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Home My WebLink About11/02/2020 07 2021 Preliminary Budget - First Public Hearing 't..an,gtntj ka 1 E$A dot aY BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 7. For Meeting of: November 2, 2020 ITEM TITLE: First public hearing on the 2021 Preliminary Budget for the City of Yakima SUBMITTED BY: Bob Harrison, City Manager Steve Groom, Director of Finance and Budget SUMMARY EXPLANATION: This is the first public hearing prior to adoption of the 2021 Preliminary Budget. The second hearing is scheduled for November 17, 2020. The Preliminary 2021 Budget, submitted to City Council and reviewed and discussed in Study Sessions on Oct. 6, 8, 13 and 15, is balanced, with a nominal increase to the General Fund reserves of $34.,190. The Preliminary Budget is located here: https://www.yakimawa.gov/services/finance/budget-documents-2/ ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: Conduct the Public Hearing and accept public testimony. ATTACHMENTS: Description Upload Date Type ci co r mama 10/ /20 0 r Me Pc erPoi rat 10/27/2020 r Me 2 ys FINANCE DATE: October 28, 2020 TO: Honorable Mayor and Members of City Council FROM: Bob Harrison, City Manager Steve Groom, Finance Director Kimberly Domine, Finance Division Manager RE: 2021 Proposed Budget Staff respectfully submits the revised 2021 Budget for adoption, following publicly-noticed Study Sessions held on October 6t" 8th, 13th and 15t" for public hearings on November 2nd and 17t". The revised Preliminary 2021 Budget incorporates all the direction given by Council during the October 2020 Budget Study Sessions, as detailed on the last page of this document. The 2021 Budget forecasts a balanced General Fund and maintains at least a $34,000 contribution to the ending fund balance. Achievements. The City Council made Budget 2021 decisions, enabling Finance to finalize ordinances, reports, narratives and other documents that must all agree with each other at final adoption on December 1st. Council and staff have worked hard throughout a challenging process, during a challenging time, exploring creative options and alternatives, to maintain current service levels. As discussed in the City Council's public study sessions, the 2021 Budget achieves the following: ✓ Continued service delivery in all departments through the COVID emergency ✓ 5-year Capital Budgets were developed for all Capital Funds ✓ Enhance the City's General Fund reserves Priorities. The budget process requires us to evaluate annually the city's priorities, between immediate services and infrastructure, across many funds, being mindful of long-term fiscal sustainability. The goals of the 2020 Budget are: ✓ Achieve a balanced budget in every fund ✓ Assure appropriately-prioritized services citywide ✓ Protect General Fund reserves ✓ Assure long-term sustainability across all funds Funding decisions. Starting in 2021, incorporate a 3% refuse rate increase annually over the next 5 years. Process input. Staff participates year-round providing service delivery and managing the budget through unforeseen surprises. Next year's budget is largely based on what we know about this year's difficulties. City Council exercises governance year-round and makes policy decisions. Citizens had the opportunity to provide study session input and will have additional opportunities at this hearing and the hearing on November 19th. Property Tax and Sales Tax are the largest sources of revenue for the General Fund, the most material forecasting assumptions. When property owners thrive, property values increase; property tax is a significant funding source for 3 FINANCE city services. When businesses thrive, our sales tax increases. The City serves the people who, in turn, fund the services provided by city government. Everyone participates in making Yakima a better place. The following table summarizes the proposed budget across all funds. Some Enterprise and Construction Funds are budgeting to spend expenditures over current-year revenues for current and previous year projects, some of which comes from prior-year project approvals or savings in those funds. Estimated 2021 2tt21 Inca-aye iu Estimated 2921 Beg: Projected. Reposed (Decieaseint 2021Ending Fund Balance Revenues Expenditurees. Reseates Balance Genera:Pend 1 1Om61.371 0 69 664 332 5 0630142 a 34,100 5 i0,991,761 ?asks rnd Recreation bon 337 3.725.333 , 9.001 532 567,1e0 Streets Trento t7petat wu 1w571 6,35,t25. 6,052;4&4. 661 130,7.39. General G, rerranent Subtotal 11,713,935 31 513 220 1777,657 35E33 1.,749;665. Oita Gm emmentst Opet eng Fronds 6 931 203 16457.323 1.450.495e 5723324, 692 :612 Government Rangel5mad:.. 34'025E21 15,505,321 1t424,72,? (3.519:402l °.139.150. Er.terytise Qpe-.ai4iig Funds 77112,101. 67,087,170 46,779,715 307,455 20,4i9.556. Enterp r.,e Cain...F-.vxis 33,587,3eCt .1, 4Mx71 27,463,830 4,254v4: 34,479,101. imetstal Ser ce Funds 17341,972. 7,237,3et 3E5503 ti C19.c4n) 225,273 Employee Benefit Reomme 303091 /6293943 1E433 61 (139,110) 4,967273 link:Management Feembes 2,422234 3l>o9iu 5,655,793 t0675,779 1,G10,3:17 Debt Sentte est Agercy Funds >, x, 7,485,303 ,493,303: 3;'.}32. Total a. 93.126.94 5 242,26E405 1 240,32E,279 5 t"U43 41 14 80264.25. 2 of 3 Yakima.14125.1.MEMO-_Council__2021_Budget_10-27- 2020.docx 4 FINANCE As a result of Study Session Discussion, three revisions have been made to the 2021 Budget, and will be included in the budget ordinance on December 1st: 1. The State Supreme Court's October 15th decision to overturn 1-976, the car-tab initiative, restored funding for streets projects that had relied on this forecasted revenue, most notably the North 1st Street revitalization. The 2021 Budget has been revised to include an estimate of $1.6 million for TBD revenue in the Streets Capital Fund. City Manager, Legal, Public Works and Finance staff will continue to review and coordinate. 2. Mill site development funding has been revised in the 2021 Budget to reflect council direction as discussed in the October 15th study session. Funds, Amount Notes De artrrent of Fcolo Grant $ 8,700,000 Reimbursement Grant Solid Waste Fund Cash $ 500,000 Leaves estimated fund balance of Balance $1.3 million Utility Contributions from Water, Contribution for the preparation of the Wastewater, and 3tormwater $ 3,218,000 site area for utility installations LIFT (2021/2022 contributions) $ 2,000,000 Covers the share of road contributions TOTAL 514,418.001 3. The Lodging Tax Advisory Committee met on October 22nd and after review and discussion, proposed the following revised allocation of 2021 Lodging Tax Revenue, which has now been input into the budget: LTAC LTAC Adopted Budget Recommendation Recommendation 2020 August 27 October 22 Revenue forecast 1,620,000 i 1,310,000 1,310,470 Less,existing city obligations Convention Center debt 486,000 347,051 347,051 Convention Center capital exp 238,430 s 72,949 65,654 Convention Center operations 489,600 606,000 545,460 Visitor Center Operations 74,020 52,900 57,375 Sports Commission Operations_ 84,660 s 87,500 78,750 1,372,710 1,166,400 1,094,230 Capitol Theatre Operations 198,910 s 75,000 154,500 SunDome 48,380 48,600 43,740 Airport - - SOZO - 20,000 18, Museum - Total Expenses 1,620,(X70 3 1,310,000 1,310,470 Surplus(Deficit) - - 0 3 of 3 Yakima.14125.1.MEMO-_Council__2021_Budget_10-27- 2020.docx 10/27/2020 2021 Budget 1st Hearing Every Budget's Goals ✓Achieve a balanced budget in every fund ✓Assure prioritized services citywide ✓ Protect General Fund's reserves ✓Assure long-term sustainability Clear — Reliable — Trustworthy Study Sessions 10/6—Budget Basics 10/13—Capital Budget • Economy • REET • Revenue forecasting • Parks •Capital • Water • Debt •Arterial Streets 10/8—Operations 10/15—Policy discussion • Police • Fund Balance Policy • Fire • Vehicle Replacement •Community Development • Millsite • Public Works • Refuse Rate •Airport 1 10/27/2020 Subsequent Changes ✓ Lodging Tax revised allocation ✓TBD revenue restored to 2021 budget ✓ Mill site funding revised allocation Clear — Reliable — Trustworthy Lodging Tax Allocation Arta( „a"dte • ttttothr.s v t t33£i0 • tttthcre'tpr_U'ant,'' b6EM • M1w CFS'i.-w+x 7t Qp .R...�mn„ e.fiWt' WNA 4,403,04 Coca ozc firgi moot. MONOMMOMMEN t=t=ct6 tatOtZt ±*tt=x TBD Revenue 2017 2018 2019 2020 20z0 2a21 Budgeted 1550000 '550.000 Si.590000 forecast forecast Jan. - - 138346 110,761 113761 1132,02 Feb. - - 120.027 434937 434.937 427300 Mar. - - 09080 121,2,97 121097 1132,02 Apr - - 152638 455,see 4550Oe 454300 May - - 16'8,716 143224 140 224 154000 Jun 152.302 '44.444 '44444 '45 COO Ja. - 30136 13'7195 154.539 154539 144000 Aug. 1'0.821 139927 '27.294 '27294 '34,COO Sept - 133056 150578 165587 165587 163000 Oct . 121 89 122582 122 000 122 300 Nov. - 126,779 155174 14t000 141000 Dec - 111,182 o 411130 in 3t0 Total S4 S633,862 605,819 Si254,585 Si c20.68eI..i ciC.300, 2 10/27/2020 Mill Site Development Funding Funds A,roart hates D€parnenIo,Ecoiogy Grant &700 030 Rerentxweamen1 Grant So:ct Waste Ft.nd Cast, $ 500 030 Leaves esCmatea rend Lance of Science $1.3 fnMiat, Utlity C'OritibilieW;from Water, Contriouton far the orepwation of the, Wastewater,anl Stormwater S 3,218 OX ate area for tbityinstatatens LIFT(2021)2022 contnbitionsi $7000 OM Covers the share or road contributions tOTAL Clear Reliable Trustworthy Budget to be Adopted All Funds 4.) • Clear Reliable Trustworthy-,54, Proposed Budget --- eats a, Rnyyyyr IKyyuCITyY. Rykyve, (fly„y, y vtyy,y4Y ,e nets' 3 40/27/2020 General Fund Reserve Improvement 2019Actual Savings $1 ,700,000 2020 Forecast breakeven?! 2021 Budget $34,000 Gear — Reliable — Trustworthy 2020 In-process Surprises/budget unknowns _ COVID-19 (less revenue and more expenses) _ CARES Act recovery on-going _ Audit overhead allocation requirement _ Snow Challenges to Overcome 1. Maintaining General Fund reserves 2. Property Tax 1%cap 3. Prior year lingering issues •Vehicle Replacement Funding •Mill site development •Loss of TBD Streets project revenue 4 10/27/2020 Key Dates 6 Council Study Session 1 Oct 8 Council Study Session 2 13 Council Study Session 3 _ 15 Council Study Session 4 Public Hearing,Ordinances c1 Ad Valorem Tax Rate Nov2 I1st Budget Public Hearing 17 !Last budget changes 17 2nd Budget Public hearing Dec 1 Adopt Budget 2021 Budget Process An increasingly well-managed city Clear — Reliable — Trustworthy "''~ 5