Fund includes a budget of $0.7 million. Also good to review is the Criminal Justice General Government Funds • Section II — 15 Expenditures as a Percentage of Total General Fund chart below, which demonstrates that over half I of General Fund's budget is dedicated to criminal justice. Note: The large jump in the percentage in 2007 was the result of Council's adoption of the Safe Community Action Plan, which allocated a I one -time gain in the property tax levy as a result of the library annexation of about $650,000 to fund additional Police officers in a dedicated proactive anticrime unit. This ratio keeps spreading as Criminal Justice has received increased allocations of resources to address the gang issues facing I the City. CRIMINAL JUSTICE EXPENDITURES I THREE YEAR COMPARISON % Change I 2010 2011 2012 2012 from Description Actual Estimate Forecast 2011 I Police Operations & Administration $18,887,331 $18,513,093 $18,745,766 1.3% Outside/Inside Jail Costs 3,158,446 3,770,748 3,835,508 1.7% District Court/Municipal Court & Probation 1,206,063 1,177,814 1,256,178 6.7% I Prosecution Costs /Indigent Defense 1,203,834 1,231,145 1,239,680 0.7% Other Related Expenses Police Pension 1,368,431 1,389,650 1,186,350 (14.6 %) I Emergency Dispatch Transfer 425,000 395,000 370,000 (6.3 %) Transfer -Law & Justice Center (1) 164,366 158,000 165,000 4.4% Sub -total 1,957,797 1,942,650 1,721,350 (11.4 %) I Grand Total $26,413,471 $26,635,450 $26,798,482 0.6% (1) Utility Tax transfer from General Fund. I CRIMINAL JUSTICE EXPENDITURES AS A PERCENTAGE OF TOTAL GENERAL FUND 58.0% I 54.0% 41r.r•r.■•r•••■■•. 50.0% ©o_< 46.0% ©t°°" S■•®® J 42.0% I I I I I I 1 i I 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Actual Actual Actual Actual Actual Actual Actual Actual Forecast Budget I —f— Criminal Justice 'd -— All Other I I I I 16 — Section II • General Government Funds I PERCENT OF PER CAPITA TOTAL REVENUE SPENT ON CRIMINAL JUSTICE IN 2009 (1) Comparable Cities between 45,000 and 125,000 in Population I (Rounded to the closest dollar) 30.0% - The percentage of Yakima's total revenue spent on I criminal justice is 21.2%, which is 5.5 % more than the 23.6% 25.0 - 5% 183% 1 85% I Richland RedmondBellingham Bellevue Everett Kent Kirkland Renton Kennewick Pasco Yakima Auburn (1) Data compiled from the State Auditor's Local Government Comparative Statistics. 2009 data used as 2010 I census data was not yet available The following chart depicts General government staffing levels per 1,000 population. I GENERAL GOVERNMENT BUDGETED POSITIONS COMPARISONS (1) FOR THE LAST TEN YEARS I 6.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 I Number of Employees 429.0 447.4 448.9 462.3 471.1 476.7 496.3 502.8 501.6 489.6 Employees Per Capita 5.9 5.7 5.7 5.8 5.8 5.8 5.9 6.0 5.9 5.4 Square Miles 24.1 24.1 24.2 24.2 25.3 25.9 25.9 27.6 28.7 28.7 I Population 73,040 79,120 79,220 79,480 81,470 82,867 83,646 83,731 84,850 91,067 (1) Does not include temporary employees (numbers of employees are stated in full -time equivalents). I I I I General Government Funds • Section II - 17 There are 5 major events that have had significant effect on General Government staffing levels: I ➢ City population has increased 18,027 from 2001 to 2010, or 24.7% I > 2002 through 2004, 36.35 FTE's were added in Police, Fire and Streets to support services to 1 a large newly annexed area. > In 2005, 12.75 FTE's in Police, Courts and legal were added as a result of voter approval of a I 0.3% increase in the sales tax rate for Criminal Justice. > In 2007 9 positions were added in the Police Department as part of the Safe Community Action Plan (SCAP), paid for by the increase in property tax realized when the City annexed I to the Rural Library District, and 4 positions were added because of Public Safety grants. It should be noted that a net of 60.6 new FTE positions have been added since 2001, or 14.1% over the past 10 years; compared to an approximately 25% increase in population during the same time period. Most of these additions were either in response to criminal justice issues, annexations, or I both. This comparison is also prior to the large reductions necessitated by the economic downturn I continuing into 2011 and 2012. In these two budget years, staffing levels have been reduced by another 26.5 positions. This will reduce the ratio to just slightly above 5.0 employees per 1,000 population —the lowest rate in well over a decade. I GENERAL GOVERNMENT EXPENDITURE SUMMARY The following chart illustrates that the total 2012 General Government budget is $57,866,952, ($723,563) or (1.3 %) less than the 2011 amended budget of $58,590,515. I 2011- 2012 GENERAL GOVERNMENT BUDGET 2011 2011 Est. 2012 Change 2012 vs. 2011 I Amended Year -End Projected Preliminary vs. Amended Budget Expenditures Budget Dollars Percent General $49 ,328,886 $48,421,164 $48,761,470 ($567,416) (1.15 %) Parks & Recreation 4,042,938 4,042,476 4,050,111 7,173 0.18% Street & Traffic Operations 5,218,691 5,212,161 5,055,371 (163,320) (3.13 %) I Total General Government $58,590,515 $57,675,801 $57,866,952 ($723,563) (1.23 %) Section IV that follows summarizes the budget reductions being proposed to bring the 2012 General I Government Budget within available resources. 1 I I I 18 — Section II • General Government Funds I I OTHER FUNDS t 2011 ear -end estimates for the City's Other Operating and Enterprise Funds are summarized Y t3' p g p u below: 2011 BUDGET STATUS I 2011 2011 Est. 2011 2011 Amended Actual Estimated Est. Ending I Budget Expenditures Variance Resources Balance Economic Development $669,372 $321,428 $347,944 $547,418 $225,990 Neighborhood Development (Housing) 4,144,772 4,063,080 81,692 4,954,418 891,338 I Community Relations 656,954 655,467 1,487 1,397,109 741,642 Community Services 108,215 82,320 25,895 82,320 0 I Growth Management 26,601 26,601 0 26,601 0 Cemetery 262,463 261,456 1,007 319,316 57,860 Emergency Services 1,121,904 1,121,696 208 1,186,249 64,553 I Public Safety Communications 3,341,497 3,302,790 38,707 3,599,343 296,553 Police Grants 1,341,682 1,275,792 65,890 1,782,940 507,148 Downtown Improvement District 236,451 236,451 0 263,163 26,712 I Trolley (Yakima Interurban Lines) 135,277 99,940 35,337 116,117 16,177 Front Street Business Improvement 5,000 5,000 0 11,153 6,153 Tourist Promotion 1,400,148 1,400,149 (1) 1,563,064 162,915 I Capitol Theatre 285,527 285,527 0 385,054 99,527 PFD Revenue - Convention Center 605,000 605,000 0 810,668 205,668 I Tourist Promotion Area 378,205 378,205 0 378,619 414 53 PFD Revenue Capitol Theatre 468,000 468,000 0 521,357 53,357 Recovery Program Grants 426,989 419,426 7,563 419,426 0 I Storm Water Operating 2,225,207 2,223,899 1,308 2,901,952 678,053 Transit 7,472,066 7,408,235 63,831 8,415,945 1,007,710 Refuse 4,980,373 4,834,165 146,208 5,241,588 407,423 I Wastewater 18,830,904 18,653,200 177,704 20,016,093 1,362,893 Water 7,895,628 7,857,912 37,716 9,478,901 1,620,989 Irrigation 1,541,669 1,541,359 310 1,881,765 340,406 I Equipment Rental 5,633,318 5,566,068 67,250 9,831,748 4,265,680 Environmental 485,934 469,950 15,984 755,021 285,071 I Public Works Administration 1,169,153 1,128,240 40,913 1,534,134 405,894 $65,848,309 $64,691,356 $1,156,953 $78,421,482 $13,730,126 I All Operating and Enterprise Funds are anticipated to end 2011 with positive fund balances. This analysis includes appropriations approved by Council through October. All operating funds are anticipating actual expenditures within authorized levels. I I Other Funds • Section III -1 2012 projections for Other Operating and Enterprise Funds expenditures and resources are reflected I in the following chart. (Resources include the beginning fund balance plus current year revenue, to arrive at a total available to spend.) I PROPOSED 2012 BUDGET 2012 2012 2012 I Projected Projected Projected Fund Resources Expense Balance I Economic Development $452,990 $305,517 $147,473 Neighborhood Development (Housing) 2,692,239 1,839,530 852,709 I Community Relations 1,236,592 613,116 623,476 Cemetery 301,410 265,699 35,711 Emergency Services 1,260,579 1,199,489 61,090 I Public Safety Communications 3,698,896 3,551,694 147,202 Police Grants 1,669,018 1,101,962 567,056 Downtown Improvement District 278,052 235,962 42,090 I Trolley 17,753 11,368 6,385 Front Street Business Improvement Area 9,688 5,000 4,688 I Tourist Promotion 1,606,365 1,447,373 158,992 Capitol Theatre 423,704 346,200 77,504 PFD Revenue - Convention Center 851,418 673,000 178,418 I Tourist Promotion Area 586,414 586,000 414 PFD Revenue - Capitol Theatre 553,857 517,000 36,857 Storm Water Operating 2,713,053 1,942,945 770,108 t Transit 8,310,682 7,697,952 612,730 Refuse 5,394,613 5,117,429 277,184 Wastewater 19,457,455 18,415,827 1,041,628 I Water 9,335,474 7,774,375 1,561,099 Irrigation 1,959,106 1,444,933 514,173 I Equipment Rental 9,698,013 5,290,111 4,407,902 Environmental 435,071 192,950 242,121 Public Works Administration 1,591,225 1,185,273 405,952 I Total Other Operating and Enterprise Funds $74,533,667 $61,760,705 $12,772,962 See Exhibit I for additional detail of Other Operating and Enterprise Funds. I The following chart depicts a summary of resources and expenditures for major operating and I Utility fund operations for 2012, including contingency, operating reserve funds and employee benefit funds. Although Equipment Rental is included on the table above, it is split into an operating component and capital component for charting operating vs. capital budgets. I I I 2 - Section III • Other Funds t IBM 2012 RESTRICTED OPERATING AND RESERVE FUNDS 2012 Forecast Dollar In Millions I Division Budget 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Reserves, Risk Mgmt, Emp Benefits $24,525,078 Cap Theatre, Cemetery, Trust Rsys 30,337,203 I Wastewater 18,415,827 iiiimionm 19,457,455 Sewer Rates, Operating Reserves Water /Irrigation 9,219,308 I Transit 11,294,580 Water Rates, Irrigation Fees, Reserves 7,697,952 imm 8,310,682 Transit sales Tax, Oper Grants, Fare Box I Refuse 5,177,429 5,394,613 = Refuse Rates I • Expenditures Equipment Rental 3,866,111 O Resources I Storm Water 3,885,625 " " Charges 1,942,945 2,713,053 Storm Water Fees I Special Purpose, Housing, Emer Sys 14,574,858 Public Wks Admin, Cable TV, Misc 18,213,057 Charges Grants Taxes Reserves Total Expenditures $85,419,508 I Total Resources $99,606,268 I OPERATING FUNDS For more information on policy issues that affect these funds see the Section V, "Other Policy Issues" I The Economic Development Fund This fund reflects resources of $452,990 and expenditures of $305,517 for 2012. These funds are I planned to be used to spur economic development. Expenditures include an allocation of Community and Economic Development positions and the continuation of Federal legislative funding efforts. I The Community Development Fund (Office of Neighborhood Development Services - ONDS) ' This fund contains programs funded by Housing and Urban Development (HUD), including the Community Development Block Grant (CDBG) and Home ownership (HOME) grants. Expenditures are budgeted at $1,839,530 and are subject to the public hearing process. With the I uncertainty in Budget allocations at the Federal level, the 2012 budget anticipates a 10% reduction from 2011 program grants. Because of the programmatic nature of the Community Development budget, along with differences in reporting time frame for Federal programs, the City budget is I annually adjusted to reflect the final outcome of prior year programs. The 2012 ending balance is projected to be $852,709. I The Community Relations Fund The Community Relations fund expects resources of $1,236,592 for 2012. Expenditures are I estimated to be $613,116, leaving the balance estimated at $623,476 for year -end, earmarked primarily for capital expenditure on production equipment / cable TV facilities. I 1 Other Funds • Section III - 3 Cemetery Fund ' Resources within this fund for 2012 are projected at $301,410. Expenditures are estimated to be $265,699, and the estimated ending balance is projected at $35,711. The Cemetery Fund is ' depending on a $50,000 operational subsidy from the Parks and Recreation Fund. The Emergency Services Fund , Resources in this fund reflect revenues of $1,260,579 and expenditures of $1,199,489 related to the provision of Emergency Medical Services, and are supported by an allocation of the county-wide p g Y PP Y special EMS Property Tax Levy. The current tax levy will expire in 2013; it is now on the ballot to be renewed for another 10 years. The 2012 ending balance is projected to be $61,090. The Public Safety Communications Fund This fund expects resources of $3,698,896 and expenditures of $3,551,694 for 2012, leaving a balance of $147,202 at year -end. This fund accounts for 9 -1 -1 Calltakers, supported by Yakima County 9 -1 -1 resources in the amount of $1,902,000. General Fund expenditures include a transfer of $740,000 for dispatch. Police Grants This fund accounts for the Federal / State forfeited narcotics and the COPS Hiring Recovery Program (CHRP), both of which have stringent reporting requirements. CHRP is a three year program grant with a total grant of $1.5 million and is being used to fund seven new police officers. Resources for 2012 are estimated to be $1,669,018 and expenditures are budgeted at $1,101,962, leaving an ending balance of $567,056. Downtown Yakima Business Improvement District (DYBID) Fund I Resources in this fund are projected to be $278,052, coming primarily from the new Business Improvement District established mid -2008, while expenditures are projected at $235,962. Revenue includes parking fees from downtown lots. The ending balance for 2012 is projected at $42,090. Much of the 2012 budget is targeted toward maintaining the recent downtown revitalization efforts. Note: The current District expired this fall. The 2012 Preliminary Budget was developed assuming , that the effort to re- establish a district was successful. To date this has not occurred. The 2012 budget will remain as there is still interest in establishing a district. If it is ultimately unsuccessful, then expenses would not exceed the availability of funding. The Trolley Fund t This fund projects resources of $17,753 and expenditures of $11,368 for 2012. The year -end balance is projected at $6,385. The Front Street Business Improvement Area Fund This fund projects resources of $9,688 and expenditures of $5,000 - leaving an ending balance of $4,688 for 2012. 4 — Section III • Other Funds , The Tourism Promotion / Yakima Convention Center Fund This fund's budget anticipates resources of $1,606,365 (this includes a transfer of $139,000 from the ' Public Facility District) and expenditures of $1,447,373, and thus is expected to end 2012 with a balance of $158,992. The budget includes policy issues to increase the Center's management fee and marketing effort (See budgeted policy issues). ' The Capitol Theatre Fund This fund is expected to have resources of $423,704 and expenditures of $346,200, leaving an t estimated ending balance of $77,504. The expenditure budget includes a policy issue to increase the Capitol Theatre Committee's management fee (See budgeted policy issues). ' The Public Facilities District — Convention Center Fund This fund includes resources estimated to be $851,418 for 2012. Expenditures are estimated to be ' $673,000. Of this amount $460,000 for debt service on the Convention Center bonds issued in 2002 and $139,000 is for supplemental support of Convention Center operations, while $60,000 is for Convention Center Capital Fund. This leaves a fund balance of $178,418 at the end of 2012. ' The Tourist Promotion Area ' This fund accounts for a self - assessment imposed by the lodging industry to promote tourism. Resources are estimated to be $586,414, with expenditures programmed at $586,000, leaving a balance at the end of 2012 of $414. The Public Facilities District — Capitol Theatre This fund includes resources estimated to be $553,857 for 2012. Expenditures are estimated to be ' $517,000. Of this amount $450,000 is designated for debt service on the Capitol Expansion bond issued in 2011 and $55,000 for supplemental support for Capitol Theatre operations. This leaves a fund balance of $36,857 at the end of 2012. ' Stormwater Operating Fund P g ' Expenditures in this fund are estimated to be $1,942,945 and resources are projected to be $2,713,053 for 2012 (the budget is developed with the annual current rate of $43 per equivalent residential unit). An ending balance of $770,108 is currently projected for 2012. The expenditure budget ' includes reimbursement of the Wastewater Utility for its advanced funding of the Stormwater program, and a $200,000 transfer to the streets fund to support the street sweeping program. ' Transit Fund Expenditures in this fund are estimated to be $7,697,952 and resources are projected to be $8,310,682 for 2012. Total Transit sales taxes for 2012 are forecast to be $4,600,000 with the $4.4 million allocated to operations and $0.2 million to capital. This fund also includes an operating grant of $1,765,000. An ending balance of $612,730 is currently projected for 2012. ' The Refuse Fund The expenditure budget in this fund for 2012 is $5,117,429. Total resources are estimated to be ' $5,394,613, and an ending balance is currently projected at $277,184. The 2012 budget includes upgrade of Department Assistant II to fulltime position and an addition of one Solid Waste Collector/Driver (see budgeted policy issue). Other Funds • Section III — 5 Wastewater Fund ' Resources for this fund in 2012 are expected to total $19,457,455. Expenditures are budgeted at $18,415,827 and the 2012 year -end balance is currently projected to be $1,041,628. Transfers of about $3.1 million to Wastewater Construction funds and $2.6 million to provide for Wastewater Bond redemption and repayments of Public Works Trust Fund Loans are currently programmed in this budget. The proposed 2012 Sewer budget includes continued implementation of the Sewer Comprehensive Plan and the Wastewater Facilities Plan. Revenues are estimated using the proposed rates for 2012 - 2014 (see budgeted policy issue). Water Fund Resources of $9,335,474 are projected for 2012 in this fund. Expenditures are estimated to be $7,774,375 leaving $1,561,099 at the end of 2012. These costs include $600,000 transfer to the Capital Fund, and about $634,445 to provide for Water Bond Debt Service, repayments of Water Public Works Trust Fund Loans. The 2012 projected resources include the rate adjustment of 5.5% that ' was approved by Council in 2008. Irrigation Fund , Resources for 2012 are projected to be $1,959,106 in this fund, and expenditures are estimated to be $1,444,933. The 2012 ending fund balance is projected to be $514,173. The 2012 projected resources include the rate adjustment of 5.5% rate increase (2011 approved policy issue - 5.5% annual rate increase from 2011 to 2014) The Equipment Rental Fund The budget for this fund in 2012 is $5,290,111 of which $3.7 million is the maintenance and operations budget, and $1.6 million is the Equipment Replacement budget. Resources are expected ' to be $9,698,013 while the ending fund balance for 2012 is expected to be $4,407,902, most of which represents capital equipment replacement reserves. The Environmental Fund This fund was created to provide for cleanup of environmental hazards. Funding for the program is from a surcharge on vehicle fuel sales in the Equipment Rental Fund. For 2012, $435,071 in resources is expected to be available and $192,950 is budgeted primarily as a contingency. A year- end balance of $242,121 is projected. , Public Works Administration Fund Expenditures for 2012 are expected to be $1,185,273 for this fund. Resources for 2012 are expected ' to be $1,591,225 generated from operating funds located in the Public Works complex, resulting in a year -end balance of $405,952. RESERVE FUNDS - EMPLOYEE BENEFIT RESERVES The Unemployment Compensation Reserve Fund This self insured fund is estimated to end 2012 with a balance of $180,174. Resources are projected to be $497,387 and expenditures for claims and other related expenses are estimated at $317,213, a 53.9% increase over the 2011 year end estimate of $206,077. Rates are unchanged for 2012. 6 — Section III • Other Funds ' Employees Health Benefit Reserve Fund Expenditures in this fund for 2012 are projected to be $11,217,959, while resources are $13,234,190, ' leaving an ending balance projected to be $2,016,231. The 2012 budget includes a rate adjustment of 15.8% for medical and 8.8% for dental. The insurance board continues to monitor the plan and review potential cost containment measures, with a goal of reducing the magnitude of future annual premium increases. ' The Workers Compensation Reserve Fund This fund is estimating a year -end balance of $876,477, the result of resources totaling $2,238,844 and expenditures of $1,362,367. Ongoing efforts in claim management and safety training are in place to slowdown the number of claims / costs. Rates are unchanged for 2012. Wellness / Employee Assistance Program (EAP) Fund ' Projected total resources for 2012 are $203,483 in this fund, and expenditures are $92,000 with a projected year -end balance of $111,483. ' The Firemen's Relief and Pension Fund This fund is projecting resources of $2,199,858 and expenditures of $1,344,057, leaving an estimated 2012 year -end balance of $855,801. The Fire Pension property tax allocation for 2012 of $1,315,000 is $87,000 lower than the 2011 year- end estimate of $1,402,000 since the City switched to Medicare instead of fully insuring the pensioners. The City is mandated to allocate property tax to fund pension and LEOFF I medical and long -term care requirements. 1 OPERATING RESERVES ' Risk Management Reserve ese rve ' For 2012, based on personnel costs, claims experience and other insurance / professional services costs, on -going expenditures are estimated to be $2,914,055. Risk Management Fund departmental contributions totaling $2,786,000 are programmed from City departments, an increase of 10.0% for ' most operating divisions. The increase helps pay for liability and other insurance coverage and increased claims costs, and to meet reserve requirements. These charges, along with interest earnings of $170,000 combine for projected 2012 revenues of $2,961,000 for normal operations. I In addition to on -going operations, the 2012 revenues and expenditures include $7.0 million for anticipated possible mitigation of contamination from the former City landfill at the sawmill site. At this time, mitigation expenses are anticipated to be reimbursed by corresponding insurance recovery revenue. 1 Therefore, total resources and expenditures of the Risk Management Reserve Fund for 2012 are expected to be $10,825,254 and $9,914,055 respectively. The year -end 2012 reserve balance is ' estimated to be $911,199. These reserve levels are still considered marginal in comparison to the existing liability for incurred claims; however, the combination of reductions in deductible levels and proactive legal overview of land use actions are expected to limit future liability. The reserve balance in this fund will continue to be monitored for adequacy. Other Funds • Section III — 7 General Contingency Reserve Fund The Contingency Reserve Fund is estimated to end 2012 with a balance of $7,750. For 2012, $50,000 is programmed to be transferred from the General Fund to this fund. $200,000 is appropriated for contingency purposes during 2012. Capitol Theatre Reserve t The Capitol Theatre Reserve projects revenues for 2012 of $500. The annual transfer to the Capitol Theatre Operating Fund Reserve of $71,927 is continuing, although interest earnings are at minimum levels because of market conditions and the reduction of the principal balance. The projected 2012 ending balance is $238,911, and will be totally depleted after about 3 years if this program continues at this level. ' General Fund Cash Flow Reserve General Fund cash flow reserves for 2012 are estimated at $4,200,712. This source is a contingency , for unbudgeted policy issues, results of negotiations for unsettled bargaining units, other unknown expenses and potential revenue shortfalls. In summation, the City's 2012 General Reserve position is estimated to be as shown in the following chart. ' 2012 GENERAL RESERVE POSITION 2010 2011 2012 Fund Actual Estimated Projected Contingency Fund $235,364 $157,750 $7,750 General Fund Cash Flow 4,480,899 4,226,072 4,200,712 Capitol Theatre Reserve 381,765 310,338 238,911 Risk Management Reserve 901,099 864,254 911,199 ' Total $5,999,127 $5,558,414 $5,358,572 The economic downturn has put pressure on the general reserves of the City. Because these , reserves are at minimum levels, they will be scrutinized for negative trends and adequacy as the City moves forward. ' Exhibit I contains additional detail of funds categorized as Contingency /Operating and Employee Benefit Reserves. ' CAPITAL IMPROVEMENT FUNDS For 2011, a number of capital improvements were programmed for an amended capital budget of $53.2 million. However, capital improvement expenditures for 2011 were estimated to be $43.0 million, a spending level approximately $10.2 million below budgeted levels. These projects are rebudgeted in 2012 along with additional capital improvements. Examples of the projects being rebudgeted include the Railroad Grade Separation; 64th Avenue Nob Hill to Tieton reconstruction; Automated Meter Reading; Congdon wastewater main; New Secondary Clarifier & Flow Distribution, Biogas Enhancements; Biosolids Improvement; and Irrigation system refurbishment. (See Exhibit I for a summary of the status of the capital funds.) ' 8 — Section III • Other Funds 1 The following describes the relationship of resources and expenditures for major capital budgets of the City, including debt service and the capital portion of the Equipment Rental Fund. ' 2012 RESTRICTED CAPITAL AND DEBT SERVICE FUNDS ' Division 2012 Forecast Dollars in Millions Budget 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Streets $12,681,217 14,066,311 : tre4ra .- i rtat ftx 4, ; aca Wastewater 13,755,870 EMEEMBEE6==== 21,280,137 I Water/Irrigation 9,440,808 14,053,088 ' Transit 1,393,000 5,812,388 Reserves, Taxes ' Equipment Rental 1,424,000 • Total Expenditures 1,771,134 Reserves, Charges p Total Resources Storm Water 433,000 ' 697 , 335 001 Reserves, Charges Sp Purp Cap, Misc G.O. Debt 5,090,672 ' 6,576,432 Reserves, Grants, Taxes, Loans Total Expenditures $44,218,567 Total Resources $64,256,825 For 2012, Capital Fund expenditures of $36,524,106 are estimated as follows, inclusive of carryover projects from 2011. ' Street / Other Infrastructure Improvement Projects ' Total projects of $12.0 million (including carryover projects and Debt Service). > 64th Avenue , Nob Hill to Tieton Street Improvement (carryover, Federal grant) — $950,000 t ➢ Railroad grade separation — $8,917,000 (State and Federal grants; Public Works Trust Fund loan) > Debt Service — $1,272,857 ' > Other miscellaneous projects — $860,143. These projects include: > Project contingency (for project over runs or emergency repairs) - $105,000 I > W. O. Douglas Bridge Restoration - $100,000 • > Power House W.O.D. Trail - $200,000 ' Arterial Street Gas tax and the Real Estate Excise Taxes are the primary local revenue sources for street projects. These revenues are used to match state and federal grants when possible to maximize funding for projects. 1 Other Funds • Section III — 9 Irrigation Improvement Fund Total 2012 projects - $3,475,000 including Debt Service - $640,554. ➢ Fruitvale Canal Diversion System - $1,800,000 ➢ General irrigation system refurbishment Phase IV - $1,200,000 ➢ Other irrigation system improvements - $475,000 Domestic Water Improvement Fund Total 2012 projects - $4,450,000. ➢ Design Water Treatment Lagoons - $2,000,000 (funded by Public Works Trust Fund Loan) ➢ 2012 Water main replacement - $150,000 ➢ Automated Meter Reading System (carry over plus additional project cost / shared with Wastewater, partly funded by Public Works Trust Loan) - $2,000,000 ➢ Other water capital projects - $300,000 ' Fire Capital Fund Total 2012 projects - $196,459, including lease payments - $69,959). ➢ Miscellaneous equipment and supplies - $126,500 Wastewater Capital Expenditures ' Facility projects and other sewer improvements, including sewer line extension rehabilitation and other costs, total $11,995,000. , ➢ Congdon sewer main (carry over) - $750,000 ➢ Wastewater System Evaluation - $300,000 ➢ Automated Meter Reading System (shared with Water) - $1,000,000 ➢ Speedway / Race Street Interceptor (additional project cost) - $700,000 ➢ Toscana Development Castlevale/Fechter - $300,000 ➢ National Pollutant Discharge Elimination System (NPDES) and Total Maximum Daily Load (TMDL) Issues - $1,000,0000 ➢ Industrial Waste Anaerobic (carry over) - $2,000,000 ➢ Biogas Enhancements (carry over) - $3,000,000 ➢ Biosolids Improvements (carry over) - $1,500,000 ➢ Biosolids Screen Project - $425,000 ➢ Other Wastewater miscellaneous capital needs (including a $600,000 contingency) - $1,020,000 ' Stormwater Capital Fund Total 2012 budget - $433,000: , ➢ Contingency for Capital Facilities projects- $208,000 ➢ Fair Avenue / Nob Hill drainage improvement (carry over)- $130,000 ➢ J Street Low Impact Development (LID) - $15,000 (state grant - joint project with Yakima County) ➢ Underground Injection Control (UIC) Retrofit project (carry over) - $80,000 (state grant) Transit Capital ' 10 — Section III • Other Funds The 2012 budget of $1,393,000 is for miscellaneous capital needs and vehicle replacement. ' > Westside Transit Center (land) - $400,000 > Replace Dial -a -ride vehicles - $318,000 > Vanpool Vans/Trucks/Bus - $480,000 ' > Other capital needs - $195,000 Parks Improvements Projects The 2012 budget of $80,000 is for miscellaneous capital needs. Yakima Revenue Development Area The 2012 budget of $850,000 is for the Yakima Sawmill Redevelopment Area project. Other Capital Projects / Transfers ' > City Hall rehabilitation / refurbishment / contingency - $50,000 for continued refurbishment projects. (REET 1) ' > Law and Justice Capital fund - $732,134 for the Police Station / Legal Center related equipment and projects including: ' o Vehicle replacement - $270,000 o Technology and Equipment to enhance crime reduction - $196,586 (Federal grant) o Safety and communication equipment for mobile units - $47,000 ' 0 Other miscellaneous projects and equipment - $218,548 > Convention Center Capital Improvements - $150,000 is programmed for ongoing capital needs of the Center for 2012. ' > CBD Capital Improvement - $132,264 for maintenance contract and other services. LID Construction There are no local improvement district projects budgeted in 2012. ' Capital Improvement Fund Summary Overall, Capital Fund expenditures in the 2012 Budget Forecast of $36.5 million are $16.7 million or 31.4% less than the 2011 Amended budget of $53.2 million. Many areas are in the midst of capital ' programs such as the utilities and streets (including the railroad grade separation, which is under construction in 2011). In some instances, the "next" phase as included in the 2012 budget is more than 2011, such as automated meter reading and grant funded transit bus purchases. In other instances, the ongoing budgets are less than 2011, such as the Douglas Trail (6th Ave & Naches), 16th & Washington Avenue construction and the new well project. ' Ongoing pressures on revenues available for General Government Capital funds have pushed spending down in Parks, Fire and Law & Justice. The Fire Department has requested an ongoing ' source of funding for apparatus replacement. Ongoing resources for capital needs have been diminishing, and this topic will likely remain in the forefront of future budget discussions. ' All of these changes net to an overall decrease in the capital fund expenditures for this budget cycle. 1 Other Funds • Section III —11 GRANTS The City has been successful in obtaining grants for many different purposes. The following table identifies all of the grants / interlocal revenues budgeted to be received in 2012. Citywide, grants ' add to over $37 million, which is more than 20% of total revenues. This grant summary is included in the Capital Improvement section because Capital grants make t up almost 60% of the total grants awarded. Coincidentally, grants make up about 60% of revenue in the Capital Improvement funds. 1 1 I 1 12 — Section III • Other Funds ' I 2012 GRANTS (Federal, State & Interlocal Subsidies) I Amount Department Description of Grant Federal /State Capital Grants I Police Grants ARRA, BYRNE, JAG Disparate Grant $43,227 Police Grants JAG Grant 63,200 I Law & Justice Capital JAG Grant 53,548 Law &Justice Capital IPSS COPS Grant 195,546 Arterial Streets Fair Ave /Nob Hill Intersection Rebuild 43,175 I Arterial Streets Powerhouse WOD Trail 200,000 Arterial Streets WO Douglas Bridge Restorations 100,000 Arterial Streets 64th Ave. - Nob Hill to Tie ton 770,000 I Cum Res for Capital Improvement TIB Railroad Grade Separation 3,000,000 Cum Res for Capital Improvement Federal Highway Admin RR Grade 1,067,166 Cum Res for Capital Improvement Railroad Grade Separation 2,000,000 I Transit Capital Pass Shelters 120,000 Transit Capital Dial-A-Ride Vehicles 240,000 Transit Capital Vanpool Vans 300,000 I Stormwater Capital Ecology Municipal Stormwater Capacity 94,794 Total Federal/State Capital Grants $8,290,656 I Federal/State Operating Grants - General Government Police St Criminal Alien Assistance Program Grant $20,000 Police Traffic Safety Commission 40,000 I Police State Patrol Fire Training 3,000 Police OPD Public Defense Grant 150,000 Police ARRA - COPS grant 588,777 I Planning Shoreline Master Program 20,000 Parks and Recreation Senior Center Foot care 30,200 Parks and Recreation State Day Care CFDA 93.044 10,000 I Parks and Recreation State Transportation CFDA 93.043 500 Parks and Recreation ALTC Reimbursement SCSA State Res 30,900 Municipal Court Judicial Salary Contribution 45,000 I General Fund Property Taxes 6,760 Total Federal/State Operating Grants - General Government $945,137 I Federal/State Operating Grants - Other Funds Community Development Community Development Block Grant $965,854 I Community Development HUD HOME Program 537,347 Transit UMTA Current Year per Grant 1,765,000 Transit CMAQ DOT Sunday Service 42,385 I Transit Commute Trip Pass Thru WSDOT 10,000 Transit JARC Pass-thru WSDOT 29,087 Emergency Services Department of Health - Pre - hospital Grant 1,726 I Refuse Tire Clean-up 6,690 Total Federal/State Operating Grants Other Funds $3,358,089 I I Other Funds • Section III -13 2012 GRANTS I (Federal, State & Interlocal Subsidies) Amount I Department Description of Grant Federal Entitlements PFD Capitol Theatre Capitol Theatre - Build America Bond Subsidy $108,896 I State Shared Revenue Police Criminal Justice - High Crime $290,000 111 Police Criminal Justice - Violent 85,000 Police Criminal Justice - Special programs 50,000 Police MVET DUI Payment 15,500 I 1 General Fund Liquor Excise Tax 463,000 General Fund Liquor Board Profits 570,000 Economic Development City Assistance 52,000 I Parks and Recreation Criminal Justice - Special Programs 20,400 Streets Gas Tax 1,300,000 Arterial Streets Arterial Street Gas Tax 606,000 I Firemen Relief & Pension Fire Insurance Premium Tax 72,000 Total State Shared Revenue $3,523,900 Intergovernmental Contract / Services I Police Police - Fairgrounds $10,000 Police Resource Officers 419,898 I Police Yakima Housing Auth Law Enforcement Svcs 20,000 Police Union Gap Jail Contract 20,000 Fire Fire - EMS District #10 34,500 I Fire Fire Investigator Services 1,000 Fire Fire Training Services 5,000 Traffic Engineering Engineering Services 500 I Purchasing Purchasing Services 298,572 Emergency Services EMS Levy 1,194,000 Public Safety Communications Fire District #10 24,000 1 Public Safety Communications 911 Service Contracts 1,902,000 Public Safety Communications Fire Dispatch Services 208,054 Public Safety Communications Information Technical Services 43,800 Public Safety Communications Police Dispatching Service 127,737 Public Safety Communications ET Maintenance - Contract 7,526 Public Facilities District Public Facilities District Revenue 645,000 I PFD - Capitol Theatre Public Facilities District Capitol Theatre 500,000 YAKCORPS IPPS Assessment 526,756 Transit Selah Transit Bus 200,000 I Transit Selah Transit Dial -a -Ride 60,000 Total Intergovernmental Contract / Services $6,248,343 Total 2012 Grants and Other Subsidies $22,475,021 I I 14 — Section III • Other Funds I `;` �r -a`' 1■ ; OFFICE OF THE CITY MANAGER • . \ j ! 129 North Second Street �c , ' City Hal, Yakima, Washington 98901 Phone (509) 575 -6040 ' MEMO TO: Honorable Mayor and Members of the Yakima City Council ' FROM: Don Cooper, City Manager DATE: October 24, 2011 SUBJECT: Proposed 2012 Budget reductions At the October 11, 2011 Council budget workshop, Council directed staff to research available ' options to fund six additional police officers in the 2012 budget. The annual cost for those six positions will be $530,000 /per annum (adjusted pursuant to union contracts). As indicated, the ' additional expense for those officers will have to be funded through reductions in service, layoffs or elimination of vacant positions in other departments, or the addition of new revenues. ' The following reductions could potentially be used to fund the six positions in the Police Department or a portion of them; however, they will have significant impacts on the services provided by the divisions impacted. ' 1. Legal: Reduce one and one -half administrative positions through layoffs (savings $80,000). ' 2. Finance: Reduce one position through layoff (savings $62,000). 3. Human Resources: Do not replace one position upon retirement (savings $58,000). ' 4. Community & Economic Development: Eliminate the fire inspector position through layoff (savings $67,000). Eliminate construction inspector position (layoff) requiring private contractors to purchase inspections from private contractors (savings $74,000). Eliminate Community Development Specialist upon retirement (savings $28,000). ' Demote Supervising Planner to Senior Planner (savings $33,000). 5. Streets and Traffic: Reduce vehicle replacement contribution (savings $100,000). ' 6. Parks: Reduce parks department budget by 1 % (savings $50,000). Balanced Budget Options • Section IV —1 7. City Manager's Office: Reduce staff by half through layoffs. Management focus will be on maintenance or a status quo organization, thereby requiring less management oversight. This will require reorganization to insure proper span of control. The Council will have to ' understand that the organization's focus will be maintenance and to maintain existing service levels (savings $200,000). If all of the proposed cuts were implemented the total savings would be $757,000. That would be sufficient to fill the six vacant positions in the police department and the fire fighter position that was slated to be eliminated. However, it would come at the cost of reduced services in those I departments listed some of which will not be able to absorb further cuts without compromising their mission. These proposed reductions provide a means to fund those positions in the 2012 budget year; however, they do not provide a long -term solution. Potential Revenue increases: 1. Require the planning department to charge the actual cost of providing services. This 1 will require a 300% increase in most fees charged for services. Additional revenue: $165,000. 2. Apply the "in -lieu utility tax" fee to the storm -water fund equal to that charged to other ' enterprise funds (between 9 % -14 %). Additional revenue: $180,000 240,000. 3. Use of reserves: As of October 11, 2011, reserve levels were at 9.6% with the minimum level set at 7 %. I do not recommend utilizing reserves to address this issue due to the unknowns at this time (outcome of labor negotiations and possible loss of revenues at the state and federal levels). In addition, this would be using one -time revenues for ongoing expenses; it would simply postpone the problem for one year while not improving sustainability. ' Conclusion: Sustainability is the issue the City Council needs to address in 2012 at the latest. Doing things the same old way will no longer work. Revenues are not climbing as fast as expenditures and you have little control over your largest cost center (labor) except to reduce the overall number of employees. This would require you to reduce levels of service to unacceptable levels especially in public safety (which according to the POG model absorbs 70% of reductions). We are looking at difficult budgets in the coming years just to maintain the status quo for services with little or no capital improvements or equipment upgrades and /or replacement. A radical change in the services provided, especially by the General Fund, is needed if the economy does not improve substantially. In 2012, the Council should have that dialogue with the community and ' determine what the community is willing to pay for and wants, what services should be consolidated, privatized, or discontinued. The "do it as we have always done It approach will not be viable for 2013 and beyond especially if we are forced through interest- arbitration to pay higher personnel costs. 2 - Section IV • Balanced Budget Options I The restructuring of the General Fund and the services it provides will be necessary in order to avoid a continuous reduction in services due to a declining or stagnant economy and the potential impacts of collective bargaining agreements. This decline of services will lead to additional legal liability as well as morale problems with the staff and increased dissatisfaction by the community with the services being provided, especially if they are of low quality as a result of cutbacks. There ' needs to be a community -wide discussion concerning the core services to be provided and at what levels prior to going into the 2013 budgeting process to insure sustainability on a long -term basis. This will be the most important, as well as difficult, issue that should be addressed by the Council in the next budget year. 1 I I I I 1 I I I ' Balanced Budget Options • Section IV — 3 PRIORITY OF GOVERNMENT - BUDGET OPTIONS I I 2012 BUDGET OPTIONS - SUMMARY A. Budget /Service Reduction Options • POG Reductions - Supplementary Reductions - I Priority of Government Personnel Non -Pers Total Personnel Non -Pers Total Totals Public Health & Safety Police $593,700 $19,000 $612,700 $0 $0 $0 $612,700 I Fire 240,000 0 240,000 0 0 0 240,000 Municipal Court 10,000 0 10,000 0 0 0 10,000 Finance 0 50,000 50,000 0 0 0 50,000 City Manager / Legal 0 0 0 40,000 0 40,000 40,000 Community & Economic Dev 129,800 1,400 131,200 67,600 0 67,600 198,800 Street & Traffic Operations 121,700 22,500 144,200 0 0 0 144,200 1,095,200 92,900 1,188,100 107,600 0 107,600 1,295,700 Resource Management Finance 0 0 0 62,000 0 62,000 62,000 City Manager / Legal 0 5,300 5,300 291,600 0 291,600 296,900 Community & Economic Dev 20,800 0 20,800 74,400 0 74,400 95,200 Street & Traffic Operations 0 0 0 0 0 0 0 20,800 5,300 26,100 428,000 0 428,000 454,100 Economic Development Community & Economic Dev 50,100 0 50,100 62,000 0 62,000 112,100 Street & Traffic Operations 0 30,000 30,000 0 100,000 100,000 130,000 50,100 30,000 80,100 62,000 100,000 162,000 242,100 I Quality of Life Parks 50,100 0 50,100 35,500 14,500 50,000 100,100 Customer Service /Communications City Manager / Legal 67,300 0 67,300 0 0 0 67,300 Strategic Partnerships 0 0 0 0 0 0 0 I Grand Total $1,283,500 $128,200 $1,411,700 $633,100 $114,500 $747,600 $2,159,300 B. Use of Reserves (Fund Balance) Option Fund Balance (based on POG model) $5,586,000 (9.65 %) Less reduction in sales tax estimate 100,000 Difference 5,486,000 I Minimum Reserve Balance (per Council direction) 4,051,000 (7.00 %) Available for Council $1,435,000 1 4 - Section IV • Balanced Budget Options I I C. Tax Revenue Increases Utility Tax Increase (each 1 %) $336,000 I 14% Stormwater In -Lieu Tax (each 1% approx. $20,000) $280,000 Fee Increase — Planning Varies( Fire Code Inspections (if kept in house) $66,154( I See u (1) ee S pplemental Information (narratives) at the end of this section. (2) Based on 3,007 inspections in 2010 at $22 per inspection. The POG budget reductions shown in option A, and in more detail on the next 2 pages, reflect the I 2012 Budget as presented to Council at the 10/11/11 Budget workshop; and is based on Council's direction to prepare a budget based on the allocation of the projected 2012 revenues as currently established in the POG model and without utilizing General Government reserves (fund balance). I The supplemental options were requested by Council as a possible budget/service reduction pP p q Y P g alternative to the elimination of the 6 vacant police officer positions. I 1 I I I I I I I 1 I I Balanced Budget Options • Section IV — 5 I CITY OF Y ima 2012 BUDGET REDUCTION OPTIONS 2012 BUDGET OPTIONS - POG REDUCTIONS POG Reductions I Priority of Government Personnel FT E's Non -Pers Total Public Health & Safety I Police 6 (vacant) Patrol Officers $530,000 6.00 $0 $530,000 Close Airport Substation 0 19,000 19,000 1 (vacant) Crime /Int Analyst 63,700 1.00 0 63,700 Fire Transfer 1 Position - EMS Fund 80,000 0 80,000 1 (vacant) Firefighter - YVTech Program Elimination 80,000 1.00 0 80,000 I Overtime Adjustment 80,000 0 80,000 Municipal Court Eliminate Overtime for Courtroom Security 10,000 0 10,000 Finance & Technology Reduce 099 Transfer (for Dispatch) 0 50,000 50,000 Community & Economic Development - Code Admin. Transfer .70 Code Inspector to Stormwater 50,000 0 50,000 Eliminate Contribution to Vehicle Replacement 0 1,400 1,400 1 (vacant) CED Office Administrator (split allocation) 18,600 1.00 0 18,600 1 (vacant) Permit Technician 61,200 1.00 0 61,200 I Street & Traffic Operations Reduce Operating Supplies /Signals 0 5,000 5,000 Reduce Contract Labor /Signals 0 2,500 2,500 I 2 (vacant) Sign Specialists 121,700 2.00 0 121,700 Reduce Professional Services - Traffic Studies 0 15,000 15,000 1,095,200 12.00 92,900 1,188,100 I Resource Management City Management - Human Resources Reduce Misc. Operating Costs - Human Resources 0 5,300 5,300 Community & Economic Development I Engineering allocation CED Office Admin. (see Pub. Saf.) 12,200 0 12,200 City Hall allocation CED Office Admin. (see Pub. Saf.) 8,600 0 8,600 20,800 0.00 5,300 26,100 I Economic Development Community & Economic Development - Planning Transfer .40 Asst. Planner - Parks 26,400 0 26,400 Planning allocation CED Office Admin. (see Pub. Saf.) 23,700 0 23,700 Street & Traffic Operations Reduce Operating Supplies (Street Maintenance) 0 29,000 29,000 Reduce Prof. Services (Large Trees) 0 500 500 I Reduce Small Tools 0 500 500 50,100 0.00 30,000 80,100 Quality of Life I Parks 1 (vacant) Admin Assoc/Move Planning Assoc. (net) 50,100 1.00 0 50,100 Customer Service /Communications I City Management - City Clerk Reduce Public Records Clerk -10 Months 67,300 0.00 0 67,300 Grand Total $1,283,500 13.00 $128,200 $1,411,700 I 6 - Section IV • Balanced Budget Options I 1 CITY OF Y2 I 2012 BUDGET REDUCTION OPTIONS 2012 BUDGET OPTIONS - SUPPLEMENTAL REDUCTIONS I - Supplementary Reductions - Priority of Government Personnel FTE's Non -Pers Total I Public Health & Safety Community & Economic Development 1 (filled) Fire Code Inspector $67,600 1.00 F $0 $67,600 City Manager / Legal I 1 (filled) Legal Assistant (split allocation) 31,500 1.00 F 0 31,500 Temp. Legal Assistant (split allocation) 8,500 0 8,500 107,600 2.00 0 107,600 I Resource Management Finance 1 (filled) Financial Services Tech 62,000 1.00 F 0 62,000 I City Management Asst. City Mgr/Reinstate CED Director (vacant) 118,500 1.00 V 0 118,500 1 (filled) Executive Assistant - City Manager 84,300 1.00 F 0 84,300 I 1 (vacant) Specialist - Human Resources 58,200 1.00 V 0 58,200 Legal Assistant (split allocation) 31,500 0 31,500 Temp. Legal Assistant (split allocation) 8,500 0 8,500 Community & Economic Development I 1 (filled) Construction Inspector 74,400 1.00 F 0 74,400 437,400 6.00 0 437,400 Economic Development . 1 Community & Economic Development - Planning 1 (vacant) Comm. Development Specialist 28,400 1.00 V 0 28,400 Modify Sup. Planner - Sr. Planner 33,600 0 33,600 I Street & Traffic Operations Reduce Vehicle Replacement 0 100,000 100,000 62,000 1.00 100,000 162,000 I Quality of Life Parks Reduce Tree Maintenance 0 7,500 7,500 Reduce Small Tools Replacement 0 1,000 1,000 I Reduce Maintenance Temporaries 8,000 0 8,000 Reduce Fertilization 0 3,000 3,000 Reduce Overtime for Maintenance 2,000 0 2,000 1 Reduce Afterschool Program 6,000 1,000 7,000 Reduce Parks Movies 500 1,000 1,500 Reduce Summer Playground Program 5,000 1,000 6,000 I Reduce Overtime for FPGC 2,000 0 2,000 Reduce Franklin Pool Temporaries 5,500 0 5,500 Reduce Ball Field Maintenance 6,500 0 6,500 35,500 1.00 14,500 50,000 I Grand Total $642,500 10.00 $114,500 $757,000 I I I Balanced Budget Options • Section IV - 7 CITY OF /!L 2012 BUDGET REDUCTION OPTIONS - EXPLANATORY MEMORANDUM POLICE Date: October 19, 2011 To: Honorable Mayor and Members of Yakima City Council Don Cooper, City Manager From: Captain Greg Copeland RE: 2012 Priorities of Government Reductions for Police Among the possibilities for the 2012 budget is that the Yakima PD will not be allowed to hire individuals to fill our current six (6) officer vacancies. The consequence of this is that our Pro -Act Team will be disbanded and its members re- assigned to Patrol duties, so that we can maintain adequate staffing in our Patrol Division. This would also drop us to below 1.5 officers per I thousand, the lowest level since we began keeping track of this ratio in the early 1980's. The loss of the Crime Analyst position will reduce our ability to analyze crime and plan for the t most efficient mobilization of our resources. III I 1 I 1 1 1 8 — Section IV • Balanced Budget Options ' CITY OF Yr-LW ' 2012 BUDGET REDUCTION OPTIONS - EXPLANATORY MEMORANDUM FIRE I Date: October 19, 2011 To: Honorable Mayor and Members of Yakima City Council Don Cooper, City Manager From: David Willson, Fire Chief RE: 2012 Priorities of Government Reductions for Fire ' 2012 Fire Department Budget Reduction of $240,000 • $80,000 reduction of one vacant F.F. position • $50,000 reduction by moving one F.F. from the 032 budget to the 150 EMS budget for 1/2 year. (The EMS budget will show a revenue increase in 2012 to allow this) • Reduce operational overtime by $110,000 The reduction of overtime means that we will no longer use overtime to fill manning shortfalls g g ' during shifts. Overtime will only be used for call back on large fires. The consequences will be a reduction of apparatus in service on certain days when we have multiple people on sick leave and vacation. This will mean that on approximately 70 days of the year the city will have no fire ' service coverage during multi company incidents. We have a multi company incident every 68 hours on average. During these days of short manning, we will not send fighters in ambulances to assist private ambulances with advanced life calls. The reduction of one FTE firefighter will have the consequence of reducing the number of employees per 1000 population. Washington Survey and Rating gave Yakima 168 deficiency points for only having 87 employees in 1995 when the population was 51,000. We will now have 86 employees for a population of 95,000 (includes coverage of Fruitvale). In 1995 we were 125 points ' away from going to a class 5 city from the current class 4. A class change of one point means an average increase in fire insurance of 10% for businesses. ' There may be options to increase manpower on certain days by only having a Crash Fire person at the airport during landing and takeoff times and placing that person on a pumper at night. The firefighter on the crash truck at the airport costs just over $280,000 per year. This includes wages, mandatory FFA training and a stipend. ' Balanced Budget Options • Section IV — 9 1 CITY OF Yll 2012 BUDGET REDUCTION OPTIONS - EXPLANATORY MEMORANDUM MUNICIPAL COURT Date: October 17, 2011 To: Honorable Mayor and Members of Yakima City Council Don Cooper, City Manager From: Linda Hagert, Court Services Manager Susan Woodard, Presiding Judge RE: 2012 Priorities of Government Reductions for Municipal Court This memorandum provides an explanation of the Municipal Court's participation in the priorities of government budget reduction in the amount of $10,000.00 for 2012. The Municipal Court is eliminating overtime for correction officers who have in the past served as security and bailiffs during the daily out of custody calendar. In the 2010 and 2011 budget that overtime was cut in half. Though the court is acutely aware of the requirement for this budget reduction, we have benefited tremendously by having security in our courtrooms during those arraignment dockets. Those officers have diverted many potentially violent situations in the court room as well as served as bailiffs for the court and its staff. I Municipal Court has participated in cost reduction measures in the past. The remainder of the court's budget is staff, expenses and costs directly related to state mandates. , The court, since its creation in 1997, has been understaffed by more than half of what the court clerk to judge ratio should be for courts that are similarly situated. We cannot in good conscience, propose any staff reductions in an effort to provide access to justice. Within the last 5 years, the Deputy Court Services Manager was eliminated from the court's budget. ' In 2009 a full time cashier position was eliminated which necessitated closing the public window and open to the public for only four hours per day. ' The court currently has one vacant position that we are attempting to fill and will have another vacancy at the end of November 2011. We are actively recruiting to fill those positions. ' 1 10 — Section IV • Balanced Budget Options ' I v CITY OF /CUL2 2012 BUDGET REDUCTION OPTIONS - EXPLANATORY MEMORANDUM I FINANCE & TECHNOLOGY I Date: October 17, 2011 I To: Honorable Mayor and Members of Yakima City Council Don Cooper, City Manager I From: Rita DeBord, Director Finance and Technology Services I RE: 2012 Priorities of Government Reductions for Finance I Budget / Service Reduction Option: Eliminate 1 Financial Services Specialist Position (filled). Consequences: Increases risk of errors, jeopardizes work processes already made fragile by prior I reductions, (this would be 2nd Specialist position eliminated in the past two years, which would equate to a 40% reduction in staffing of this position) and effectively eliminates opportunities for efficiency, processes or systems improvements due to lack of staff availability. (I believe the I Finance Division is currently at minimal staffing levels.) I Services affected include (list based on preliminary assessment; all impacts not completely vetted): a. Invoices (receivables) - take longer to produce and distribute > slowed cash inflow and /or loss of revenue; I b. Payments received - longer to receipt in, record and deposit > slowed deposits; increased reconciliation, bank balancing and internal control issues; c. Accounts Payable - slowed > may miss some discounts; greater probability of inaccuracies I in payments, late fees or interest and /or contract non - compliance; d. Needed computer and process improvements - significantly delayed > perpetuating some inefficiencies and deferring business improvements for our citizens, staff, etc.; I e. All critical work can't be covered by remaining 3 FTEs - need to re- direct work to higher skilled / paid employees > not cost effective; reduces staff availability for higher level work I and exposes their work to delays and higher risks of errors; f. With only 3 FTEs in this position, cross- training and back -up support, which is severely lacking at this time, would become nearly impossible / non - existent. ' Background: The Financial Services Specialists perform the following duties: 1. Accounts Payable - citywide (2 FTEs): Receive vendor invoices, bills from divisions, I employee reimbursement requests, etc. and audits each for proper documentation; (e.g.: confirm POs, compliance with city policies and vendor contracts, signatures, travel I authorizations, etc); Prepare batch payments / run billing processes; mail payments; address internal and external customer issues, questions, phone calls; respond to Public Disclosure Requests and maintain vendor / project files. I I Balanced Budget Options • Section IV -11 2. Accounts Receivable — citywide (1 FTE): Invoices all central receivables (e.g.: LID receivables, bus passes, hydrant meter billings; special utility billings; federal pass through loans — SIED / Section 108, etc.); Receipt gambling and other miscellaneous taxes / revenues; ' Track payments of invoices and follow up on delinquencies as needed; Prepare monthly, quarterly and annual reports. 3. Cash Receipting - citywide (1 FTE): Receive, count, record and deposit monies collect P % tY�^' � p collected throughout the city (parks, cemetery, golf course, senior center, utilities, police dept., etc.); Research and respond to title company requests for payoff amounts of outstanding bills owed to the City on properties being sold; assist cashiers citywide. 1 1 1 1 1 1 1 12 — Section IV • Balanced Budget Options ' I QTY OF YaLrlAt 2012 BUDGET REDUCTION OPTIONS - EXPLANATORY MEMORANDUM ' CITY MANAGEMENT /LEGAL t Date: October 17, 2011 To: Honorable Mayor and Members of Yakima City Council Don Cooper, City Manager ' From: Michael Morales, Assistant City Manager er g RE: 2012 Priorities of Government Reductions for Legal ' City Clerks 1. Reduce Public Records Clerk by 10 months • After retirement of City Clerk ' • Reroute general information phone line to a phone tree • Reduce the number of hours the lobby window is open ' Supplementary Budget Reductions — impacts of reduced staffing levels I City Manager 1. Eliminate Assistant City Manager — Reinstate CED Director 2. Eliminate Executive Assistant — Reinstate CED Office Administrator • Reduced assistance, service and coordination for Council activities Legal ' 3. Eliminate Legal Assistant 1 position (filled) • The Legal Assistant I position is currently staffed and serves as the office receptionist. ' The Legal Assistant I greets numerous victims, members of the public and attorneys daily, answers the telephone, manages mail delivery and pickup, orders supplies for the office, manages the upkeep of equipment, copies documents for cases, and maintains active and closed legal files including those stored off site. The other legal assistants have a heavy workload, and the loss of this position will reduce their ability to assist attorneys and to work on both civil and prosecution cases. ' 4. Eliminate Temporary Salaries • Elimination of temporary salaries will terminate a half -time legal assistant the Department has utilized for several years, as well as remove the funding source that has allowed the Department to hire one or two legal interns each summer. Each of these positions have provided significant assistance to the Legal Department and have assisted in helping the Department maintain the necessary work flow under the ' previously reduced staffing levels. Eliminating temporary salaries will have the immediate impact of shifting the duty of trial evidence collection to the prosecutors, attorneys already struggling with a heavy caseload. ' Balanced Budget Options • Section IV —13 1 Human Resources 5. Eliminate Human Resources Specialist • After March 31 retirement ' • By April 2012, five (5) of the remaining eight (8) positions will be new to the City and /or performing new, highly technical and regulated job functions. This will result in a potential reorganization of the division and assessment of what HR functions are being preformed now, which functions are truly mandated, which will take longer to get accomplished and which ones will no longer be done at all. I 1 1 1 1 1 14 - Section IV • Balanced Budget Options ' CITY OF Yelibffit t 2012 BUDGET REDUCTION OPTIONS - EXPLANATORY MEMORANDUM COMMUNITY & ECONOMIC DEVELOPMENT Date: October 17, 2011 To: Honorable Mayor and Members of Yakima Ci ty Council Don Cooper, City Manager ' From: oan Davenport, Planning p arming Manager RE: 2012 Priorities of Government Reductions for Community & Economic Development ' Code Administration 1. Eliminate Permit Technician (vacant) • Due to reorganization - filled by temp in 2011. ' Impact: The Permit Center operates with three permit technicians, p clans, plus the center supervisor. This situation has existed for most of 2011, and the impact to customers is longer wait times at the counter for those without an appointment. The situation has been offset by making a planner available at the counter, but that will end due to the reduction in the number of planners in 2011 ' and 2012. Comprehensive Planning 2. Transfer 40% of Assistant Planner to Parks & Recreation • Parks & Recreation Administrative Associate eliminated - share Assistant Planner - continuation of 2011 arrangement l Supplementary Budget Reductions - impacts Pp Y g p s of reduced staffing levels ' Code Administration 6. Eliminate Fire Code Inspector Position (filled) ' • Impact: Eliminates annual fire inspection program. This service is not required by state or federal law, but its elimination could potentially affect fire bureau ratings and lead to unsafe conditions in commercial operations. The fire code for construction will be ' enforced by the fire marshal and building plans examiners. The municipal code will need to be revised to reflect the elimination of this service. Option to continue service - The service is provided free of charge to the business community. A $20 fee would cover the full cost of service. t Balanced Budget Options • Section IV - 15 Engineering 7. Eliminate Construction Inspector Position (filled) • Impact: Engineering would have one Construction Inspector for all projects, so private ' development would be required to hire private contractors (civil engineer) to provide inspection and certification services. The city will accept design plans and inspection records that have been certified to meet city standards by the private contractor. Comprehensive Planning 8. Eliminate combined Community Development Specialist / Associate Planner position (filled) • After June 30 retirement 9. Modify Supervising Planner to Senior Planner • The Planning Manager will assume all administrative and supervisory duties for the Division. ' • A total of 3.3 planners have been eliminated from the Planning Division between 2009 and 2012. The reduction of 3.3 planners (a 47% reduction in 4 years) has had multiple impacts. Legal requirements for timely processing of applications has been a concern in some cases. Assistance to the public and other divisions has been limited, and long range planning tasks outlined in the Comprehensive Plan have been tabled. • At the same time, in an effort to reduce the contract costs with the Hearing Examiner, we have streamlined review processes to eliminate public hearings when possible and shifted some hearing responsibilities to the Planning Commission. This has increased the staff processing time as they now provide the support the Hearing Examiner once did for certain applications. 1 1 t 1 16 — Section IV • Balanced Budget Options ' I CITY OF Yaatta I 2012 BUDGET REDUCTION OPTIONS - EXPLANATORY MEMORANDUM STREETS & TRAFFIC I Date: October 13, 2011 I To: Honorable Mayor and Members of Yakima Ci ty Council Don Cooper, City Manager I From: Joe Rosenlund, Streets and Operations Manager I RE: 2012 Priorities of Government Reductions for Streets I These reductions translate into 33,000 square feet or about 1/2 lane -mile of roadway that will not be repaired in 2012. The signal shop will not be able to upgrade traffic signal lights to LED next year resulting in higher energy and labor costs in the future. Graffiti on traffic signs will not be dealt I with unless the sign's message is totally obscured. Crosswalks and lane markings will only be maintained on arterials and school zones; at a reduced level. It will take one to three months to I process work orders through the signs and line shop. At best, only two minor engineering or traffic studies could be completed in 2012. The reduction in the vehicle replacement fund will not have a major impact to operations until 2014 when some large pieces of equipment are due for I replacement. The cost to repair City of Yakima roadways rated as failed, Pavement Condition Index less than 15, I is $12,575,000. Approximately $3,908,000 is for three arterial and collector street sections with the remainder going towards twenty -six residential street sections. This represents one percent of the city's street network by area. Because these sections are failed, a simple grind and overlay project is I not an appropriate remedy. If any money is spent on these road sections, it should be for reconstruction. I At the current funding level, about three percent of the city's streets will be in the failed category by the end of next year and expected to grow to 17% by 2022. To spend the bulk of our street repair I dollars on failed streets is not a good maintenance strategy. It is more cost effective to provide maintenance on roads that only require a grind and overlay to bring back to excellent condition than to repair the roads only after they have failed. A grind and overlay project costs $3.42 per I square foot versus $9.92 to $12.47 per square foot for reconstruction. As more streets are brought to excellent or very good condition where maintenance costs are only $0.15 to $0.25 per square foot, more money becomes available to fix those failed street sections. I I I Balanced Budget Options • Section IV -17 I I CITY OF Y�./«. 2012 BUDGET REDUCTION OPTIONS - EXPLANATORY MEMORANDUM I PARKS & RECREATION I Date: October 20, 2011 1 To: Honorable Mayor and Members of Yakima City Council Don Cooper, City Manager I From: Ken Wilkinson, Parks & Recreation Manager I RE: 2012 Priorities of Government Reductions for Parks Administration I 1. Eliminate 1 position - reallocate Planning Net Reduction - The sharing of the Parks Administrative Associate FTE with Planning would simply continue the current reduced I capacity of the position Supplementary Budget Reductions I Park Maintenance I 1. Reduce Park Tree Maintenance - Regular trimming and removal of trees will be reduced 2. Small Tools - The small tools will not be replaced as often 3. Reduce Park Maintenance Temporary Workers - The number of park maintenance I temporaries will be reduced and the number of staff available to clean rest rooms, paint over graffiti, repair vandalism and clean rest rooms will be reduced 4. Fertilizer - Reduce the amount of fertilizer applied to the parks I 5. Overtime - Park Maintenance - Park Maintenance will not be able to work overtime for the limited number of times when they are needed to repair irrigation line breaks, I respond to call outs, snow removal, etc. Community Recreation I 1. Salaries - After School Program and Supplies - Reduce staffing levels and decrease the number of children in the program or increase student to staff ratio 2. Salaries - Community Recreation and Movie Fees - Decrease the total number of movies I show for free in the parks 3. Salaries - Summer Playground Program and Supplies - Reduce staffing levels and decrease the number of children in the program or increase student to staff ratio I I I 18 - Section IV • Balanced Budget Options I 1 Golf Course t 1. Overtime - Fisher Park Golf Course - Reduce the amount of overtime available to golf course staff to complete work on the weekends and during golf tournaments Aquatics - 424 1. Reduce Franklin Pool Temporaries - Targeted reduction in operating hours at Franklin Pool Sports - 426 1. Salaries - Ball Field Maintenance - Quality of ball field maintenance will be reduced I I ' Balanced Budget Options • Section IV —19 CITY OF Y� cmtG 2012 BUDGET REVENUE OPTIONS REVENUE INCREASES - STORMWATER Due to the delay in the issuance of the stormwater permit by Ecology and without knowing the permits compliance activity requirements, the City is proposing to maintain the current annual rate of forty -three dollars ($43) per equivalent residential unit (ERU) to fund the Storm Drainage and Surface Water Management Utility as established in 2011, to be extended for 2012. As such, the ' projected revenues from the stormwater assessment fees in 2012 are expected to total $2,020,000. ➢ A 9% in -lieu tax on the fees would generate $181,800. ' > A 14% in -lieu tax on the fees would generate $282,800. If it is the desire to increase the rates to recover the cost of the in -lieu tax, they would need to be ' increased accordingly: > 9% in -lieu tax - $43 /ERU to $46.87/ERU > 14% in -lieu tax - $43 /ERU to $49.00 /ERU If the Stormwater Program absorbs the increased cost without a rate increase, it will need to be taken out of its reserves, leaving the program vulnerable to cover compliance issues with its upcoming permit or unexpected significant capital repairs /replacements of infrastructure and /or equipment. It will also negatively impact the City's ability to qualify for stormwater grants. State grants are very competitive and require a 25% match. i 1 20 — Section IV • Balanced Budget Options , I CITY OF VI &it I 2012 BUDGET REVENUE OPTIONS REVENUE INCREASES - PLANNING FEES 1 A fee schedule that supports the actual cost of processing applications would need to cover staff time, legal ads, printing, postage and hearing examiner fees. In 2010, actual fee collection was I $55,000. Staff costs alone for 3.67 planners and the Technician exceed $220,000. A sampling of fee increases is illustrated below to show the necessary fee to recover actual costs. This is not a comprehensive list of fees or adjustments. No public review of these changes has occurred. I Printing Hearing Planner Tech Actual Change in g g g Current Fee & Postage Legal Ad Examiner Time Time Costs Fee I CL2 $365 $99 $0 $0 $284 $105 $853 $488 CL3 $700 $99 $314 $1,685 $465 $124 $3,387 $2,687 SEPA $265 $99 $314 $0 $342 $124 $1,144 $879 I PSP $340 $99 $0 $0 $436 $124 $999 $659 PLP $380 + $20/lot $99 $314 PC $825 $148 $1,386 $986 RZ $560 <3 Acres $99 $314 PC $608 $63 $1,084 $524 PSE $0 $0 $0 $0 $250 $17 $267 $267 I I I I I I I I I I Balanced Budget Options • Section IV — 21 I POLICY ISSUES (OTHER THAN PRIORITIES OF GOVERNMENT) 11 1 CITY MANAGEMENT I Purchasing Proposed Personnel Comments/ I Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel Council Action Add one Buyer I Position Yakima County Elim. Temp $19,000 Budgeted I (Delete part -time Temporary) via allocation Add Buyer $63,500 Increase $44,500 2011 City Allocation (50 %) $226,755 2011 County Allocation (50 %) $226,755 I $453,510 With New Position: 2012 City Allocation (43 %) $225,239 P2012 County Allocation (57 %) $298,572 Revenue Budgeted $523,811 I Net City Allocation 2011 -2012 ($1,516) Stormwater I Proposed Personnel Comments/ Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel Council Action I 2012 Stormwater Reserve Fund Unbudgeted Create Reserve Funds for Stormwater I Wastewater Proposed Personnel Comments/ Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel Council Action I Wastewater Connection Charge Wastewater Fund Budgeted Revision I Wastewater Rates for 2012 — 2014 Customers of the Revenue: Budgeted Rate Increase of 5.1% annually for the Wastewater Utility 2012 $737,750 I next 3 years 2013 $739,750 2014 $741,750 I MUNICIPAL COURT I Proposed Personnel Comments/ Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel Council Action I No Policy Issues Submitted I I Other Policy Issues • Section V -1 FINANCE I Proposed Personnel Comments/ I Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel Council Action No Policy Issues Submitted ' COMMUNITY AND ECONOMIC DEVELOPMENT I Capitol Theatre t Proposed Personnel Comments/ Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel Council Action Increase in Capitol Theatre PFD Revenues & PFD I Management Fee Fund Balance Revenues $49,000 From $174,000 to $232,000 Fund Bal. 9,000 Total $58,000 Budgeted I Convention Center t Proposed Personnel Comments/ Policy Issue Request / Justification Funding Source Salary / Benefits Non- Personnel Council Action Increase in Convention Center PFD Revenues $14,650 Budgeted t Management Fee From $664,350 to $679,000 Increase in Convention Center Convention Center $10,000 Budgeted t Professional Services Operating Revenue From $$165,000 to $175,000 Outside Agency Proposed Personnel Comments/ Policy Issue Request / Justification Funding Source Salary / Benefits Non- Personnel Council Action Continue Support for the Committee for CBD Capital 2011 Downtown Yakima (CDY) Improvement Budget $50,000 Fund (321) 2012 Budget $50,000 Budgeted POLICE Proposed Personnel Comments/ Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel Council Action t 9 Replacement Police Vehicles Law & Justice $270,000 Capital Fund I I 2 — Section V • Other Policy Issues I 1 FIRE I Proposed Personnel Comments/ Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel Council Action I No Policy Issues Submitted I PUBLIC WORKS I Refuse Proposed Personnel Comments/ Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel Council Action I Add One Solid Waste Collector/Driver Refuse Division 2012 Unbudgeted funded by new customers from prior Operating Fund (1/2 Year) $29,500 annexations 2013 $59,000 Increase Department Assistant II to full- Refuse Division $17,750 time Operating Fund I Transit I Proposed Personnel Comments/ Fun Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel Council Action Purchase 3 used 30 ft. Buses for new Local Sales Tax $100,000 Budgeted I Ellensburg- Yakima route Purchase 9 Vanpool Vans 75% Grant Funds $225,000 I 25% Local Sales Tax $75,000 Budgeted $300,000 1 Transit Center Canopy Local Sales Tax $150,000 Budgeted I I I I I I I Other Policy Issues • Section V — 3 Equipment Rental 1 Proposed Personnel Comments/ Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel Council Action I Equipment Rental Equipment Rental $1,153,500 Budgeted Additions (Streets) Replacement Fund I Crack Sealer $60,000 ' Line Laser 8,500 Replacements Streets 2 3 /4 Ton PU /Snowplow 90,000 Street Sweeper 185,000 38' Bucket Truck (used) 45,000 Water 1/2 Ton PU 30,000 Refuse I 2 Automated Refuse Truck 630,000 Wastewater Ford Escape Hybrid 35,000 3 /4 Ton Chassis/Body 45,000 I Cargo Van 25,000 Total $1,153,500 I I I I I I I I I I I 4 — Section V • Other Policy Issues I CITY OF VI- Last ' CITY MANAGEMENT / PURCHASING 2012 POLICY ISSUES ADD ONE BUYER I POSITION ' BUDGETED ' PROPOSAL Add one Buyer I position and delete 65% temporary Department Assistant II. City /County Purchasing functions have been merged since November, 2009. With a consistent project list backlog ' of around 105 projects, Purchasing has been mostly reactive instead of proactive in handling workload. County Commissioners have approved a new allocation of the Purchasing budget from ' 50/50% to 57% County, 43% City, which includes the increased salary costs to make this staff transition. There will be a net decrease to the City in the 2012 budget of ($1,516). ' IMPACTS 1. Fiscal Impact - Labor and Salary impact - Buyer I only: ' Eliminate DAII ($19,000) Add Buyer I 63,500 ' Difference $44,500 Total 2011 Purchasing Budget 50% City Allocation $226,755 ' 50% County Allocation $226,755 Total 2012 Purchasing Budget with New Position Added 57% County Allocation $298,572 43% City Allocation $225,239 ' City Allocation 2011 v. 2012 ($1,516) ' 2. Proposed Funding Source - 57% Yakima County via allocation, 43% City General Fund. 3. Public Impact - More savings will be realized through the ability to identify and perform more joint bid processes and volume buying. ' 4. Personnel Impact - Add .35 FTE by eliminating 65% Temporary Department Assistant II and add one full time permanent Buyer I. ' 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. ' 7. Viable Alternatives - None. ' CONCLUSION AND /OR STAFF RECOMMENDATION Staff recommends approval of this policy issue. I ' Other Policy Issues • Section V — 5 Y� CITY OF Ld1lG CITY MANAGEMENT / STORMWATER 2012 POLICY ISSUES STORMWATER RESERVE FUND UNBUDGETED I PROPOSAL , It became apparent to staff through our work with FCS Group during the wastewater rate study, that the stormwater utility lacks reserves and cash balances that are typically considered necessary and prudent for utility management practices. Industry practices for operating reserves for 0 & M expenses range from 30 days to 90 days. Common industry practice for capital contingency reserves is 1% to 2% of system fixed assets. This would equate to a $1.9 to $2.2 million reserve. In addition, consideration may be merited for restricted debt reserves to qualify for future grants or purchase construction bonds. There has not been any policy set to address reserves for the stormwater utility. Staff is not recommending a set funding level at this time. However, as rates are reviewed for 2013 under the new NPDES Permit requirements, consideration in establishing a reserve for the next five years may be appropriate. IMPACTS 1. Fiscal Impact - None at this time. ' Current reserve levels Operating Fund $770,000 Capital Fund $264,000 Total (End of 2012) $1,034,000 2. Proposed Funding Source - Not applicable. 3. Public Impact - Provides for equitable and stable Stormwater rates. 4. Personnel Impact - None. , 5. Required Changes in City Regulations or Policies - Council direction to establish reserves for the stormwater utility is required. , 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - Not establishing a reserve policy for the Stormwater Utility may lead to inequitable and unstable future stormwater rates. I CONCLUSION AND /OR STAFF RECOMMENDATION This item is a Council policy decision. Staff respectfully requests Council direction as to whether it desires for a reserve policy for the Stormwater Utility to be established. Options for such a reserve I are to be brought back to Council for review and approval. I 6 - Section V • Other Policy Issues 1 �/ CITY OF / ' CITY MANAGEMENT / WASTEWATER 2012 POLICY ISSUES WASTEWATER CONNECTION CHARGE REVISION BUDGETED PROPOSAL The City is authorized by Title 35 RCW to acquire, construct, own, operate, and provide financing for waterworks and systems of sewerage, and to establish rates, fees, and charges. As such, the City 1 calculates and collects wastewater connection charges (WCCs) for new construction projects which are allocated to the new customers in accordance with §7.58 of the Yakima Municipal Code. WCCs are required to properly finance the operation, growth and replacement of both the infrastructure of the collection system and the wastewater treatment plant. Council has had a long ' standing policy that existing ratepayers pay for capital improvements driven by regulations, renewal, and safety while minimizing its subsidy for growth. A clear, concise methodology for calculating the City's WCCs is needed for the Wastewater Division. The WCC process should be easily administered, transparent and predictable by prospective users. The current methodology is overly complex, burdensome, and extremely difficult for prospective investors to understand or rely upon and are frequently questioned by the contractors and /or developers. This is exactly the reasoning why the City had FCS Group review its WCC process. FCS Group clearly determined early in the study that the City's current process is far too complex ' as compared to other municipalities. The City's wastewater system serves as an engine to our local economy. Unfortunately these difficulties can serve to limit the interest of developers to our community. ' It is therefore the l oal and desire of the Wastewater Division to simplify the entire WCC process; g p�Y p ' allowing multiple benefits for the City and prospective investors. Simplifying the process will not compromise the financial needs of the sanitary collection system or the wastewater treatment plant. Many other municipalities utilizing a simpler process have found much success. The proposed methodology for calculating WCCs will be based on water meter size or treatment demand. The use of zones will be simplified to "Inside City" and "Outside City." ' IMPACTS ' 1. Fiscal Impact — May actually encourage more development leading to an increase in revenue from wastewater connection charges. 2. Proposed Funding Source — Wastewater Fund 473. 3. Public Impact — More predictable, consistent method for calculating wastewater connection charges, providing transparency for the process. Other Policy Issues • Section V — 7 4. Personnel Impact - Time savings for individuals calculating the wastewater connection charges. 5. Required Changes in City Regulations or Policies - Ordinance revision required to be approved by City Council to incorporate change in calculation process. 6. Legal Constraints, if applicable - None. I 7. Viable Alternatives - Continue to implement the current complex methodology for , wastewater connection charge calculations which may discourage potential developers. CONCLUSION AND /OR STAFF RECOMMENDATION I Staff respectfully recommends Council approval for a change in its current wastewater connection charge calculation process, to that of one which is clear, concise and can be easily administered, while being transparent and predictable by prospective users. I I I 1 I I 8 — Section V • Other Policy Issues ' F CITY O CITY MANAGEMENT / WASTEWATER 2012 POLICY ISSUES WASTEWATER RATES FOR 2012 — 2014 BUDGETED ' PROPOSAL In order to provide an unbiased comprehensive analysis of the Wastewater Division's financial needs, the City contracted with FCS Group to conduct a rate study over a ten -year period (2012- , 2021). Such services provide the City with an honest in -depth look as to what proper funding levels are really required to ensure the citizens of Yakima of wastewater services now, and in the future; while remaining compliant with all of the federal and state rules and regulations. To assist in meeting regulatory requirements, the 2011 budget approved by City Council included ' $12 million in funding through the acquisition of a combination of bonds and /or loans. An existing major bond will expire in 2011, unlocking debit service capacity for about half the $12 million in revenue bond or loans. When the existing bond is paid off, a new bond will be immediately ' secured with the first payments due in 2012. In total, the Wastewater Division is looking to increase its debit service by approximately $400,000 per year without the need for a rate increase. However, to maintain pace with all the other regulatory compliance issues identified over the next ten - years, rates ultimately need to be increased. ' The rate study conducted by FCS Group, ten -year review of the Wastewater Division's regulatory requirements for both the wastewater treatment plant and the sanitary sewer collection system, indicates funding needs of approximately $71 million. FCS Group also identified the need to eliminate the 25% subsidy of the Pretreatment Program currently being provided from wastewater user rates. This will require a change of philosophy as this has been a long standing policy implemented by City Council. Based on regulatory requirements, replacement costs, and current ' funding levels, FCS Group is proposing an annual rate increase of 5.1% over the next three -years to provide the Wastewater Division with proper funding levels. r IMPACTS 1. Fiscal Impact - Annual rate increase of 5.1% for the next three years to begin properly funding the Wastewater Division of $71,000,000 in capital improvements required to maintain compliance with current regulations. 2. Proposed Funding Source - Annual increase of 5.1% for the next three years into Fund 473. ' 3. Public Impact - The average bi- monthly residential wastewater bill will increase by $3.62, $3.81, and $4.00 respectively for years 2012, 2013, and 2014. ' 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - Ordinance establishing an annual rate ' increase of 5.1% for the next three years will need to be approved by City Council. Other Policy Issues • Section V — 9 6. Legal Constraints, if applicable — Funding levels required to meet regulatory obligations of the City's NPDES Permit with the Department of Ecology. 7. Viable Alternatives — Approving an annual rate increase less than the recommended 5.1% for each of the next three years will immediately jeopardize the City's ability to meet its regulatory obligations with its NPDES permit and its ability to continue providing its ' current level of wastewater service to the community. It will also have a negative impact on economic and development benefits to the City of Yakima and will significantly increase future rates. CONCLUSION AND /OR STAFF RECOMMENDATION Staff respectfully recommends Council approval of an annual 5.1% rate increase for the next three years to properly fund the needs and requirements of the Wastewater Division. i I I I 1 1 r I I 1 1 0 - Section V • Other Policy Issues I I r CITY OF ' COMMUNITY & ECONOMIC DEVELOPMENT / CAPITOL THEATRE 2012 POLICY ISSUES INCREASE IN CAPITOL THEATRE MANAGEMENT FEE BUDGETED / UNBUDGETED ' PROPOSAL The Capitol Theatre facility is owned by the City of Yakima. For the past 34 years, the facility has been managed by the Capitol Theatre Committee (CTC), a separate non -profit corporation ' administered by a professional staff under the stewardship of a community -based volunteer board of directors. The City and CTC have a management agreement that is renewed every five years. ' There are two core covenants of the agreement: The CTC is responsible for "the enhancement of the economic and cultural climate of the City and its environs." To this end, the CTC has established programs and services including the Best of Broadway, EDGE and Capitol Kids series, setting a community standard for culture and quality -of- life that is unsurpassed in all but the major metropolitan areas of the State. CTC sponsored activities cost an average of $1.5 million each year and are funded through a combination of ticket sales and fund raising. Total attendance to these events exceeds 25,000 annually. In addition, the CTC has independently secured over $11 million in capital infrastructure to further enhance the ' economic and cultural climate of the City and its environs. $10 million of that has been contributed directly to the City in the form land, buildings, equipment and cash. ' The CTC is also responsible for "the promotion, operation and /or use of such facility for assembly purposes." Currently, it costs $433,000 a year to keep the Capitol Theatre doors open. This does not include the CEO's salary or any costs associated the CTC, including programming, fund raising, ' marketing or outreach. It is the bare bones amount needed to ensure that community events like the Kiwanis Songfest and Melody Lane's annual dance recital can perform, to give the Yakima Symphony Orchestra and Town Hall a place to call home. It also includes concerts and world class entertainment like Bryan Adams, Bill Cosby and Riverdance: shows brought to Yakima by outside promoters. Total attendance to these events exceeds 75,000 annually. ' The CTC is seeking a management fee that better represents the costs of managing the facility in accordance with the operating agreement: Costs: $128,000 Stage and Janitorial (full -time Technical Director, hourly janitorial & supplies) 73,000 Box Office (part -time hourly) 232,000 G &A (half -time GM, full -time bookkeeper; Phone, Computer, Utilities, Ins. & Supplies) $433,000 Capitol Theatre Facility Operating Costs Revenues: $174,000 City paid management fee (reduced by $30,000 in 2010) $109,000 Net profit from facility rentals ' $283,000 Total Operating Revenues Short -Fall: ($150,000) 1 ' Other Policy Issues • Section V —11 Programming drives the success of fund raising and in the past, the CTC has managed to raise the 1 shortfall through community solicitations, our Annual Fund Drive. However, this is no longer possible. Increased programming costs, compounded by weak ticket sales due to the sluggish I economy, have taken away the excess previously generated to support City facility operations. Operating losses for the past three years have exceeded $450,000. The foundation of this proposal is to maintain a level of stewardship and service that helps define the City of Yakima as a vibrant 1 community investing in itself, so others will follow. Support Comparison — 2010 IRS 990's t Functional Expenses Revenues Expenses Profit/Loss Olympia 2,189,259 2,242,409 (53,150) Tacoma 3,651,375 3,697,616 (46,241) I Bellingham 2,069,868 1,940,544 129,142 Yakima 1,760,196 1,750,330 9,866 Balance Sheet I Assets Liabilities Net Olympia 845,155 407,311 437,844 Tacoma 1,207,668 1,702,538 (494,870) I Bellingham 3,414,705 483,751 2,930,954 Yakima 1,721,740 153,098 1,568,642 1 Management Fees Olympia 343,278 15.3% I Tacoma 500,000 13.5% Bellingham 398,280 20.5% Yakima 209,000 11.9% III Olympia - Washington Center for the Performing Arts Tacoma - Broadway Center for the Performing Arts Bellingham - Mount Baker Theatre Yakima - Capitol Theatre IMPACTS I 1. Fiscal Impact — The CTC cannot afford to encumber further losses. Balancing the budget is critical. The CTC has already reduced overhead by $225,000 (16 %) annually, including I shedding 44% of its salaried staff. The first presentation of the current season was the Broadway musical Shrek. Buying patterns reversed from the norm and skewed to less I expensive seats, reducing anticipated revenues significantly. We believe this, compounded by current economic uncertainties, to be a precursor to lower - than- expected ticket sales for the rest of the season. To compensate, the remaining CTC administrative staff has been I reduced to a four -day work week, further reducing CTC's ability to achieve its core competencies. I I 12 - Section V • Other Policy Issues I 2. Proposed Funding Source - Budgeted - increased allocation of PFD Revenues $49,000 ' Allocation of fund balance 9,000 Total $58,000 ' Unbudgeted - Potential sources of additional revenue that could make up the remaining shortfall of $92,000: ' • Cable TV Franchise Tax increase • Admissions Tax • City could absorb overhead (utilities, insurance, etc.) • City could buy CTC owned equipment 3. Public Impact - As stated above ' 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 1 7. Viable Alternatives - The CTC is fundamentally a community service organization (as represented by the programs and services we offer.) Supporting this is a subdivision ' contracted with the City: facility management. In the past, the CTC has been able to subsidize the facility, but the current economic climate has forced the CTC to focus on its core competency of community service. They both go hand -in -hand, and to preserve the ' Capitol Theatre facility, the CTC and their partnered service to community, the City must support its facility at a level that sustains access for all. Otherwise, it will become necessary to rethink the CTC's facility management responsibility. This is not to say this is a "viable" option, it is not. But, considering the alternatives, it may be the only one that is available. ' CONCLUSION AND /OR STAFF RECOMMENDATION For 2012, transfer $58,000 supported by current reserves and projected PFD revenue collections. This has been presented to and approved by the Board of the PFD on September 29, 2011. Future ' years will require a concerted strategic effort to insure the Capitol Theatre remains a viable entity. ' Other Policy Issues • Section V —13 CITY OF Y imut COMMUNITY & ECONOMIC DEVELOPMENT / CONVENTION CENTER 2012 POLICY ISSUES INCREASE IN CONVENTION CENTER MANAGEMENT FEE BUDGETED I PROPOSAL ' This proposal requests a $14,650 (2 %) increase to the management fee, from $664,350 to $679,000. This line item includes wages for the Convention Center staff and the management fee to the Visitors and Convention Bureau. This request for an increase is only for Convention Center staff. The Center has the new plaza of 7,000 sq. feet to set up, tear down, and maintain. In addition, the Center is currently running 13% above last year in event days held and 12% above in attendees. The additional space, increased bookings and attendees are impacting the labor. This increase will assist in covering the increased costs of medical insurance, L &I expenses and cost of living increases and staffing. I IMPACTS 1. Fiscal operations. Impact - 14 650. Fund 170 - Convention Center o P $ � p 2. Proposed Funding Source - Convention Center Operating revenues and additional funding I by the Public Facilities District (PFD). 3. Public Impact - Continue to provide excellent service. , 4. Personnel Impact - Allow adequate staffing to maintain the Convention Center facility and provide a high level of service to clients and patrons. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - None. t CONCLUSION AND /OR STAFF RECOMMENDATION Staff and the Public Facility District Board of Directors recommend approval of this policy issue. 14 — Section V • Other Policy Issues , CITY OF Ya Lnit ' COMMUNITY & ECONOMIC DEVELOPMENT / CONVENTION CENTER 2012 POLICY ISSUES INCREASE IN CONVENTION CENTER PROFESSIONAL SERVICES ' BUDGETED ' PROPOSAL This proposal requests a $10,000 increase - from $165,000 to $175,000 - to the professional service category, paid to the Yakima Valley Visitors and Convention Bureau, which will partially restore funding removed in 2011, yet will leave the budget at 3% below 2010 actual levels. This is needed to maintain effective service levels for groups and meetings, and marketing efforts that support economic development and vitality. IMPACTS 1. Fiscal Impact - $10,000. Fund 170 - Tourist Promotion. 2. Proposed Funding Source - Convention Center Operating revenues. 3. Public Impact - Assist in maintaining the tourism sector of the local economy. ' 4. Personnel Impact - None. ' 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - None. ' CONCLUSION AND /OR STAFF RECOMMENDATION Staff and the Public Facility District Board of Directors recommend approval of this policy issue. 1 ' Other Policy Issues • Section V —15 CITY OF Xi - LILT COMMUNITY & ECONOMIC DEVELOPMENT / CONVENTION CENTER 2012 POLICY ISSUES COMMITTEE FOR DOWNTOWN YAKIMA (CDY) BUDGETED PROPOSAL ' The Committee for Downtown Yakima (CDY) has requested that the City continue to support their Clean and Safe programs at the $50,000 level for 2012. The City does not make other contributions through the PBIA assessment, but if it did at this level the City would be one of the larger single contributors. Originally, $50,000 came out of the Parks Fund, but that expense became prohibitive as budget curtailments were implemented. In reviewing options for funding, funding it out of the Central Business District (CBD) Capital Improvement fund was identified, as the revenue consists of , monthly parking permits in the downtown lots. That is where the funding has come from for the last three years. Even years, though this was a viable revenue source in prior and could continue into the 2012 g P Y budget cycle, this funding source may not be sustainable into the future because of competing needs in the downtown, including continuation of improvements (Phase 4) and parking program changes. IMPACTS 1. Fiscal Impact - $50,000. ' 2. Proposed Funding Source - CBD Capital Improvement Fund - #321. 3. Public Impact - An attractive, safe, and inviting downtown is a source of community pride and future economic development. Maintaining the newer amenities is less costly than replacing unmaintained, broken features in the future. ' 4. Personnel Impact - The City has a Safe and Clean contract for services with CDY which has been consolidated into a single agreement specifying the services in receipt for the lump sum contribution. 5. Required Changes in City Regulations or Policies - None. ' 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - Pursue additional private funding for the level of downtown maintenance required by the new amenities and desired downtown customer experience. ' CONCLUSION AND /OR STAFF RECOMMENDATION This is a Council policy decision. 16 — Section V • Other Policy Issues , • CITY OF YLG�GCIILIG POLICE ' 2012 POLICY ISSUES REPLACEMENT POLICE VEHICLES PROPOSAL Police vehicles are a key component to providing police services. In order to maintain adequate levels of safe and reliable police vehicles the Department needs to replace twelve vehicles a year, ' however there has only been funding for nine identified. In the last two years we have replaced fifteen vehicles (three of which were not funded by the City Capital Fund) instead of the twenty four that were needed. This means that we are now operating vehicles in excess of their expected ' service life, some of which are becoming unsafe, unreliable, and expensive to maintain. Front line patrol vehicles used to be on a three year replacement schedule and are now on a four year replacement schedule. If adequate replacement vehicles are not purchased this year we will have to I move to a five year replacement schedule. IMPACTS 1. Fiscal Impact - $270,000 ($360,000 actually needed) 1 2. Proposed Funding Source - Law & Justice Capital Fund ' 3. Public Impact - Officers can reliably respond to calls for service. 4. Personnel Impact - Officers will operate safe and adequate vehicles. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. ' 7. Viable Alternatives - None, replacement can no longer be deferred. p g ' CONCLUSION AND /OR STAFF RECOMMENDATION Police vehicles are mechanical objects which have predictable service lives. Replacement cannot be ' continually deferred if we are to operate safe and reliable vehicles. Police officers cannot do their jobs with unreliable vehicles that spend excessive amounts of time undergoing repair. Additionally, older vehicles are much more expensive to maintain and tend to have major, very expensive ' failures. Staff recommends replacement of as many vehicles as possible up to the twelve needed. Attached is a chart showing current police patrol units. Vehicles with the darkest highlighting are overdue for replacement. Those with the lighter highlighting should be replaced in 2012. Since actual vehicle replacement will not occur until mid -2012 changes may be made on which vehicles are replaced based on changes in fleet status. 1 ' Other Policy Issues • Section V —17 PD # City # Year Make Model Color Mileage Assignment Notes Patrol 1101 1679 2011 Ford CV B & W 11000 Patrol I 1102 1682 2011 Ford CV B & W 10000 Patrol Sergeant 1103 1683 2011 Ford CV B & W 8000 Patrol Sergeant I 1104 1681 2011 Ford CV B & W 9000 Patrol 1105 1686 2011 Ford CV B & W 8000 Patrol 1106 1680 2011 Ford CV B & W 12000 Patrol I 1107 1678 2011 Ford CV B & W 10000 Patrol 1108 1685 2011 Ford CV B & W 6000 Patrol 1109 1684 2011 Ford CV B & W 3000 Patrol Transit I 1001 1671 2010 Ford CV B & W 37000 Patrol 1002 1670 2010 Ford CV B & W 30000 Patrol 1003 1668 2010 Ford CV B & W 27000 Patrol I 1004 1669 2010 Ford CV B & W 25000 Patrol 1005 1672 2010 Ford CV B & W 6000 Patrol Housing 111 904 1658 2009 Ford CV B & W 58000 Patrol 905 1656 2009 Ford CV B & W 57000 Patrol 906 1657 2009 Ford CV B & W 52000 Patrol 907 1657 2009 Ford CV B & W 59000 Patrol 908 1662 2009 Ford CV B & W 59000 Patrol 910 1661 2009 Ford CV B & W 49000 Patrol I 804 1626 2008 Ford CV B & W 65000 Patrol Tactical 806 1627 2008 Ford CV B & W 62000 Patrol I 807 1629 2008 Ford CV B & W 70000 Patrol 808 r 1630 2008 Ford CV B & W 84000 Patrol 809 1631 2008 Ford CV B & W 44000 Patrol ' 811 1635 2008 Ford CV B & W 80000 Patrol 812 1633 2008 Ford CV B & W 70000 Patrol Tactical 814 1634 2008 Ford CV B & W 56000 Patrol 703 1612 2007 Ford CV B & W 77000 Patrol 704 1611 2007 Ford CV B & W 78000 Patrol 507 2992 2005 Chevy Tahoe B & W 66000 Patrol 4 X 4 I SRO 404 1466 2004 Ford CV Blk 53000 SRO Hipper I 605 1493 2006 Ford CV B & W 92000 SRO Sanchez 412 1468 2004 Chevy Impala B & W 51000 SRO Diaz 403 1465 2004 Ford CV Blk 57000 SRO Strother I 410 1467 2004 Ford CV Blk 56000 SRO Pepper 607 1496 2006 Ford CV B & W 75000 SRO Graves K -9 I 411 2287 2004 Chevy Tahoe B & W 89000 K -9 Yates 608 1499 2006 Ford CV B & W 65000 K -9 Adams 610 1494 2006 Ford CV B & W 51000 K -9 Lee I 707 1617 2007 Ford CV B & W 72000 K -9 Andrews 701 1610 2007 Ford CV B & W 58000 K -9 Rogers ' 18 — Section V • Other Policy Issues I CITY OF Ya &it PUBLIC WORKS / REFUSE 2012 POLICY ISSUES ADD ONE SOLID WASTE COLLECTOR/DRIVER ' UNBUDGETED ' PROPOSAL The Refuse Division has the authority under RCW 35.13.280 to provide garbage and yard waste collection to residential properties annexed into the City of Yakima seven years after the annexation ' date. This seven -year period was established to reduce damages to the private hauler providing refuse service in territories annexed into the city. Yakima Waste Systems, Inc. has an exclusive ' franchise to provide residential garbage and yard waste for the seven years to the areas annexed into the City of Yakima. ' This proposal is to add one new Solid Waste Collector/Driver Position to accommodate the new residential services anticipated over the next five years due to annexations which have already occurred. Beginning in July 2012, the first of three large residential areas is scheduled to begin ' service under the operating authority of the Refuse Division. The other two areas are scheduled for February 2013 and April 2014. It is estimated that the three areas will increase the current service ' area by approximately 2,000 garbage accounts, 500 yard waste accounts and 20 bin accounts. No additional equipment is required to provide service to these areas. Additional garbage and yard waste carts will be needed, however funds regularly included in the budget for cart purchases will meet those requirements. The Englewood Annexation, scheduled to begin City refuse service in July 2012 contains ' approximately 875 residential customers in an area covering over 600 acres. Providing services to this sprawling area would be very difficult with the current staffing level. Additional services would have to be added to existing routes and most routes would have to be redesigned with many ' changes to collection days. Travel time would increase with multiple trips to the landfill, placing extra stress on equipment and possibly placing staff at a greater risk of accident or injury during inclement weather. In 2000 a study session was held to consider options for providing refuse service to recently ' annexed areas at that time. Council determined that until such time as the City had annexed enough area to generate the revenue needed to cover the expenses of adding new equipment and personnel, the new service area should be contracted out. The need to contract out service areas ' was not necessary due to the implementation of automated refuse collection in 2001. The change to automated collection and redesigning collection routes caused a decline in the demand for new staff and equipment. Table 1 demonstrates a 19% decrease in staffing levels from 2001 through 2011 by moving to one -man Refuse collection vehicles. During this period of staff reduction, delivered service for residential garbage carts, yard waste carts and metal bins grew substantially. Table 2 shows a 33% increase in service levels for the same time period. 1 ' Other Policy Issues • Section V —19 TABLE 1 I Total Refuse Division positions from 2001 to 2011. 2001 -2010 I 2001 -3 2004 2005 2006 2007 2008 2009 2010 2011 Change Collector/Driver 9.5 9.5 9.5 9.5 9.5 9.5 9.5 11.0 11.0 1.5 I Maintenance Worker 8.0 7.0 7.0 7.0 6.5 6.0 6.0 3.5 3.5 -4.5 Temporary Helper 1.6 2.13 1.036 .636 0 0 0 0 0 -1.6 Code Compliance Officer 0 0 0 0 0 0 0 1.0 1.0 1.0 I TOTAL 19.1 18.63 17.536 17.136 16 15.5 15.5 15.5 15.5 -3.6 TABLE 2 1 Total Refuse Division services from 2001 to 2011. 2001 -2010 I 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Change Residential Can /cart Accts 16,960 17,100 17,270 18,037 18,100 18,750 19,090 20,200 22,000 22,100 22,562 5,602 I Yard Waste Accts 3,600 3,700 3,900 4,040 4,100 4,100 4,200 4,310 4,725 5,050 5,430 1,830 Bin Service 395 385 385 423 430 430 435 435 435 435 440 45 IMPACTS I 1. Fiscal Impact - Salary and benefits for the Solid Waste Collector/Driver for 2012 are I estimated at approximately $29,500 for the partial year, and $59,000 for 2013 and subsequent years, however, these costs will be offset by revenue received from the annexed area. The I 2012 estimated revenue for garbage, yard waste and bin service for the Englewood Annexation is approximately $71,000. 2. Proposed Funding Source - Refuse Division Operating Fund /rates from new customers. I 3. Public Impact - City of Yakima Refuse Division would provide garbage, yard waste and I bin service to residential account within annexed areas. 4. Personnel Impact - One additional Solid Waste Collector/Driver position would be added I to the Refuse Division. 5. Required Changes in City Regulations or Policies - None. I 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - None. , CONCLUSION AND /OR STAFF RECOMMENDATION I Staff respectfully requests Council consideration and approval of this policy issue to increase the 50% Department Assistant to 100 %. I I 20 - Section V • Other Policy Issues I CITY OF Y2 ' PUBLIC WORKS / REFUSE 2012 POLICY ISSUES INCREASE DEPARTMENT ASSISTANT II TO FULL -TIME BUDGETED ' PROPOSAL This proposal is to increase the 50% Part -time Department Assistant II position to a full-time (100 %) Department Assistant II position. The Refuse Division currently has one 100% Department Assistant II ' position and one 50% part -time Department Assistant II position budgeted to provide all clerical duties for the division. The implementation of the new Utility Billing System in 2010 has created significant ' changes in the process used to complete service orders relating to customer accounts. These changes have considerably increased the workload of the Department Assistants. They are responsible for entering data into the Utility Billing system from service orders relating to cart and bin deliveries, ' removals, exchanges; cart repairs; service call -backs and special hauls. Data noted by the drivers in the Refuse route books for overfilled carts, services that are not out on time for collection and other related information regarding accounts are also added to the Utility Billing system. Accuracy and timeliness of this data are essential for proper billing of the accounts. A growing number of code enforcement matters reported to and handled by the Refuse Division are documented and completed by the ' Department Assistants. The Department Assistant II positions work with organizations in coordinating recycling for special events, distribute leaf bags for the Fall Leaf Collection Program and maintain communication with customers and field personnel by phone and two -way radios. ' IMPACTS ' 1. Fiscal Impact - 100% Department Assistant II salary and benefits $43,200 50% Department Assistant II salary and benefits (25,450) Net Increase $17,750 ' 2. Proposed Funding Source - Refuse Division Operating Fund. Additional revenue from new annexation customers will also support this staffing increase. ' 3. Public Impact - Current data collected from the service orders will be quickly entered into the Utility Billing system, increasing the accuracy of the billing. Better communication will ' be available between office staff and the public regarding service requests, questions and concerns. ' 4. Personnel Impact - Increase the 50% Department Assistant II position to 100 %. ' 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 1 7. Viable Alternatives - None. CONCLUSION AND /OR STAFF RECOMMENDATION ' This is a Council policy decision. Other Policy Issues • Section V — 21 CITY OF Ya. lanit PUBLIC WORKS / TRANSIT 2012 POLICY ISSUES PURCHASE THREE USED 30 FOOT BUSES BUDGETED • PROPOSAL ' This Transit Capital purchase request provides the funding required for the purchase of 3 half life 30 -foot heavy -duty replacement buses. The purchase price of these buses is $100,000. The new purchase price of this type of bus is around $350,000 each for a total of $1,050,000. ' IMPACTS 1. Fiscal Impact — $100,000 (all local funds) 2. Proposed Funding Source — Local sales tax/Transit Capital fund. 3. Public Impact — Preserve the ability to adequately carry current and projected passengers on busiest routes. 4. Personnel Impact — None. ' 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — Keep maintaining the older more costly coaches that are past their useful age. CONCLUSION AND /OR STAFF RECOMMENDATION Staff recommends expanding the bus fleet by 3 half life 30 -foot coaches to accommodate the new start up service between Yakima and Ellensburg. 1 1 22 - Section V • Other Policy Issues , CITY OF Y PUBLIC WORKS / TRANSIT ' 2012 POLICY ISSUES PURCHASE NINE VANPOOL VANS ' BUDGETED PROPOSAL This Transit Capital purchase request provides the funding required for the purchase of 6 replacement vanpool vans and 3 additional vanpool vans. The purchase price of these vehicles is $300,000. ' IMPACTS 1. Fiscal Impact - $75,000 (In -kind matching funds) ' 6 Replacement vans $200,000 3 Additions to fleet 100,000 ' Total $300,000 2. Proposed Funding Source - 75% grant funds and 25% local sales tax. ' 3. Public Impact - Preserve and expand the ability to adequately accommodate the current and projected Vanpool passenger load. ' 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. ' 7. Viable Alternatives - Continue to use the current equipment that is available to Yakima Transit. Although, the current fleet is very old and very expensive to maintain. ' CONCLUSION AND /OR STAFF RECOMMENDATION Staff recommends replacing up to 5 oldest vanpool vans with 5 new vanpool vans to accommodate the current and projected vanpool passenger load. ' Other Policy Issues • Section V — 23 CITY OF Yea PUBLIC WORKS / TRANSIT 2012 POLICY ISSUES TRANSIT CENTER CANOPY BUDGETED ' PROPOSAL ' A canopy will be installed at the Downtown Transit Center for the protection of the transit patron from the elements. Transit would be allocating $150,000 for the primary phase of the two step project. The cost of the second phase is expected to be at or below the cost of the primary phase. ' IMPACTS 1. Fiscal Impact - $150,000 (all local funds) 2. Proposed Funding Source - Local sales tax. 3. Public Impact - Improves the safety and comfort of the transit patrons. , 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - None. ' 6. Legal Constraints, if applicable - None. ' 7. Viable Alternatives - By not installing the canopy, the passenger would have to endure the elements as they have done in the past. ' CONCLUSION AND /OR STAFF RECOMMENDATION Staff recommends installing the canopy at the Transit Center to improve the safety and comfort of the transit patrons. 1 24 — Section V • Other Policy Issues ' CITY OF Y I PUBLIC WORKS / EQUIPMENT RENTAL 2012 POLICY ISSUES FLEET VEHICLE ADDITIONS & REPLACEMENTS I BUDGETED I PROPOSAL Replace or increase the Equipment Rental fleet per the included listing below. Fire, Police and I Transit rolling stock are managed separately by the respective departments. Vehicle replacement is determined by maintenance costs, usage, and technical service need. I 2012 Fund Division Description Replacing Budget Total Streets & Traffic 3 /4 Ton Pickup with Snowplow ER 2209 45,000 I 3 /4 Ton Pickup with Snowplow ER 2229 45,000 Elgin Street Sweeper ER 3224 185,000 Cimline Magma 2300D Crack Sealer ER 4192' 60,000 I Used 38' Bucket Truck ER 2157 45,000 Graco Direct Drive Line Striper Laser Addition 8,500 388,500 I Water & Irrigation 1 /2 Ton Pickup ER 2170 30,000 30,000 Refuse Automated Sideloading Refuse Truck ER 3181 315,000 Automated Sideloading Refuse Truck ER 3145 315,000 630,000 I Wastewater Ford Escape Hybrid AWD ER 2183X 35,000 3 /4 Ton Cab & Chassis w /Service Body ER 2233 45,000 Ford Transit Connect Cargo Van ER 3141 25,000 105,000 Total $1,153,500 The chart below details the condition of the vehicles and equipment being replaced: I Current Years Lifetime RepL I Equip. Model in Mileage / Suitability for Maint. Original Cost Division Number Description Year Service Hours Condition Service Costs Cost Estimate Streets & Dodge 3/4 Ton 4x4 Pickup Traffic ER 2209 with Snowplow 1999 13 86,219 Poor Unreliable $31,675 $26,170 $45,000 I Dodge 3/4 Ton 4x4 Pickup ER 2229 with Snowplow 2001 11 72,914 Poor Unreliable $28,739 $24,496 $45,000 Elgin Crosswind Street I ER 3224 Sweeper 2006 6 31,919 Poor Worn out $99,752 $143,591 $185,000 (Used) Cimline Magma High ER 4192* Melter 230 DH (2006) 2002 6 2,221 Hrs Fair Maintenance $52,348 $21,500 $60,000 Chevrolet 3/4 Ton 4X2 ER 2157 Pickup" 1994 18 69,330 Fair Unsuitable $15,159 n/a $45,000 Graco Direct Drive Line ER 5219* Striper Laser 2000 12 n/a Poor Badly worn $980 $4,865 $8,500 I I I Other Policy Issues • Section V - 25 Current Years Lifetime Repl. Equip. Model in Mileage / Suitability for Maint. Original Cost Division Number Description Year Service Hours Condition Service Costs Cost Estimate Water & Irrigation ER 2170 1/2 Ton 4X2 Pickup 1996 16 41,235 Fair Unsuitable $11,821 $16,227 $30,000 Current Years Lifetime Repl. Equip. Model in Mileage / Suitability for Maint. Original Cost Division Number Description Year Service Hours Condition Service Costs Cost Estimate Automated Sideloading Needs Refuse ER 3168 Refuse Truck 2004 9 85,495 Fair rebuilding $176,816 $183,525 $315,000 Automated Sideloadng Needs ER 3187 Re fuse Truck 2005 8 70,982 Fair rebuilding $175,824 $188,361 $315,000 Current Years Lifetime RepL Equip. Model in Mileage / Suitability for Maint. Original Cost Division Number Description Year Service Hours Condition Service Costs Cost Estimate Not for Wastewater ER 2183X Che vrole t As trovan AW D 1997 15 60,901 Fair primary use $11,846 $22,559 $35,000 Dodge 3/4 Ton 4x4 Pickup ER 2233 with Snowplow 2001 12 101,084 Poor Unreliable $26,086 $23,177 $45,000 ER 3141 Chevrolet Cargo Van 2001 11 113,175 Poor Unreliable $18,511 $23,348 $25,000 IMPACTS 1. Fiscal Impact - $1,153,500 from the accumulated reserve dedicated for this purpose. 2. Proposed Funding Source - The Equipment Replacement Fund for replacements and limited REET2 contributions for the addition. 1 3. Public Impact - Delaying purchase would ultimately reduce ability to provide respective services to the community and shift operating costs to Fleet Maintenance. 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - Delaying these purchases is an option, though excessive maintenance costs would shift expense to Fleet Maintenance budget. CONCLUSION AND /OR STAFF RECOMMENDATION Approve purchase of the Capital Equipment roster above. 26 — Section V • Other Policy Issues ' I 1 I Exhibit I I Three -Year Budget Comparison 1 1 1 1 1 1 1 1 1 1 1 1 1 S M - I NM I= • M i - MO - M I M -- I THREE -YEAR BUDGET COMPARISON - 2012 BUDGET BY CITY FUNCTIONAL GROUPING 2010 2011 2011 2012 2012 2012 2012 2012 Actual Amended Year -End Preliminary vs 2011 Beginning Projected Est. Ending Expenditures Budget Estimate Budget Amended Fund Balance Revenue Fund Balance General Government City Council $197,013 $203,061 $192,878 $205,214 1.1% City Manager 502,075 509,913 506,427 529,576 3.9% State Examiner 92,528 103,000 101,000 106,000 2.9% Records 422,071 411,556 409,976 468,842 13.9% Financial Services 1,350,881 1,386,046 1,368,211 1,421,433 2.6% Human Resources 431,156 447,436 474,066 517,627 15.7% Legal 1,057,092 1,139,157 1,107,397 1,127,156 (1.1 %) Municipal Court 1,206,063 1,234,194 1,177,814 1,256,178 1.8% Purchasing 415,042 452,835 452,835 527,330 16.5% Hearing Examiner 62,537 39,500 39,500 31,000 (21.5 %) Environmental Planning 699,196 678,679 665,608 647,063 (4.7 %) Code Administration 1,449,452 1,330,361 1,270,641 1,219,611 (8.3 %) Indigent Defense 467,697 480,000 480,000 481,000 0.2% Police 22,045,777 22,718,620 22,283,841 22,581,273 (0.6 %) Fire 9,255,216 8,929,340 8,794,947 9,063,694 1.5% co Police Pension 1,368,431 1,404,590 1,389,650 1,186,350 (15.5 %) o Engineering 954,014 757,250 748,588 759,589 0.3% A City Hall Maintenance 380,399 352,127 350,049 350,961 (0.3 %) o Information Systems 2,268,763 2,568,136 2,521,528 2,370,823 (7.7 %) c.z> s. Utility Services 1,119,629 1,305,084 1,295,207 1,342,080 2.8% m n Intergovernmental 372,948 257,439 257,439 237,395 (7.8 %) ° s Nonrecurring Expenses 0 208,287 208,287 0 (100.0 %) s Transfers 2,412,206 2,412,275 2,325,275 2,331,275 (3.4 %) o Total General Fund $48, 530, 186 $49 ,328,886 $48,421,164 $48,761,470 (1.2 %) 4,226,072 48,736,110 4,200,712 • Parks &Recreation 4,062,236 4,042,938 4,042,476 4,050,111 0.2% 341,093 4,049,765 340,747 RI Street & Traffic Operations 5,337,910 5,218,691 5,212,161 5,055,371 (3.1 %) 1,045,092 5,055,310 1,045,031 s. a' Total General Government Funds $57,930,332 $58,590,515 $57,675,801 $57,866,952 (1.2 %) 5,612,257 57,841,185 5,586,490 th N N I rr 2010 2011 2011 2012 2012 2012 2012 2012 Actual Amended Year -End Preliminary vs 2011 Beginning Projected Est. Ending th Expenditures Budget Estimate Budget Amended Fund Balance Revenue Fund Balance • Other Operating/Enterprise co Economic Development $223,983 $669,372 $321,428 $305,517 (54.4 %) $225,990 $227,000 $147,473 ro Community Development 4,104,770 4,144,772 4,063,080 1,839,530 (55.6 %) 891,338 1,800,901 852,709 A Community Relations 513,131 656,954 655,467 613,116 (6.7 %) 741,642 494,950 623,476 to Community Services 64,387 108,215 82,320 0 (100.0 %) 0 0 0 ° co ° Growth Management 23,144 26,601 26,601 0 (100.0 %) 0 0 0 Q Cemetery 245,460 262,463 261,456 265,699 1.2% 57,860 243,550 35,711 A Emergency Services 1,093,525 1,121,904 1,121,696 1,199,489 6.9% 64,553 1,196,026 61,090 o• Public Safety Communications 3,068,448 3,341,497 3,302,790 3,551,694 6.3% 296,553 3,402,343 147,202 Police Grants 914,321 1,341,682 1,275,792 1,101,962 (17.9 %) 507,148 1,161,870 567,056 Downtown Improvement District 204,638 236,451 236,451 235,962 (0.2 %) 26,712 251,340 42,090 Trolley (Yakima Interurban Lines) 150,422 135,277 99,940 11,368 (91.6 %) 16,177 1,576 6,385 Front St Business Impr Area 3,248 5,000 5,000 5,000 0.0% 6,153 3,535 4,688 Tourist Promotion 1,442,044 1,400,148 1,400,149 1,447,373 3A% 162,915 1,443,450 158,992 Capitol Theatre 284,749 285,527 285,527 346,200 21.2% 99,527 324,177 77,504 PFD Revenue - Convention Center 641,133 605,000 605,000 673,000 11.2% 205,668 645,750 178,418 Tourist Promotion Area 388,980 378,205 378,205 586,000 54.9% 414 586,000 414 PFD Revenue - Capitol Theatre 493,964 468,000 468,000 517,000 10.5% 53,357 500,500 36,857 Recovery Program Grants 387,011 426,989 419,426 0 (100.0 %) 0 0 0 Storm Water Operating 1,801,236 2,225,207 2,223,899 1,942,945 (12.7 %) 678,053 2,035,000 770,108 Transit 7,209,479 7,472,066 7,408,235 7,697,952 3.0% 1,007,710 7,302,972 612,730 Refuse 4,802,640 4,980,373 4,834,165 5,117,429 2.8% 407,423 4,987,190 277,184 Sewer Operating 17,574,185 18,830,904 18,653,200 18,415,827 (2.2 %) 1,362,893 18,094,562 1,041,628 Water Operating 7,648,497 7,895,628 7,857,912 7,774,375 (1.5 %) 1,620,989 7,714,485 1,561,099 Irrigation Operating 1,862,091 1,541,669 1,541,359 1,444,933 (6.3 %) 340,406 1,618,700 514,173 Equipment Rental 4,915,678 5,633,318 5,566,068 5,290,111 (6.1 %) 4,265,680 5,432,333 4,407,902 Environmental Fund 388,824 485,934 469,950 192,950 (60.3 %) 285,071 150,000 242,121 Public Works Administration 1,046,827 1,169,153 1,128,240 1,185,273 1.4% 405,894 1,185,331 405,952 Total Other Operating/Enterprise $61,496,815 $65,848,309 $64,691,356 $61,760,705 (6.2 %) $13,730,126 $60,803,541 $12,772,962 a■i - MN r MI - ME Mg - MI - r- r - - r r NM NM MI • • Il MI =- OM i MI I I - M I r I • Capital Improvement Arterial Street $3,383,341 $4,811,547 $3,222,153 $1,854,478 (61.5 %) $227,413 $2,027,351 $400,286 C.B.D. Capital Improvement 1,048,433 132,264 112,255 132,277 0.0% 412,939 39,200 319,862 Capitol Theatre Construction 4,439,534 65,045 65,000 0 (100.0 %) 59,227 0 59,227 Yakima Revenue Devt Area 0 800,000 800,000 850,000 6.3% 0 850,000 0 Parks & Recreation Capital 673,520 1,492,770 1,464,000 80,000 (94.6 %) 99,295 0 19,295 Fire Capital 1,355,703 841,500 839,459 196,459 (76.7 %) 221,892 126,072 151,505 Law & Justice Capital 895,634 1,154,231 1,152,804 732,134 (36.6 %) 238,207 506,344 12,417 Public Works Trust Construction 910,805 744,411 675,827 718,382 (3.5 %) 647,991 548,906 478,515 REET 2 Capital Construction 751,048 1,236,822 941,822 506,822 (59.0 %) 280,126 452,000 225,304 Storm Water Capital 153,485 1,024,794 1,023,849 433,000 (57.7 %) 452,541 244,794 264,335 Transit Capital Reserve 2,281,234 971,556 720,000 1,393,000 43.4% 861,134 910,000 378,134 Convention Center Capital Impr 574,541 525,143 525,143 150,000 (71.4 %) 281,880 180,500 312,380 Cum. Reserve for Capital Impr 7,405,455 14,872,978 14,210,547 8,917,000 (40.0 %) 3,112,037 6,067,166 262,203 Wastewater Facilities Capital Rsv 799 50,000 50,000 50,000 0.0% 728,516 150,500 829,016 Sewer Construction 467,928 4,768,500 4,009,610 3,800,000 (20.3 %) 2,389,311 2,850,000 1,439,311 Domestic Water Improvement 351,248 3,902,000 1,807,000 4,450,000 14.0% 3,474,486 4,600,000 3,624,486 Wastewater Facilities 2,423,131 13,800,879 9,383,879 8,145,000 (41.0 %) 5,217,095 6,121,000 3,193,095 Irrigation System Improvement 2,470,183 2,041,017 1,969,434 4,115,554 101.6% 2,083,314 2,708,500 676,260 Total Capital Improvement $29,586,022 $53,235,457 $42,972,782 $36,524,106 (31.4 %) $20,787,404 $28,382,333 $12,645,631 Contingency /Operating Reserves co Contingency Fund $46,356 $200,000 $127,614 $200,000 0.0% $157,750 $50,000 $7,750 et 'ro FRS /Capitol Theatre Reserve 71,927 71,927 71,927 71,927 0.0% 310,338 500 238,911 Risk Management 3,014,749 9,630,681 2,856,845 9,914,055 2.9% 864,254 9,961,000 911,199 to Wi Total Contingency /Operating Rsys $3,133,032 $9,902,608 $3,056,386 $10,185,982 2.9% $1,332,342 $10,011,500 $1,157,860 P Employee Benefit Reserves A Unemployment Compensation $188,121 $312,477 $206,077 $317,213 1.5% $324,387 $173,000 $180,174 o' Employees Health Benefit 10,364,643 11,026,761 10,939,980 11,217,959 1.7% 1,991,005 11,243,185 2,016,231 o Workers' Compensation 1,222,828 1,352,030 1,271,189 1,362,367 0.8% 1,124,244 1,114,600 876,477 ro Wellness /EAP Fund 63,896 79,885 63,885 92,000 15.2% 143,483 60,000 111,483 Q; Firemen's Relief & Pension 1,547,509 1,609,960 1,437,660 1,344,057 (16.5 %) 812,358 1,387,500 855,801 y Total Employee Benefit Reserves $13,386,997 $14,381,113 $13,918,791 $14,333,596 (0.3 %) $4,395,477 $13,978,285 $4,040,166 w 1 k 2010 2011 2011 2012 2012 2012 2012 2012 ~ Actual Amended Year -End Preliminary vs 2011 Beginning Projected Est. Ending v Expenditures Budget Estimate Budget Amended Fund Balance Revenue Fund Balance Trust and Agency Funds Cemetery Trust $10,050 $5,500 $5,500 $5,500 0.0% $603,099 $16,500 $614,099 rt ro co YakCorps Agency Fund 0 163,629 142,599 497,725 0.0% 21,030 526,756 50,061 -t Total Trust and Agency Funds $10,050 $169,129 $148,099 $503,225 197.5% $624,129 $543,256 $664,160 co Debt Service o L.I.D. Guaranty $0 $0 $0 $0 n/a $80,087 $50 $80,137 A PFD Debt Service 1,014,286 1,014,136 1,014,136 1,018,253 0.4% 170,564 1,019,594 171,905 General Obligation Bonds 2,225,916 2,335,941 2,221,941 2,331,083 (0.2 %) 370,920 2,334,739 374,576 0 L.I.D. Debt Service 361,912 285,000 285,000 285,000 0.0% 14,243 274,000 3,243 Water- Irrigation /Sewer Bonds 2,863,041 2,862,054 2,862,054 2,636,124 (7.9 %) 2,372,254 2,638,249 2,374,379 Total Debt Service $6,465,155 $6,497,131 $6,383,131 $6,270,460 (3.5 %) $3,008,068 $6,266,632 $3,004,240 Total City Budget $172,008,403 $208,624,262 $188,846,346 $187,445,026 (10.2 %) $49,489,803 $177,826,732 $39,871,509 r- r r- MN NM - 11111 NEI r- 11111 r- MN NM UN - I 1 1 Exhibit II 1 What You Pay and What You Get 1 1 1 1 1 1 1 1 1 1 1 1 1 WHAT YOU PAY AND WHAT YOU GET I This section is presented to assist the reader in understanding the taxes they pay, what I governmental entity receives those tax revenues and how the City spends their allocated portion. Enclosed, you'll find charts and graphs which identify how much of the taxpayers' dollar comes to the City and what percentage of the City's total revenues each type of tax / charge represents. Also I included is (a) an outline of the City taxes and utility charges collected from a typical Yakima household; (b) a depiction of how those revenues are then distributed between the various City services / functions and (c) the amount a typical four person household pays for these services. I I MAJOR TAXES PAID Sales and Use Tax I There is an 8.2% sales tax charged on the sale of goods within the City. The vast majority of this revenue is allocated to the State, not the City. The State receives 6.50% while the City receives .85% for the general fund and an additional .30% that is restricted for transit services. .15% goes directly I to the County, and .40% represents countywide taxes for Criminal Justice that is allocated between Cities and the County. (Refer to the following chart for a complete detailed listing of how this revenue is allocated.) I Following s an example of how the sales taxes paid by the consumer are allocated between the City g p p Y t3' I and the State. Based on the assumption that a family with a taxable income of $40,000 will spend $10,000 on items on which sales tax will be applied, they will pay approximately $820 in sales taxes annually. Of this amount, 14.0% or approximately $115 goes to the City ($85 or .85% for general I fund and $30 or 0.3% for transit services). The following chart depicts how much of each dollar of sales tax revenue is allocated to the State, II the City and the County. ALLOCATION OF SALES TAX COLLECTION I State of Washington Yakima nsit 79 3.7¢ Tra 1 -. °" `, ... r s 4 a iec a...... - � , - `� � -.a ceMYS,el TH*tr$EREH.{66CERG 77 ,-, INYHET .4_,z. \` i .�' f1 4 1 1,,}- ' p'�33�J) �i. (I 'I I i 1 s, '' ,„ A22123565 / q � rA , ai .. DwHEN $ 1 1 1 , li ,( I. i .44 i ' .I A22123565 l T " ! City of Yakima I (General Fund) County 103¢ 6.7¢ 1 What You Pay and What You Get • Exhibits - 5 1 SALES TAX RATES WITHIN YAKIMA CITY LIMITS (In descending order by total allocation) Percent Example Rate of Total ($100 Sale) I State of Washington 6.50% 79.27% $6.50 City of Yakima (General Fund) (1) 0.85% 10.37% $0.85 Yakima Transit 0.30% 3.66% $0.30 Yakima County (Current Expense Fund) (1) 0.15% 1.83% $0.15 1 Yakima County Criminal Justice (2) 0.40% 4.88% $0.40 Total Sales Tax Rate in City Limits 8.20% 100.00% $8.20 (1) The City charges 1 %; however, the county receives .15% of the cities' sales tax collections. (2) This tax is allocated among the cities and the county to support Criminal Justice uses. Property Taxes The total property taxes paid by property owners within the City of Yakima include taxes levied by I several governmental entities: the State, School Districts, special county -wide voted levies and the City's general and special voter approved levies. The percentage of the total property taxes levied by, and allocated to, each individual governmental entity will change slightly from year to year. 1 The City's portion is generally under 30% of the total amount collected. (Refer to the graph and chart below for how the 2011 property taxes were allocated between these governmental entities.) 2011 PROPERTY TAX DISTRIBUTION Yakima School District State of Washington Schools Library 037 0 .04¢ l J ; . THIS LERTIFIEST/1 ATTHQtE HAS DWI P POStt[b I7111 NE TAEASUAY OE 4 D A' ; � r A 1.22123565 A i _.l ' 1 2'.'" ' Tr: I qF' 1 ( I J1 f � z SSYCA ( { s UI i (7` l , 1 , A22123565 A ','�. k, 1 i" ' sisal .R Dt)I.I 1,." ;.a(_ 1 City of Yakima Yakima County EMS .254 .13¢ .02¢ City of Yakima Property Tax — In 2011, a typical City resident pays approximately $11.87 per thousand of assessed value on property taxes. Only $2.99, or about 25.0 %, goes to the City, with the , balance divided between the County, schools, and other special districts. Description Of How Property Taxes Are Levied — The following explanation is included to help I the reader understand how property taxes are assessed to the individual property owners. To aid in this explanation, three commonly used terms must be understood. They are Property Tax Levy, Property Tax Rate and Assessed Value. J 6 — Exhibits • What You Pay and What You Get 1 1 > Property Tax Levy - is the total amount of money that is authorized to be collected. ➢ Property Tax Rate - is the property tax amount that will be applied to every $1,000 of I assessed value; the rate is determined by simply dividing the levy amount by the total assessed value amount and dividing that number by 1,000. > Assessed Value - is the total value, as determined by the County Assessor's Office, of all 1 property within the City. 1 All taxing jurisdictions annually set the levy (i.e. amount of tax) in accordance with the limitations set by state law. The County Assessor then takes the levied amount and divides it by total assessed value to arrive at the rate /$1,000. II In other words, an increase in assessed value does not affect the total amount levied or collected by the governmental entity. Nor does it automatically affect the amount the property owner must pay. The 1 dollar amount of the levy is restricted by law - the assessed value is simply the means to allocate the total dollars among the property owners. A change in one property owner's assessed value will affect his / her property tax bill only if the change is significant enough to change that property owner's I percentage of the total assessed value of all property within the taxing districts. (Example: if the amount of property tax levied does not change from one year to the next, and every property owner's I assessed value goes up 3 %, there will be no change in the property tax owed by any of the property owners. This is due to the fact that everyone's assessed value increase by the same amount; therefore, every property owner's percentage of the total tax levy remained the same.) I PROPERTY TAX CODE AREA #333 (YAKIMA SCHOOLS) - CONSOLIDATED LEVY AND RATES 2010 ASSESSED VALUATION - 2011 TAX YEAR I Amount Percent 2010 2011 of I Property Tax Levy Rate Levy Levy City Levy General Fund $1.7646 $9,880,342 I Parks & Recreation $0.2761 $1,546,000 Street & Traffic Operations $0.6274 $3,513,000 Firemen's Relief & Pension $0.2504 $1,402,000 I Total Operating Levy $2.9185 $16,341,342 24.6% Total Bond Levy $0.0530 $293,000 0.4% Total City Levy $2.9715 $16,634,342 25.0% I Other Levies Yakima School District #7 Operation & Maintenance $2.8906 $15,961,685 37.2% I Bond Redemption $1.5335 $8,467,877 State Schools $2.2087 $12,367,125 18.6% Library $0.4529 $2,535,913 3.8% I Yakima County $1.4713 $8,238,218 13.5% Yakima County Flood Control $0.0855 $478,738 Juvenile Justice Bond $0.0489 $270,022 EMS Levy $0.2148 $1,202,725 1.8% T otal Other Levies $8.9062 $49,522,303 75.0% Total Levy Code #333 $11.8777 $66,156,645 100.0% 1 What You Pay and What You Get • Exhibits — 7 City Taxes and Utility Char I t3' t3' es g The taxes and utility charges shown in the following charts are only those directly levied by the City. In the cases of sales and property taxes, the 2 major taxes paid directly by Washington residents, only a small portion of the total tax belongs to the City. To illustrate what a typical household might pay, the following assumptions were made. Property tax III based on $120,000 home; Sales tax based on $42,000 annual income and $10,500 taxable purchases; Utilities based on 96 gallon can for Refuse, 1,300 cubic foot monthly consumption for Water / Sewer; 1 Irrigation for 7,000 square foot lot; Stormwater based on impervious surface; Gas / electricity $3,000, telephone $960, cable television $600. Based on these assumptions, a typical household in Yakima paid approximately $205 a month, or $2,458 a year, as depicted in the following charts. 1 ANNUAL TAXES AND UTILITY CHARGES LEVIED I BY THE CITY OF YAKIMA ON THE TYPICAL HOUSEHOLD FOR 2011 Rate Cost Per Revenue Per 1,000 Household 1 Property Taxes - General $2.9185/1,000 $350 Special Levy Property Taxes $0.0531/1,000 6 Sales Tax - General 121 1 Transit Sales Tax 32 Tax on City-owned Utilities - General 157 Tax on Private Utilities - General 274 1 Utility Charges (W ater/W astewater/Refuse) - Exc. Utility Tax 1,244 Stormwater 43 Irrigation Assessment 231 $2,458 CITY TAXES AND UTILITY CHARGES COST TO TYPICAL HOUSEHOLD — $2,458 ANNUALLY Irrigation 1 $231 Refuse $351 WS ata rnm General Goveent 308 $77 Streets Depa .. t $64 Storm Water / $43 Parks r . artme[tt j / $51 apical Project Funds _ $29 Transit Division "W�, , Other $32 $129 Ill min Wastewater Public Safety Other Special Revenue Funds Debt Service Funds $15 Special Levy Debt $6 III 1 $585 $638 I 8 - Exhibits • What You Pay and What You Get I GENERAL GOVERNMENT REVENUE The total 2012 proposed General Government Revenue Budget is approximately $57.8 million. I The following chart breaks this dollar amount down by the source of the revenue. You'll note that three revenue sources - sales tax, property tax and franchise and utility taxes - generate over 72% 1 of the total general fund revenues. GENERAL GOVERNMENT REVENUE 1 (BASED ON 2012 BUDGET OF $56.8 MILLION) I 20.7t 6.8¢ 3.3¢ 26.3¢ Franchise & Intergovernment & Other Sales Tax Utility Tax State Shared Revenue Revenue ($15.2 Million) ($12.0 Million) ($3.9 Million) (1.9 Million) T IS :7tIL9 TNATTNiRE MAGG t:N PS►7iRm1N THE TREASYI MOi orek li ;. A2212 !3565 A 1 `t r. tii a t i rN 1 ' �� i f 1 1 3 so S promM . pc - I - I 5 . A 22123 ' i 6 5 A ; . ,, a , wA.„m W,n�:.vt,. K,. 1 A . r�< T � O ..i: r - - 'L ��.,u < <'�l a. ./ writ r 1 J tr. m x i" u i 25. 11.8¢ 5.2e Property Tax Licenses, Permits Fines & ($15.0 Million) & Charges Other Taxes for Services ($3.0 Million) I ($6.8 Million) Note: The term "General Government" refers to basic tax supported functions. The major 1 functions included in this category are: Police, Fire, Streets and Traffic Operations, Parks and Recreation and Municipal Court services. These functions use about 72.6% of General Government I revenues. Other administrative services include Information Systems (i.e. computer support), Legal, Finance, Purchasing and Human Resources - services necessary for any organization to function. 1 GENERAL GOVERNMENT EXPENDITURES 1 The following chart depicts the breakdown of the proposed 2012 general government expenditure budget. This breakdown identifies that the City spends over 66% (or approximately $38.7 million) of its available resources on providing public safety services (Police, Municipal Court, Fire, Code 1 1 Enforcement and Dispatch services). Additionally, the City allocates over 8.7% of its resources to maintaining and operating the Streets and Traffic Systems and another 7.0% to provide Parks and I Recreation programs and services. Providing the existing services in these four basic categories takes 82.6% of all the City's available general government resources. 1 1 What You Pay and What You Get • Exhibits - 9 Providing the services in these four critical areas is labor intensive; approximately 71.9% of these I costs are personnel related. Therefore, any significant budget reductions in these areas will require a reduction in personnel and the related services these individuals perform. Conversely, any 1 significant reductions in the overall general government budget that do not include these four largest areas of the budget will severely limit the services the remaining departments will be able to provide (i.e.: Financial (including Information Technology), Legal, Community Planning and Project Engineering and Administration). Breaking down the City's general government budget by these major service areas and identifying 1 the percentage of each available dollar that the City allocates to each of these areas provides the reader with a visual picture of where the focus and priorities of the City have been placed. I Additionally, this chart will assist the reader in understanding the difficult challenges facing the City should it become necessary to implement a significant reduction in the City's proposed budget without affecting the public safety budget and services. 1 GENERAL GOVERNMENT EXPENDITURES (BASED ON 2012 BUDGET OF $56.7 MILLION) 1 46.9¢ 8.7¢ 7.0¢ 2.5¢ Police & Streets & Parks & Community Planning ' Courts Traffic Recreation Project Engineering $27.1 Million $5.1 Million $4.1 Million $1.4 Million t _ „ 1 1' J .. m - THIaC rfl ICSTHATTHEREH ES pLLN- LP03Y tN TH E U+ R O ' ? , I iwo_ a1 eF ors er uaw // r ; ' 1f A A 2123 fi5 A a j 1 t ' , ' : - x ' 7 i l �a -�- �'� 0,,,,,,„ l7 L I O R ` ., 86Uir I y 0 -, J 4 1 A 1 22123565 A ,, x ' ' / 9 ! wASll7lmltT't p c , K ti .. r:1T .'M Clr ..eltt le a_ I � ' m . a ' ....r .. — , O N E SIT 11.. wRR 11OLI g..a.x.A I # I 20.0¢ 7.8¢ 7.1¢ Fire / Code Financial & Governance/ Enforcement Legal Services Administration $11.6 Million $4.5 Million $4.1 Million Allocation of Expenditures Following is a detailed analysis of the City of Yakima's local tax structure. This analysis shows the various sources of City revenue and identifies what type of services these revenues will fund in I 2012. Additionally, this analysis reflects the cost of each of these services to a typical household. The non -tax funding sources identified include all sources except directly levied taxes (shown in 11 the adjacent column) which are property, sales and utility taxes. The non -local tax amounts are made up of direct charges for services, state shared revenues, grants, interfund charges, beginning 1 balances, and other miscellaneous sources. 1 10 — Exhibits • What You Pay and What You Get 1 1 Municipal public safety services consume the greatest share of local taxes, $638 per household per year, or 70.8% of the total general taxes paid. Other General Government services cost $77 per I household annually, or 8.5 %. Streets and Parks together cost $115 per household annually, or 12.7% of general taxes paid. I The utilities combine to cost approximately $1,244 annually per household. (Many of the costs included in the budgets of the utilities fund State and Federal mandates that local citizens must i pay.) ALLOCATION OF TAXES AND UTILITY CHARGES I (BASED ON 2012 PROPOSED BUDGET - BUDGET NUMBERS IN THOUSANDS) 2012 I 2012 Non -Tax Allocation Household Permanent Proposed Funding Local of Taxes Typical Budgeted Tax Supported Functions Budget Sources Taxes Collected Cost Positions I Local Direct General Purpose Tax Supported Functions Public Safety $41,285 $6,755 $34,530 70.8% $638 311.00 (Police Fire & Pensions) I General Government 14,679 10,523 4,156 8.5% 77 133.75 Streets Department 5,055 1,599 3,456 7.1% 64 35.00 II Parks Department 4,050 1,318 2,732 5.6% 51 20.30 Other Special Revenue Funds 3,522 1,714 1,808 3.7% 33 14.75 Debt Service Funds 3,056 2,228 828 1.7% 15 0.00 I Capital Project Funds 7,219 5,942 1,277 2.6% 24 0.00 Local Direct Special Purpose Tax Supported Functions Special Levy Debt 579 286 293 6 0.00 Transit Division 9,091 4,491 4,600 32 52.00 Non - Local Tax Supported Functions Street Construction 10,771 10,771 0 - 0.00 1 Refuse - 18,767 Residential accounts 5,117 5,117 0 351 20.50 Wastewater- 22,591 Residential accounts 32,172 32,172 0 585 61.81 I Water - 17,349 Residential accounts 12,459 12,459 0 308 31.00 Equipment Rental 5,290 5,290 0 12.00 Public Works Administration 1,185 1,185 0 - 9.00 I Self - insurance Reserve 11,787 11,787 0 - 0.00 Employee Benefit Reserve 11,310 11,310 0 0.00 Irrigation- 10,541 Residential a 6,201 6,201 0 231 8.00 1 PBIA 241 241 0 - 0.00 Storm Water 2,376 2,376 0 43 7.19 I Totals $187,445 $133,765 $53,680 100.0% $2,458 716.30 Based on 2012 cost for a typical four person household: Property tax based on $120,000 home; sales tax based on $42,000 I annual income and $10,500 taxable purchases; utilities based on 96 gallon can for refuse, 1,300 cubic foot monthly consumption for water / sewer; irrigation for 7,000 square foot lot; gas / electricity $3,000, telephone $960, and cable TV $600. 1 1 What You Pay and What You Get • Exhibits -11 TAX BURDEN — FEDERAL VS. LOCAL The Tax Foundation of Washington D.C. publishes a Special Report each April, called "America Celebrates Tax Freedom Day ". This is when Americans will have earned enough money to pay off 1 their total tax bill for the year. Taxes at all levels of government are included, whether levied by the federal government or state and local governments. Tax Freedom Day in 2011 fell on April 11th, two days earlier than it did in 2010, and nearly two weeks earlier than in 2007. On average in 2011, Americans will work 64 days to afford their federal taxes and 37 more days to afford state and local taxes. According to the Foundation's report, "The shift toward a lower tax burden since 2007 has been driven by three factors: 1) The great recession has reduced tax collections even faster than it has reduced income; 2) President Obama and the Congress, after a long debate, extended the Bush -era tax cuts for two additional years; and 1 3) As part of the extension agreement, the Making Work Pay tax credit was replaced with the 2 percent reduction in the payroll tax. The report indicates that Washington State is ranked 5th highest in the nation for per capita taxes paid in 2011. This demonstrates that Puget Sound, with a higher cost of living and commensurately higher salaries, generated high federal income tax payments. (Some of the wealthiest people in the world live in Washington State.) However, estimated at 9.3% of income, Washington's state and local tax burden percentage ranks 29th highest nationally, below the 1 national average of 9.8 %. It also demonstrates how small the state and local tax burden is in comparison to the total taxes paid - at roughly one third of the total tax burden (currently at 26.8 %). For most local with services they need and the ost part, oca taxes cost the least and provide citizens w t the ser s ey n d car e about the most - they have the most direct bearing on their quality of life. This is also the level N. where citizens are most empowered to affect government policy and monitor accountability. There are per capita comparisons presented in the Budget, which contrasts the City of Yakima with other similar cities in Washington State. Yakima is consistently below the average in per capita taxes. 1 1 1 1 1 1 1 12 — Exhibits • What You Pay and What You Get 1 1 1 1 1 Exhibit III 1 Supplemental Information 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 EXHIBIT III — SUPPLEMENTAL INFORMATION 1 TABLE OF CONTENTS 1 1 CRIMINAL JUSTICE ' Criminal J ustice Costs General Government Budgets Criminal Justice Sales Tax SALARY AND BENEFIT COSTS 1 Costs to Total Budget Operating Funds RESOURCE AND EXPENDITURE BREAKDOWN 1 Graphic Portrayal Total Resources — by Category ' Total Resources — by Category and Source Total Expenditures 1 1 1 1 1 1 Supplemental Information • Exhibits —13 1 CRIMINAL JUSTICE 1 1 1 This analysis compares Criminal Justice expenditures to other General Government costs. Criminal Justice costs include: Police Department (including jail costs); Police Pension; Court and Probation costs; Prosecution and Indigent Defense (included in the Legal Department budget) and forty percent of Information Systems budget (the amount dedicated to Law and Justice support). This category also includes one -half of the transfer from the General Fund to the Public Safety 1 Communications Fund for Dispatch and the transfer from the General Fund to Debt Service funds to repay debt borrowed for Criminal Justice purposes. This graph reflects the City's efforts to meet Council's Strategic Priorities. Public safety has been a high priority focus of City Council for the last two decades. 1 1 1 General Government Budgets (1) 2003 Through 2012 2003 2004 2005 2006 2007 Amended Amended Amended Amended Amended Budget Budget Budget Budget Budget General Fund Criminal Justice $19,702,698 $20,061,761 $20,794,116 $22,857,422 $25,014,331 Other 16,913,032 17,476,192 17,862,426 19,557,208 18,856,452 Parks & Recreation 3,620,410 3,832,816 3,905,396 4,074,592 4,199,143 Street/Traffic 5,192,894 4,883,030 5,273,574 5,522,653 5,907,882 Total $45,429,034 $46,253,799 $47,835,512 $52,011,875 $53,977,807 June June June June June 2002 2003 2004 2005 2006 Consumer Price Index 184.1 185.7 190.4 194.8 203.8 (1) Excludes double budgeted transfers between general government funds 1 1 14 — Exhibits • Supplemental Information 1 1 I COSTS VS. OTHER GENERAL GOVERNMENT FUNCTIONS 1 Street/Traffic $5,055,371 Parks & 9.0% I Recreation $4,050,111 7 2% Criminal Justice $27,746,811 49.5% n 1 4,-; �4N i�Y k ti d 1 I Other $19,218,385 34.3% 1 1 1 2008 2009 2010 2011 2012 2012 Amended Amended Amended Amended Preliminary VS 10 Year 10 Year 1 Budget Budget Budget Budget Budget 2011 Increase Increase $26,935,856 $28,471,541 $27,554,732 $28,192,940 $27,746,811 (1.6 %) 46.1% $8,753,863 1 19,782,839 20,240,301 19,912,799 19,279,670 19,218,385 (0.3 %) 23.4% 3,646,634 4,420,906 4,249,796 4,133,782 4,042,938 4,050,111 0.2% 15.6% 545,688 6,213,833 5,686,692 5,308,117 5,218,691 5,055,371 (3.1 %) 4.7% 228,829 1 $57,353,434 $58,648,330 $56,909,430 $56,734,239 $56,070,678 (1.2 %) 30.7% $13,175,014 June June June June June 10 Year 1 2007 2008 2009 2010 2011 Increase 210.6 223.6 219.9 221.7 227.5 25.5% 1 1 I Supplemental Information • Exhibits —15 1 CRIMINAL JUSTICE SALES TAX - .3% EXPENDITURES AND REVENUES 2011 2012 1 2008 2009 2010 Year -End Proposed 1 Actual Actual Actual Estimate Budget I General Fund Police Department Salaries & Benefits (includes overtime) $601,047 $605,694 $659,059 $669,895 $685,470 Miscellaneous (uniform /fuel /travel) 216,920 133,122 31,592 60,000 70,000 Liability Insurance 6,641 6,973 7,322 7,542 8,296 Professional Services/R&M Contractors 14,969 5,363 0 5,000 5,000 I Yakima County Jail Cost 395,818 411,108 436,612 450,000 350,000 Total Police Department 1,235,395 1,162,260 1,134,585 1,192,437 1,118,766 The .3% Criminal Justice funds support six full time Patrol Officers including, all wages, overtime, uniforms, supplies, 1 insurance and training expenses. Additionally, these funds are used for repairs, maintenance, communications and fuel used for additional patrols. A portion of the increased Jail costs are also paid out of this fund. ' Municipal Court Salaries & Benefits (includes overtime) 116,485 168,520 165,745 161,650 185,090 Professional Services 49,518 39,398 33,633 35,000 45,000 Miscellaneous (office supplies /travel /dues) 6,740 12,352 5,513 0 5,000 Total Municipal Court 172,743 220,270 204,891 196,650 235,090 The Criminal Justice funds support two Municipal Court Clerk positions and a 3/4 -time Court Commissioner including all wages, overtime, supplies and training. Additionally, this fund supports building security, interpreter I services and witness and juror fees associated with processing the court's case load. Legal Dept Salaries & Benefits (includes overtime) 127,097 157,253 153,382 160,101 174,039 Professional Services 12,443 5,393 4,576 5,000 5,000 Miscellaneous (office supplies /travel /dues) 2,635 2,770 2,296 3,386 3,350 I Total Legal Department 142,175 165,415 160,254 168,487 182,389 The .3% Criminal Justice Sales Tax is being used to supplement criminal justice functions throughout Yakima County. 111 This money fully funds one Legal Assistant II position, one Assistant City Attorney II position including mandatory continuing legal education expenses and dues and subscriptions for required Associations. Information Systems 1 Salaries & Benefits (includes overtime) 37,895 30,494 28,061 27,566 16,689 Small Tools & Equipment 56,182 0 0 0 0 Miscellaneous 10,493 6,705 22,411 10,000 0 Professional Services/R & M Contractors 903 0 0 0 91,526 Data Processing Equipment 15,704 0 0 0 0 I Total Information System 121,177 37,199 50,472 37,566 108,215 The portion of the .3% Criminal Justice Sales Tax allocated to Information Systems is used to enhance the effectiveness 1 of the law enforcement and other Criminal Justice personnel through the expanded use of technology. Currently, the emphasis is on mobile technology for the patrol officers. A portion of these funds are budgeted for temporary salaries used to support the mobile computing and technology infrastructure that has been expanded and enhanced through I Criminal Justice Tax over the last two years. YAKCORPS member fees have been added to this budget for 2012. 16 - Exhibits • Supplemental Information I 1 1 2008 2009 2010 2011 2012 Year -End Proposed Actual Actual Actual Estimate Budget I Animal Control /Codes Salaries & Benefits (includes overtime) $57,211 $74,789 $67,264 $60,604 $69,039 Misc (uniforms /supplies /fuel /cell phone) 3,671 3,793 1,446 5,858 9,596 I Total Animal Control /Codes 60,882 78,582 68,710 66,462 78,635 The .3% Criminal Justice Funds support one full -time Animal Control Officer including all wages, overtime, supplies 1 and communication necessary for this position. This Animal Control Officer position will be eliminated in 2011. Human Resources 1 Professional Services (employee recruitment) 7,100 6,750 6,000 7,500 7,500 The .3% Criminal Justice funds are used to provide for contract services, testing and other necessary recruitment 1 costs for positions funded by the criminal justice sales tax. General Fund Total Expenditures $1,739,472 $1,670,476 $1,624,912 $1,669,102 $1,730,595 I Other Funds Public Safety Communication I Salaries & Benefits (includes overtime) $129,522 $132,450 $142,863 $131,488 $152,747 Small Tools & Equipment 3,580 6,761 0 0 0 Total Public Safety Communication 133,102 139,211 142,863 131,488 152,747 I Criminal Justice funds allocated to this department are used for additional positions necessary to accommodate the increased workload generated by law enforcement activities. These funds provide for two full -time Dispatcher and temporary support for Police. Law & Justice I Small Tools & Equipment 6,611 12,870 15,268 3,000 0 Operating Equipment 7,931 7,853 5,365 12,000 12,000 Total Law & Justice 14,542 20,723 20,633 15,000 12,000 The .3% Criminal Justice funds support Capital expenses related to the new positions, technology and services created with this tax. I Total Expenditures $1,887,116 $1,830,410 $1,788,408 $1,815,590 $1,895,342 I Revenue $1,901,925 $1,795,873 $1,789,171 $1,816,700 $1,809,500 Revenue over (Under) Expenditures $14,809 ($34,537) $763 $1,110 ($85,842) I Cumulative Balance $325,298 $290,761 $291,524 $292,634 $206,792 1 1 1 Supplemental Information • Exhibits -17 SALARY AND BENEF IT COSTS 1111 1 COSTS TO TOTAL BUDGET The following chart represents the relationship of the City's salary and benefit costs to total budget for General Government and other funds of the City. The City's General Fund ranks the highest with salary and benefit costs, representing 71.2% of total fund expenditures. However, employee compensation and benefit costs for an individual department within the General Fund as a percentage of its total costs range from 31.7% to 93.9 %. In several departments (including Police, i Legal and Information Systems) if contracted services were excluded, the percentage of salary and compensation costs as a percentage of the division total costs would be considerably higher than what is depicted on the following chart. i Parks, Streets and other operations for the most part are more capital intensive, and the ratio of salary and benefits to total costs are representative of that type of operation. Section I includes an analysis based on information gathered by the State Auditor's Office. The chart in this section identifies the per capita salary costs for Yakima and 11 other comparable cities, and indicates that: The City of Yakima spends, on the average, $96 less per capita on salaries than other comparable cities. Yakima employs fewer people per capita than other cities. i To minimize the number of regular employees and to maintain service levels during periods of peak workload demands, the City uses contract and temporary labor when feasible. 1 i 1 i i i 18 — Exhibits • Supplemental Information 1 1 OPERATING FUNDS 1 SALARIES AND BENEFITS AS A PERCENTAGE OF TOTAL DEPARTMENT / FUND BUDGET 2012 I 2012 Salaries & Labor udget Benefits Percentage Police $22,581,273 $16,647,591 73.7% I Fire 9,063,694 7,987,392 88.1% Technology Services 2,370,823 1,687,086 71.2% Financial Services 1,421,433 1,267,343 89.2% I Utility Customer Services 1,342,080 978,758 72.9% Municipal Court 1,256,178 1,007,592 80.2% Code Administration 1,219,611 961,241 78.8% I Legal 1,127,156 993,432 88.1% Engineering 759,589 693,348 91.3% Environmental Planning 647,063 601,676 93.0% I City Manager 529,576 497,476 93.9% Purchasing 527,330 487,135 92.4% Human Resources 517,627 478,317 92.4% I Records 468,842 197,653 42.2% City Hall Maintenance 350,961 111,419 31.7% City Council 205,214 102,814 50.1% I Other General Fund Expenditures 4,373,020 0 $34,700,273 0.0% Total General Fund $48,761,470 3 71.2% Parks & Recreation 4,050,111 1,954,328 48.3% I Street & Traffic Operations 5,055,371 2,537,711 50.2% Total General Government $57,866,952 $39,192,312 67.7% Economic Development 305,517 188,837 61.8% I Community Development 1,839,530 570,086 31.0% Community Relations 613,116 404,061 65.9% Cemetery 265,699 167,051 62.9% I Emergency Services 1,199,489 904,446 75.4% Public Safety Communications 3,551,694 2,745,566 77.3% Police Grants 1,101,962 768,035 69.7% I Stormwater 1,942,945 795,800 41.0% Transit 7,697,952 3,568,039 46.4% Refuse 5,117,429 1,375,773 26.9% I Wastewater Operating 18,415,827 5,144,395 27.9% W a to r Ope rating 7,774,375 2,399,900 30.9% Irrigation Operating 1,444,933 638,822 44.2% I Unemployment Comp Re serve 317,213 28,367 8.9% Employment Health Benefit Reserve 11,217,959 124,807 1.1% Workers Compens a tion Re se rve 1,362,367 109,032 8.0% I Risk ManagementReserve 9,914,055 605,849 6.1% Equipment Rental 5,290,111 881,307 16.7% Public Works Administration 1,185,273 620,518 52.4% Other Funds (Capital/Debt Serv. etc) Total 49,020,628 0 $61,233,003 0.0% tal City - wide Budget $187,445,026 3 32.7% 1 I Supplemental Information • Exhibits - 19 RESOURCE AND EXPENDITURE BREAKDOWN GRAPHIC PORTRAYAL OF CITY RESOURCE CONSUMPTION The purpose of this section is to graphically present total City resources by category, and distribute them by function and type of expenditure for the 2012 budget year. This "flow of resources" ' concept is designed to give the taxpayer a basic understanding of how tax dollars and other revenues are spent in the City. We have eliminated interfund transactions (i.e., those items that flow out of one fund and into another; we refer to these as double budgeted items) in order to 1 portray only external revenue sources available to the City. The broad revenue categories are based upon the State of Washington's mandated accounting 1 structure. A definition of the terms is included below: Borrowings - Proceeds from long -term debt issued by the City. In 2012 this includes primarily a t revenue bond for Wastewater facility improvements and Public Works Trust Fund loans for utility capital needs. , Capital Reserves - Accumulated fund balances set aside for specific capital projects. Charges for Services - Fees charged to outside users to cover the cost of providing services (e.g. utility rates, golf course and swimming pool fees, transit fare box revenues). Intergovernmental Revenues - Revenues received from other governmental agencies (i.e. federal, state, and county). This category includes primarily grants and state - shared revenues (such as gas and liquor tax revenues). Operating Reserves - Accumulated fund balances in operating funds. Prudent reserves generally are 7 -11% of annual operating budgets. Other - All revenue sources which are not included in other categories. This includes primarily ' investment income, program income, fines and forfeitures, and licenses. Taxes - Tax assessments are levied for the support of the governmental entity. Sales tax is the ' largest item in this category. It is followed by property tax, utility and franchise taxes, and various other business taxes. The first graph identifies the total revenue picture by category. The second revenue graph depicts the relationship of the various revenue sources to each function. ' Lastly, included is a graphic by major object (or type) of expenditure, net of double budgeted expenditures. ' 20 - Exhibits • Supplemental Information • ' 1 _ CITY OF /![K6/KLt 1 TOTAL RESOURCES BY CATEGORY 2012 BUDGET 1 1 TOTAL RESOURCES = $174,848,686 (Excludes Internal Service Funds and other double budgeted resources of $52,467,849) 1 Other Capital Reserves $7,315,161 ' $23,159,658 4 . 2 % 13 Taxes .2% $55,030,200 31.5% Operating Reserves ' $16,926,127 9.7% 1 Borrowings $11,500,000 ' 6.6% Intergov't Charges for Services $22,025,021 $38,892,519 12.6% 1 22.2% 1 1 1 1 1 Supplemental Information • Exhibits — 21 1 1 CITY OF TeiLna 1 TOTAL RESOURCES BY CATEGORY AND SOURCE 1 2012 BUDGET 1 Police & Fire 1 Gen Government III I Parks & Recreation 1 1 Street Operations 1 1 Street Construction I Gen Govt Const L 1 G.O. Debt Service I 1 Special Revenue lIl 1 Transit I 1 Utilities 1 ($10.00) $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 1 ❑ Taxes ❑ Intergovernmental ® Charges for Services ❑ Borrowings 1 El Operating Reserves ❑ Capital Reserves • Other 1 22 — Exhibits • Supplemental Information 1 1 1 CITY OF TICKUILQ 1 TOTAL EXPENDITURES 1 BY TYPE 2012 BUDGET 1 1 TOTAL EXPENDITURES = $147,544,903 1 (Excludes double budgeted expenditures of $39,900,122) 1 ' Debt Service $7,945,565 5.4% Capital Salaries ' $32,572,986 $48,560,051 22.1% 32.9% 1 — Intergov't 1 4 .1 $3,735,834 1 2.5% Benefits Other Other Services Supplies $16,619,709 $31,030,888 $7,079,870 11.3% 21.0% 4.8% 1 1 1 1 1 Supplemental Information • Exhibits — 23