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HomeMy WebLinkAbout2010-050 2011 Budget Forecast 2011 ucteget Forecast City of y tt L ittt ___---,, v. '' "n iirmi4 Washington :` 1 C7 Eaga 0 ■ ■■ ■■■ ■■■ ■■■ r- ■ ■■ ■ ■■ ■■■ ■ ■■ NMI MIN ■■N III ■ MN ■■■ ■ ■■ ■■■ •` D MAIN STATION NY , 'D• 4 '- - i f AWIEW s - -r' r Quasqu q ;4.:. }4'+i�+�: C -;.,77,"F". im•' ... . _ ./ .___ � s . , - 125 (Years s' Incorporated 1886 , // y�• • �� I r } ) I i . • i' i t ` 11 �w tji — p i OriginaC(Yakima City Miff B uiCt 1885 Yffbitil/ CITY OF Washington 2011 BUDGET FORECAST Insurance & Risk Management Equipment $12.4 Million Rental $5.0 Million I Police, Courts, Fire (Public Safety) Water & Irrigation $40.2 Million $14.0 Million City Administration $6 Mill Wastewater $36.3 Million Information Systems & Other Services $7.4 Million Other Operating Funds $15.5 Million Refuse $4.9 Million Streets, Engineering, Transit Planning & Codes $7.7 Million $5.8 Million Stormwater Parks and Recreation $2.9 Million $4.0 Million Non - Utility Community & Economic Capital Improvement $18.3 Million Development $2.4 Million Debt Service $6.5 Million $189.8 MILLION Preface —1 2 — Preface CITY OF / Washington VISION STATEMENT To create a culturally diverse, economically vibrant, safe, and strong Yakima community SSION STATEMENT To provide outstanding services that meet the community's needs To govern responsibly by effectively managing and protecting public resources To build trust in government through openness, diverse leadership, and communication To strategically focus on enhancing Yakima's quality of life ST TEGIC DIRECTION PRIORITIES Maintain and Improve Public Health and Safety Efficiently Manage Public Resources and Ensure Fiscal Stability Promote Economic Development and Diversification Preserve and Enhance Yakima's Quality of Life Provide Responsive Customer Service and Effective Communications Build and Utilize Strategic Partnerships ADOPTED MARCH 2009 Preface —3 4 — Preface C I FY Y 01 Vati 2011 BUDGET TO CAST TABLE OF CONTENTS SECTIONS I. INTRODUCTION Transmittal Memo Executive Summary Budget Highlights IL GENE L GOVERNMENT Year in Review Revenue Trends Expenditure Trends IR GE . L GOVL ENT DEP T NTAL INFO TION ® T YOU PAY AND , T YOU GET V. OTHER FUNDS VI, ITAL PROVEMENT FUND E IBITS I. THREE-YE . BUDGET COMP. SON IL POLICY ISSUE SU Y III, SUPPLEMENTAL INFO ATION PRIORITIES OF GOVT MENT MODEL ( , 1 Preface —5 6 — Preface INTRODUCTION: TRANSMITTAL MEMO OFFICE OF THE CITY MANAGER 129 North Second Street L City Hall, Yakima, Washington 98901 a "� Phone (509) 575 -6040 � MEMORANDUM OCTOBER 5, 2010 TO: The Honorable Mayor and Members of the City Council SUBJECT: City Manager's 2011 Preliminary Budget Forecast Message Pursuant to the provisions in the City Charter, I am presenting the 2011 Budget Forecast for the City of Yakima. The proposed total City Budget for 2011 is $189.8 million, is balanced within existing resources, and is 7.5% less than the 2010 amended budget. The proposed City General Government Budget for 2011 is $56.8 million, and is also balanced within existing resources in accordance with the Council's "Priorities of Government Model," adopted last year. The General Government Budget for next year is 5.2 % less than the 2010 amended budget. Moreover, since 2009 the General Government Budget has been decreased by 9 %. Today, like many local government entities throughout Washington State and across the nation, the City of Yakima is at a crossroads. A persistent national economic recession has severely curtailed the City's traditional sources of income, resulting in chronic funding shortfalls. Additionally, ballot initiatives which restrict and reduce financial support to fund basic government services continue to be advanced in Washington State. At the local level, this has contributed to the consistent depletion of basic resources to pay for core essential municipal services such as police, fire, streets, parks, planning and others. Substantial spending reductions and other cuts in services have become a way of life for all governments for the past several years. I have helped to develop and administer 38 budgets during my career with the City of Yakima. This is my last budget as your City Manager. In that time, the City has faced and overcome many financial challenges, maintained essential services and remained fiscally stable. However, at no point during my tenure have the budget needs been so great nor have the City's ability to maintain its basic government services in the future been as threatened as they are today. The hard reality is that the City's present funding and tax revenues are not capable of sustaining current municipal services. Unless and until those and other key economic factors change, a continued erosion and outright elimination of many of the City's basic programs and services is inevitable. Introduction: Transmittal Memo • Section I — Tax revenues are the primary source of funding for the General Government portion of the City's budget, which includes police, fire, parks, finance, information systems, planning, streets and other services. For the past several years, the City's sales tax revenues, which equal nearly 30% of all revenues, have been on a downward trend. Sales tax revenues in 2009 were lower than 2008 and are down even more in 2010. The same is expected for 2011. Other general government revenues such as property taxes, state shared revenues, and utility taxes have also been declining, limited or reduced by voter approved initiatives. Overall, General Government revenues for 2011 are projected to be less than this year's actual projections, and future revenue growth is highly uncertain. The City of Yakima has established a consistent track record of living within our means. Over the past three years, as the economy has faltered and tax revenues have declined, the City has made reductions in General Government programs, services and staff levels in order to maintain a balance between revenues and expenditures. From 2009 through 2010, the City has reduced spending by over $5.6 million and eliminated 30 full time positions in its General Government budget. Most City employees' salaries have been frozen several times in recent years and furloughs have been implemented this year for 225 employees. The elimination of the 30 positions represents over 60,000 hours of labor no longer being provided to the residents of our community. Expenses have been cut, operations have been consolidated, efficiencies have been increased, and available outside funding sources have been maximized. Despite these efforts, the City has had to spend nearly 45% of its reserves over the past two years in order to balance its budget. As a result, General Fund Reserves are now at the bare minimum to maintain needed cash flow and cover emergencies. Yakima is not unique in facing difficult choices regarding public services. In Washington State, most cities are cutting services, staff and programs significantly. The City of Lynnwood is planning to lay off a quarter of its workforce by the end of this year. Bellevue is proposing to close park restrooms, limit weekend hours at its community center, postpone bike lane and sidewalk construction, and layoff 25 staff. King County plans to eliminate 500 employees, including 28 deputy sheriff positions. Federal Way is slated to cut 46 staff positions, including 18 in its police department. Spokane anticipates reducing its workforce by 120 employees, including 47 police department staff and 28 fire fighters. Vancouver expects to let go more than 100 employees and close a fire station. The State of Washington also faces a crippling budget shortfall now and for the next biennium. Over the past decade, there have been several Initiatives on the ballot that reduced municipal government revenues, and 2010 is no exception. In November, citizens will be asked to vote on Initiatives 1100 and 1105; both would eliminate liquor profits and 1-1105 would also eliminate the liquor tax, if approved. Both initiatives close state liquor stores and privatize the sale and distribution of liquor, though they have different effective dates and different impacts to state and local governments. The revenues received from liquor profits and taxes are dedicated to public safety services in our City. Should I-1100 or 1-1105 be approved by voters, the City of Yakima could expect to see its public safety revenues reduced by over $1.1 million annually. 2 — Section 1 • Introduction: Transmittal Memo In order to attain a balanced General Government Budget next year, the spending reductions proposed in this Forecast total $2.3 million. An additional reduction of up to S1.3 million may be needed to accommodate the potential loss of liquor taxes and profits, as well as unknown labor settlements and state pension mandates. If all reductions are made, the total would be $3.6 million and eliminate up to 30 more additional staff positions next year and reduce other services across the entire "Priorities of Government Model" in proportion to their share of available budget resources. Simply put, if all of the proposed reductions are implemented, the City cannot maintain the current level of services it provides to the community. The cumulative effects of reductions in personnel and level of service implemented over the past several years have been significant. While this budget proposal is balanced within existing resources, the additional expenditure reductions in city services are alarming. As a result, given the adverse impact of the budget reductions on public services presented herein, I feel obligated to also submit a tax proposal for your consideration, this year, to help mitigate some of the proposed budget cuts included in this Forecast. This is the first major tax proposal to help balance the City's budget that I have made in more than a dozen years and it is not made lightly. I am proposing that the City Council consider approving an increase in the tax applied to City owned water, wastewater, refuse and stormwater utilities, as well as to private water and refuse services. I am also suggesting that the tax increase proposal include a provision to sunset in three years to allow an opportunity to determine if the economy will recover and other spending reductions can be made in the interim. Should the proposed utility tax increase be adopted, an average household in Yakima would pay less than five dollars more per month. The total amount raised through this tax would be approximately $2.1 million. Even if utility taxes were to be increased, not all of the $3.6 million in reductions included in this Forecast could be avoided. However, the potential decreases in City services to our community would be far less dramatic. In the nearly four decades that I have been privileged to serve here, Yakima has experienced tough times and has repeatedly proved its resilience and ability to overcome, adjust and we will do so again. City Management is prepared to assist the Council in every way we can to help you reach final decisions on the City budget for 2011 and the services we will deliver to the public this next year. Respectfully submitted, City Manager Introduction: Transmittal Memo • Section I — 3 4 — Section 1 • Introduction: Transmittal Memo INTRODUCTION: E CUT SU Y The Executive Summary provides a high-level overview of the 2010 year-end forecast and the proposed 2011 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 2011. More details regarding these issues can be found in the "Budget Highlights" pages at the end of this Section and / or in Section II - General Government Budget. 2010 YEAR END FORECAST Current revenue projections indicate that 2010 year-end General Government revenues will be slightly less than 2009 Actual revenues (or $57.1 million); with a decrease of 0.4% projected in 2011 (to S56.9 million). The 2010 General Government revenue budget was anticipated to be $58.1 million over the prior year—a modest growth estimate of 1.3%; however, several major revenues lagged behind estimates. The underlying economic crisis extended the drop in Sales Tax and interest rates into 2010. Additionally, the City's success in fighting crime caused a reduction in State Shared Revenue dedicated for Criminal Justice; while the mild winter and underlying rate adjustments resulted in a sharp decrease in Natural Gas utility tax. These revenue reductions necessitated City management to devote significant time and effort during the year focused on reducing 2010 expenditures more than $1 million below the City Council's original authorized budget levels. Current expenditure projections indicate that 2010 year-end General Government expenditures will be ($1.2) million less than budgeted (refer to Section II for more information on the budget reductions). Management's unwavering focus on reducing the City's 2010 expenditures resulted in projections that 2010 year-end expenditures will be less than budgeted in all General Government operating funds and in total for all funds, city- wide. This was a very difficult task, with serious consequences to some municipal services; however, it was of critical importance that these reductions be made in order to maintain the City's fiscal stability going into the coining year, which is not expected to offer much economic relief - as is reflected in the following chart. Introduction: Executive Summary • Section 1 - 5 IO0 VS. ID|| EXPENDITURE BUDGET COMPARISON ( (TRADITIONAL BUDGET MODEL) 10 VS. | 2010 2010 AMENDED YEAR-END AMENDED %O|| BUDGET FUND ESTIMATE BUDGET BUDGET % CHANGE General $49298,806 $50 $47,741,765 (5.0%) Parks 4,133,782 4,218,655 4 (5.0%) Street & Traffic Ei3()8,117 5,424,662 EiO41 (7.1%) TOTAL GENERAL GOVERNMENT $5E\740,705 $59,900 $56i789,633 (5.2%) Community Development 2) $5i024,318 $5,705 $2,223,457 (61DY) U6|i6,u/ Other Operating 58,938,969 61,579,587 58,800,017 (4.5%) Capital Improvement 40,510,007 54,328,841 41,537,299 (23.5%) Contingency / Risk K1gmtKyva°' 3 3 9902,608 224.0% Employee Benefit Reserves 13,252,961 13,974,705 14,041,113 0.5% General Obligation Bonds 3 3 3,350,077 1.8% LID Debt Service 406000 407,000 285,000 (30D9) Water /Sewer Revenue Bonds 2 2 2,862 (0.0%) Trost and Agency Funds 10,000 15,000 5,500 (63.3%) TOTAL CITYWIDE BUDGET (4) $185,989,755 $205,120902 $189,796758 (7.5%) (1) General Government The 2011 General Government expenditure budget is approximately $3.1 million or 5.2% below the 2010 amended budget. ( The 2011 budget includes an estimate of the 20U grant awards only. The 2010 amended budget includes the 2010 grant awards and awards carried forward from the previous years. (3) The 2011 Risk Management fund includes $7.0 million for anticipated possible mitigation in 2011 of contamination from the former City landfill at the sawmill site. It is anticipated that the mitigation expenses will be reimbursed through a corresponding insurance recovery revenue. (4) Citywide Expenditures The Citywide Expenditure budget is approximately $15.3 million or 7.5% below the 2010 amended budget. 2011 PROPOSED BUDGET AND REVENUE PROJECTIONS CITY WIDE BUDGET 2010 Year -End Expenditure estimate of million is /9 SY"\ � - xp�o ur��� on0 �0 , rn 0o � , . / e5s than the amended bud � of million. This savings is primarily due t �e o , . oz oo. asavn�o o�`zozaz Y ue o management's t' t {{' and deferral f 't[ ' L that S strict spending 8n � of 50uz��8]p� capital projects 8 vV'l[n0t��C0oo [t(1� (1 will completed 8 by year-end. 201lI'�0 {{B (1�t budget Li approximately �l�g� 'l�' (7���)l than p05� Expenditure ur� u �� is ~ . million; , . , less the 2010 amended budget L /�205 l million. u �� of ~ . cn 0o. ��llProjected I� i approximately $182.5 million 4% greater than the Revenue o , � oz 000r �rea er ao 2010 ��tion�t� 0{�l7� 2 million. The primary increase is from Federal/ year-end , � � �)r oudr�r�v�ou� oCr�d�� � zVon St8L8 t and (1 thus ' ' ' �c8o S 8o 08npcOC88 proceeds, uS/Srestricted /o/ S uS8. 6— Section I* Introduction: Executive Summary The proposed 2011 total city-wide expenditure budget of $189.8 million is balanced within existing resources and reflects a decrease of (7.5%) from 2010, despite numerous actual and projected increases in the costs of providing existing services. This was only accomplished as a result of significant mid-year reductions in 2010 expenditures and additional significant budget and service reductions are included in the proposed 2011 budget. GENERAL GOVERNMENT BUDGET 2010 Year-End Expenditure estimate is approximately $58.7 million, or ($1.2 million), below the amended budget of $59.9 million. 2011 Proposed Expenditure budget is approximately $56.8 million; (5.2%) less than the 2010 amended budget of $59.9 million. 2011 Projected Revenue budget is approximately $56.9 million or .4% less than the 2010 year-end revenue estimate of $57.1 million. The proposed 2011 General Government (taxpayer supported) budget consists of three separate Funds: the 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 2011 budget; this includes Police, Fire, Courts and support to these departments from the Information Systems, Finance, Legal, and Human Resources divisions. Significant budget and service reductions have been proposed throughout the 2011 General Government Budget. Staff has worked diligently for several years to be more efficient and to do more with the same or fewer resources. Historically, the City has absorbed cost increases, reallocated resources, reduced costs and focused on efficiency improvements for so long that it is now operating extremely lean; which causes major budget reductions to result in major reductions in related services. The proposed 2011 General Government expenditure budget reflects a decrease of approximately (5.2%) from the prior year, (refer to Section III for more information regarding the proposed budget / service reductions). This reduction in budget and related services is due to the combination of a continued reduction in projected revenues and projected increases in the costs of providing existing services. Therefore, at this reduced expenditure level, the City cannot continue to sustain the 2011 proposed service levels in the future without significant growth in revenues, or other reductions in spending on programs and services. Introduction: Executive Summary • Section I — 7 PRIORITIES OF GOVERNMENT (POG) BUDGET MODEL The City Council is vested in the effort to provide the highest priority services to our citizens. As part of this effort, the City Council adopted a budget model / methodology for budget development referred to as the Priorities of Government Model. Council adopted six Budget Priorities for the City's General Government expenditures, as listed in priority order: Budget Priorities: 1. Maintain and Improve Public Health and Safety 2. Efficiently Manage Public Resources and Ensure Fiscal Stability 3. Promote Economic Development and Diversification 4. Preserve and Enhance Yakima's Quality of Life 5. Provide Responsive Customer Service and Effective Communications 6. Build and Utilize Strategic Partnerships 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 prior year (i.e. 2010) budget, Council directed staff to allocate the projected 2010 revenues among the six Budget Priorities in the same relative percentage that each held of the total 2009 adopted General Government budget. Additionally, Council authorized staff to utilize a portion of the projected 2010 year-end cash reserves - in an amount equivalent to the amount that exceeds 7% of the 2011 General government Budget; which was projected to be approximately $1.5 million at that time - for Public Health and Safety's 2010 budget in addition to the allocation noted above. The use of reserves to help fund critical services within the Public Safety Budget Priority in effect increased this priorities percentage allocation of resources going into 2011. Last August the Council reviewed the application of the POG model prior to the development of the 2011 Forecast budget. Because reserves have been significantly reduced by almost half to minimum levels during the past two years of economic downturn, Council reaffirmed the application of the model without any use of reserves. The budgeted reductions are therefore spread among the priorities to bring the expenditure budgets within the relative percentage of revenue allocation. The following pie chart depicts the proposed 2011 budget and related budget allocations to Council's six Budget Priorities. 8 — Section 1 • Introduction: Executive Summary 2011 GENERAL GOVERNMENT PROPOSED BUDGET (BY BUDGET PRIORITY) TOTAL — $56,662,446 Resource Management $8,256,347 14.6% Public Health & Safety $38,990,680 68.8% Quality of Life $4,009,864 7.1% Economic Development $2,959,020 5.2% Customer Service & Communications $1,889,248 Strategic Partnerships 3.3% $557,289 1.0% 2010 VS. 201 1 GENERAL GOVERNMENT EXPENDITURE COMPARISON BY BUDGET PRIORITY (Numbers in Thousands) Public Health & 38,991 Safety $40,938 Resource $8,256 Management $9,031 Economic • $2, 59 Development $3, 79 • 2011 Proposed Budget - $56,662 Quality of Life 4,010 • 2010 Amended Budget - $59,900 4,298 Customer Service & . $1,88 Communications $1,87 Strategic $557 Partnerships I $580 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 Thousands Introduction: Executive Summary • Section I — 9 The previous bar chart graphically reflects the 2011 proposed budget compared to the 2010 amended budget (the current authorized expenditure level), for each of the Budget Priority categories. Due to the projected reduction in General Fund revenues in 2011 from that of the prior year, four out of the six budget priorities were allocated fewer (absolute) dollars in the proposed 2011 budget than they received in their 2010 budgets. The two Budget Priority categories that received a minimal increase in their 2011 budget were (1) Customer Service and Communications — due mostly to increased costs associated with the acceptance of payments through electronic formats (this increase will be offset by additional revenues from the utilities) and (2) Strategic Partnerships — due to increased costs associated the City / County consolidation of Purchasing (cost increase should be mostly offset by additional revenues from the County). It should be noted that the actual reductions experienced by the various operating budgets is much larger than what is reflected in the above chart due to many significant increases in the cost of providing existing (2010) service levels. That is, the cost in 2011 of providing existing services is greater in many areas than their 2010 budget amount — thus, reductions had to be made to get down to the 2010 budget level in addition to the reductions required to go further to meet the lower 2011 budget level. 20 I 1 BUDGET ALLOCATION The following chart provides a comparison of the 2010 Adopted Budget (in both dollars and relative percentage each Budget Priority received of the total budget) to the 2011 Budget. This demonstrates that the 2011 Forecast budget as presented is ratably allocated in the same percentage as the 2010 budget. To accomplish this, a budgeted policy issue amounting to $2.3 million has been developed. There are also other issues that may negatively affect the 2011 budget, including the liquor initiatives; other decreases in state shared revenue; pension system rate increases; and labor settlements. In order to be able to respond to these other threats of decreased revenue or increased costs, additional reductions have been listed (but not yet budgeted). 10 — Section I • Introduction: Executive Summary 2011 PRIORITIES OF GOVERNMENT BALANCE BUDGET GENERAL GOVERNMENT 2011 2009 2010 2010 2011 2011 BUDGETED ACTUAL ADOPTED AMENDED PROPOSED PROPOSED REDUCTIONS Revenue 0 -> $58,035,233 $56,863,960 Reliance on Reserves (2) 1,482,206 0 Total Resources $59,517,439 $56,863,960 Priority of Government Public Health & Safety 68.6% $40,858,079 68.8% 68.8% $38,990,68 $1,749,525 Resource Management 15.1% 8,750,081 14.6% 14.6% 8,256,346 369,826 Economic Development 5.4% 3,174,055 5.3% 5.2% 2,959,020 152,760 Quality of Life 7.3% 4,290,254 7.1% 7.1% 4,009,864 49,000 Customer Service & Comm. 2.8% 1,864,820 3.2% 3.3% 1,889,248 0 Strategic Partnerships 0.8% 580,150 1.0% 1.0% 557,289 0 Total 100.0% $59,517,439 100.0% 100.0% $56,662,447 $2,321,111 Non - Recurring Expense (Retirement Cash Outs) $127,187 Total $56,789,634 Estimated Increase in Cash ($1,482,206) $74,326 Estimated Beginning Cash Balance 5,846,379 4,750,845 Estimated Ending Cash Balance $4,364,173 $4,825,171 Percent of 2011 Annual Expenditure Budget in Reserve 8.50% (1) Year End Estimated Revenue $57,077,844. 2010 Reduction due to drop in Sales Tax, Natural Gas Tax (mild winter), Interest Earnings and loss of High Crime revenue (lower crime rate). (2) Allocated by Council for Public Safety SUMMARY BY DEPARTMENT POG SUPPLEMENTAL DEPARTMENT REDUCTIONS REDUCTIONS (I) Police $817,608 $303,341 Fire 643,000 377,000 Municipal Court 0 0 Finance 185,741 31,000 City Management / Legal 38,585 74,333 Community & Economic Development 389,903 52,647 Street & Traffic Operations 201,274 135,662 Parks & Recreation 45,000 89,500 Furloughs (5 Days) 0 218,458 Total $2,321,111 $1,281,941 GRAND TOTAL $3,603,052 (1) Contingency reductions for loss of revenue for Liquor Tax Initiatives, increased state pension contribution, unresolved labor settlements, other. Introduction: Executive Summary • Section I — SUMMARY BY PRIORITIES OF GOVERNMENT BUDGETED SUPPLEMENTAL PRIORITY OF GOVERNMENT REDUCTIONS REDUCTIONS Public Health & Safety PS $1,749,525 $814,058 Resource Management RM 369,826 238,672 Economic Development ED 152,760 86,904 Quality of Life QL 49,000 113,820 Customer Service /Communications CS 0 22,000 Strategic Partnerships SP 0 6,487 TOTAL $2,321,111 $1,281,941 $3,603,052 2011 GENERAL GOVERNMENT BUDGET BY DEPARTMENT 2011 % 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 Budget Police 21,835,261 38.4% Fire 8,629,702 • 15.2% Streets & Traffic Op. 5,041,006 8.9% Parks 4,006,862 Mil 7.1% Transfers (1) 2,442,275 4.3% Information Systems 2,228,738 WI 3.9% Police Pension* 1,404,590 IM 2.5% Financial Services 1,381,498 • Personnel 2.4% Code Administration 1,330,361 E:0 2.3% 2 3% Utility Services 1,305,084 2.3% Municipal Court* 1,234,194 12 2.2% Legal 1,139,157 2.0% Engineering 752,250 D 1.3% Planning 678,679 Iii 1.2% City Manager 514,336 I 0.9% All Other Streets Indigent Defense 480,000 Q 24.3% 8.9 % Parks 0.8% 7.1% Purchasing 452,835 0 0.8% Human Resources 447,436 0 0.8% Records 411,555 J 0.7% City Hall Maintenance 352,127 ID Police, Fire 0.6% Intergovernmental* 257,439 0 & Courts 0.5% 59.7 City Council 203,061 I 0.4% Nonrecurring Expenses 127,187 I 0.2% State Examiner* 103,000 I 0.2% Hearings Examiner* 31,000 I 0.1% Total $56,789,633 100.0% Fire Pen & Benefits $1,572,265 0 2.8% 12 - Section I • Introduction: Executive Summary The 2011 Proposed Budget broken down by Department, as reflected in the bar chart above, provides a clear picture of the resource requirements of each functional area within the City and how each area compares both to each other and to the total General Government budget of the City — in dollars and staffing levels. The Police Department consumes nearly 40% of the $56.8 million General Government budget, while the Fire Department consumes another 15%; no other single Department utilizes more than 10% of the total General Government budget. The Streets / Traffic Department budget (8.9%) and the Parks and Recreation Department budget (7.1%) 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 be the Council's Budget Priorities Allocation for the coming year. Refer to Exhibit 1 for 2011 revenue and expenditure budget information by fund. PROJECTED ENDING CASH BALANCE (RESERVE) General Government resources consist of annual revenues and cash reserves. 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 for many different business purposes, including: provide for emergencies; cover temporary cash flow needs; take advantage of one-time, unanticipated opportunities; fund unbudgeted policy issues authorized by Council; provide grant matching funds; and / or cover revenue shortfalls, accommodate unforeseen expenditures and other contingencies. 2011 GENERAL GOVERNMENT PROJECTED REVENUES, EXPENDITURES AND CASH BALANCES 2011 2011 2011 2011 2011 2011 EXPENDITURE ESTIMATED ESTIMATED ENDING BAL PROJECTED PROPOSED As % OF BEGINNING ENDING As A % OF REVENUE EXPENDITURES DIFFERENCE REVENUE BALANCE BALANCE EXPENDITURE General $47,787,665 $47,741,765 $45,900 0.1% $3,012,846 $3,058,746 6.4% Parks & Recreation 4,034,485 4,006,862 27,623 0.7% 369,088 396,711 9.9% Street / Traffic Operations 5,041,810 5,041,006 804 0.0% 1,368,912 1,369,716 27.2% TOTAL GENERAL GOVERNMENT $56,863,960 $56,789,633 $74,327 0.1% $4,750,846 $4,825,173 8.5% In 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 budgeted year-end General Government cash balance of no less than an amount equal to approximately one month's operating expenditures (i.e.: approximately 7% to 8% of annual general government expenditures), and (2) during budget development, provide for the utilization of no more than a 3% contingency reliance on reserves to balance the budget. The 2011 General Government budget is balanced with no reliance on reserves, so that rule 1 (i.e minimum reserve levels) could be applied, and in fact the ending reserve for 2011 General Government is 8.5%. Introduction: Executive Summary • Section 1 —13 Cash reserves are an integral and critical component of responsible fiscal management and business planning. Standard and Poors, 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 Poors stated in their 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 ". GENERAL GOVERNMENT RESERVES — USAGE AND BALANCE COMPARISONS (I) (2) (3) (4) (5) 2010 2011 2010 CURRENT UPDATED 2009 AMENDED YEAR -END MANAGEMENT VARIANCE ACTUAL BUDGET ESTIMATE (I) PROPOSAL (4 — 2) Beg. Reserve Balance $8,622,738 $6,413,707 $6,413,707 $4,750,845 Revenue 57,290,718 58,072,948 57,077,844 56,863,960 Total Resources 65,913,456 64,486,655 63,491,551 61,614,805 ($2,871,850) Expenditure Budget 59,499,749 59,900,694 58,740,706 56,789,633 (3,111,061) End. Reserve Balance $6,413,707 $4,585,961 $4,750,845 $4,825,172 Percent of Annual Expenditures 10.8% 7.7% 8.1% 8.5% Inc /(Dec) in Reserves f/ Prior Year (1) ($2,209,031) ($1,827,746) ($1,662,862) $74,327 Percent of Expenditure Budget (3.7 %) (3.1 %) (2.8 %) 0.1% (1) Utilization of reserves in 2010 includes $155,000 cash outs and approximately $1.5 million allocated to Public Safety The chart above reflects several key aspects of the City's fiscal condition: > Revenues: The 2010 year -end revenue estimate is less than 2009 actuals; this revenue reduction strained City resources past the point of the City's ability to maintain existing services during the year — many budget and service reductions were implemented mid -year to help reduce costs and minimize the negative impact on reserves, and further reductions are proposed in the 2011 budget. 2011 projected revenues reflect a decrease from the 2010 year -end estimate of .4% and 2% below the 2010 amended budget. > Expenditures: The 2010 year -end expenditures are projected to be $1.2 million less than the amended budget. The 2011 proposed expenditure budget is nearly $2 million less than the 2010 year -end estimate and approximately $3.1 million less than the 2010 authorized expenditure level. With these reductions 2011 budget is balanced without using existing reserves. 14 — Section I • Introduction: Executive Summary Reserves: A comparison of the 2009 beginning and ending reserve balances reflects a use of one fourth of the reserves during that year, (approximately S8.6 to S6.4 million). Even though the City implemented a mid-year budget reduction, 2010 year-end projections indicate a utilization of reserves of approximately $1.7 million during this year, thus using $3.9 million or 45% of the beginning reserves in this 2-year period. While a major purpose for holding reserves is to provide funding for critical City services during times of temporary economic strife such as what the City — as well as the nation — is experiencing, the City's reserve balance at the end of 2011 is projected to be close to the recommended minimum balance and should not be depleted further. The 2011 budgeted year-end reserve level is just over 8% of the total 2011 general government budget. This is within the reserve guidelines, as noted on the previous page. SUMMARY Due to the significant negative impact of the national recession on the local economy, and the related reduction in the City's 2010 General Government revenues, the City utilized reserves and instituted significant budget reductions during 2010 in order to manage the budget within available resources; however, 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). Introduction: Executive Summary • Section 1 —15 INTRODUCTION: BUDGET HIGHLIGHTS For two 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 continually updated, 2010 and 2011 revenue projections for the City based on the volatile economic condition of our region. The stability of the City's fiscal condition — and that of most every city and state in our nation — has steadily worsened over the past 18 months. Out of necessity, the City historically has closely monitored and restrained costs. Unlike our current situation, in past years, it has been the local agricultural industry that was the sole significant economic driver for the City. Since the forces of nature are largely unpredictable and can have significant negative impacts on agriculture, the only prudent approach to fiscal management for the City of Yakima has always been one of caution and restraint, so that the City was able to "ride out the storms" without huge fluctuations in services to our citizens. However, these are very different times, involving a national crisis in our financial markets that has thrown both the national and local economies into an economic recession that is much deeper — and likely much longer lasting —than anything we've experienced in decades. Some economists have stated that the recession is over (i.e. the economy is not still shrinking), however, there is also a general consensus that it could take several years to return to pre-recession levels. Interestingly enough, our agricultural based economy that has historically resulted in lower median incomes and higher unemployment rates has not declined as much as other areas, probably because the demand for food stays relatively constant, even when other segments of the economy are in severe distress. INITIATIVES 1100 & 1105 If approved by the voters, Initiatives 1100 & 1105 each impact a significant revenue stream for cities and counties. We currently get money both from liquor board profits and liquor excise tax. In 2009, Yakima received $580,000 in liquor profits and $412,000 in liquor excise tax, and the 2011 budget is built with S630,500 and $427,700 respectively. This revenue is dedicated for criminal justice and is used primarily to enforce laws associated with drunken behavior. I-1100 maintains the liquor excise tax but eliminates the liquor profits distribution (by December 31, 2011) since the system would be privatized and profits go to the retailers. 1-1105 removes both the liquor excise tax and liquor profit distributions by April 1, 2012. 1-1105 suggests that the Liquor Control Board (LCB) recommend to the Legislature a new tax rate that generates the same amount of revenue state and local governments receive now. The question is whether that will really happen — the Legislature doesn't have to pass a new liquor tax. And if 1-1053 (the Eyman initiative) passes, it makes it far more challenging to enact new or replacement tax rates on liquor sales. That initiative requires a 2/3 vote by the Legislature or a citizens vote to raise taxes. So it gets a lot more complicated. 16 — Section I • Introduction: Budget Highlights Privatization will increase the number of retail outlets selling liquor and, according to the Office of Financial Management, will increase consumption by 5% initially. Yakima has 3 liquor sales outlets under the current system, and it could possibly increase to 109 outlets with the passage of either initiative — there could be an impact on our local law enforcement. Right now the Liquor Control Board's enforcement program currently has a 94% compliance rating at the state run and contract liquor stores, and a 76-84% compliance rate for other alcohol suppliers. That means the state is making sure stores are not selling to underage drinkers or intoxicated customers. They go into stores with underage testers to see if stores will sell to someone under 21. The Liquor Control Board is expected to have sufficient funding from other sources to continue their current enforcement operations. However, according to the Liquor Control Board they do not expect to increase enforcement funding to account for the substantial change in the number of liquor retailers. Currently, there are 315 liquor retailers and the State Auditor's Office estimates over 3,300 liquor retailers in a privatized system. Without compliance checks, liquor sales and consumption basically are on the honor system. If the state fails to increase funding for the LCB's enforcement program, it will increasingly fall to the City to monitor all of the additional liquor outlets and the existing restaurants and taverns so that they do not become public safety problems. It is reasonable to assume that if these compliance measures are not kept up, the City could see an increase in DUI's, public intoxication, and underage drinking, which in turn could be more of a drain on local law enforcement. To address the potential impairment in this revenue, additional cost reductions have been identified for potential use should the either or both of these initiatives pass in the November election. 2011 GENERAL GOVERNMENT BUDGET — OVERVIEW The current year-end revenue projections for the City are significantly below the budgeted and authorized expenditure levels for 2010; therefore, management throughout the year has taken aggressive steps to reduce 2010 expenditures well below the previously authorized levels in an effort to minimize our reliance on reserves. Budget Priorities: During 2010, the City Council reviewed and reaffirmed the City's Vision, Mission, and Strategic Priorities (as listed in the information before the first tab in this Budget Forecast). Additionally, the Council Budget Committee recommended, and the full City Council approved, the re-affirmation of six Budget Priorities, noted in priority order: Introduction: Budget Highlights • Section 1 —17 • Maintain and Improve Public Health and Safety • Efficiently Manage Public Resources and Ensure Fiscal Stability • Promote Economic Development and Diversification • Preserve and Enhance Yakima's Quality of Life • Provide Responsive Customer Service and Effective Communications • Build and Utilize Strategic Partnerships City management placed significant emphasis on these priorities in their operating decisions and in the administration and development of the 2010 and 2011 budgets. Additionally, cost containment and efficiency improvements continue to be a focus and an emphasis in every expenditure decision. TAXES Management has included no new or increased taxes in the proposed 2011 budget as presented in this Forecast. Sales Tax: The General Government budget includes revenue projections that reflect an estimated decrease of approximately (2.0%) in sales tax revenues from 2010 to 2011. Property Tax: The 2011 budget is based on a 1% increase in the property tax levy, as currently allowed by state law, or approximately $155,000, plus a 0.7% or $107,500 increase for new construction for a total increase of $262,500. It should be noted that recent information from the Yakima County Assessor's Office indicates that new construction is estimated to be 1.7%. When coupled with an increase for recent annexations, the 2011 revenue budget could conservatively be increased by an additional $170,000 for Council consideration during upcoming deliberations. BUDGET REDUCTIONS I PERSONNEL CHANGES Due to the serious drop in revenues received in 2010 and projected for 2011, significant reductions and / or elimination in both budget and services were necessary in order to balance the 2010 and 2011 budgets within available resources and maintain a minimum reserve level. The 2011 General Government budget is $59.6 Million or ($2.6 million) less than the 2010 amended budget. These reductions include about S2.0 million in salary and benefit reductions; and more than 21 fewer net FTE positions. The City is proposing to the labor unions, and has budgeted a freeze on salary and wages (0% increase), for 2011; for all employees except those represented by Teamsters for Police Management; their contract had been settled prior to the request for the wage freeze. The City is in various stages of negotiation with all other bargaining units. Note: this represents the fourth salary and wage freeze over the past ten years (2001, 2007, 2010 and 2011). 18 — Section I • Introduction: Budget Highlights 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 proposed 2011 budget as there simply is no funding available to support additional programs, services or the related budget expenditures. Per Council direction, 2011 Policy Issues exclude Outside Agency requests. The City continues to receive both significant fiscal and quality of life benefits from our outside agencies. However, due to the severe reductions in revenue projections, all discretionary funding to Outside Agencies was reduced 50% in the 2010 budget, and eliminated in the proposed 2011 budget. Other significant Policy Issues include: An Irrigation operating rate increase of 5.5% per year over the next 4 years. Wastewater Treatment Facility capital improvements of $12 million, as identified in the current capital plan, to be funded by a combination of revenue bonds; Public Works Trust Fund loan; State Revolving Fund loan, and capital transfers from the operating fund. Because an existing debt service payment is completed, a rate increase for the new debt service is not being proposed at this point in time. A revised proposal to acquire 2 fire apparatus using a state-run lease program. A reorganization in Public Safety Communications including the addition of 2 positions to be supported by a potential increase in the Countywide 911 excise tax. There are also several minor fee increases being proposed to better match market conditions. The complete listing of proposed policy issues is included in Exhibit II. CHANGES IN FUNDING AUTHORIZATION The 2010 budget was adopted with a reduction of 22.5 Full Time Equivalent (FTE) positions, and the transfer of 5.6 positions to non-General Government funds. As discussed previously, the revenue fell below expected levels, and in mid-2010 management brought a reduction proposal that included the elimination of 6 newly vacated positions. Although the savings in 2010 were less than what is listed below because of the timing of the vacancies and related benefit cash-outs, the 2011 budget is reduced by the total of $409,100 as a result. The following positions have been excluded from the 2011 budget to arrive at the baseline prior to the application of the required additional POG reductions: Introduction: Budget Highlights • Section 1 —19 ANNUALIZED POG BASE SALARY FUND I DEPT PRIORITY DESCRIPTION & BENEFITS REMARKS 015-Finance RM Financial Services $59,300 From 5 to 4 FSS's to process Specialist Accounts Payable, Accounts Receivables, Cash Receipts 031-Police PS Police Officer $77,800 Reduction in School Resource Officer funding- Yakima School District 051-City Hall Maintenance RM Building Maintenance $51,500 Building Superintendent now Specialist only remaining permanent FTE to support City Hall 131-Parks & Recreation QL Aquatics Specialist $51,300 From 2 to 1 permanent FTE to support 2 pools 131-Parks & Recreation QL Parks Superintendent $109,200 Responsibilities spread to other supervisors 141- Streets ED & PS Street Maintenance $60,000 Maintenance schedule Specialist adjusted The following chart summarizes the General Government (i.e. tax-supported) position eliminations identified in the policy issue submitted to balance the 2011 budget. There are several other personnel changes included in the budget, including position downgrades, and reallocations to other funds where appropriate. The detail of all of the proposals, including the related dollar amounts of the reductions, is included in Section III. The column titled "POG Reductions" is incorporated in the budget as presented. The "Supplementary Reductions" are not currently budgeted, but presented to be a concise summary of other options currently identified if additional reductions are needed. 20 — Section I • Introduction: Budget Highlights 2011 PROPOSED ADJUSTMENTS IN PERSONNEL GENERAL GOVERNMENT PERMANENT POSITIONS POG REDUCTIONS - - SUPPLEMENTARY REDUCTIONS - DEPARTMENT I POSITION # STATUS # STATUS TOTAL POG POLICE Assistant Evidence Technician* 1 Filled 1 PS Patrol Officer 4 Vacant 2 Future vacancies 6 PS Corrections Officer 1 Vacant - 1 PS Deputy Chief 1 Vacant 0 1 PS Building Maintenance 1 Retirement - 1 PS Crime Analyst/Intel Sup* 1 Filled 1 PS Total Police 8 3 11 FIRE Firefighter 6 Filled 2 Filled 8 PS Secretary 1 Filled - 1 PS Deputy Fire Marshall - 1 Retirement 1 PS Total Fire 7 3 10 FINANCE/INFORMATION SYSTEMS Position Eliminations 5 4 Filled, 1 Vacant - 5 RM Position Additions (5) New positions - (5) RM IS Manager 1 Vacant (consolidation) - 1 RM Total Finance/Info Systems (Net) 1 0 1 LEGAL Legal Assistant - 1 Filled 1 RM PLANNING Assistant Planner 1 Retirement - 1 ED ENGINEERING Development Engineer 1 Filled - 1 RM Construction Inspector - 1 Filled 1 RM Total Engineering 1 1 2 CODE ADMINISTRATION Code Compliance Officer 1 Filled - 1 PS Animal Control 1 Filled - 1 PS Total Code Administration 2 0 2 STREETS Street Maintenance Specialist 1 Filled 1 ED Traffic Sign Specialist 1 Filled 1 PS Total Streets 1 1 2 Total General Government 21 9 30 GENERAL GOVERNMENT SUMMARY Eliminated 16 Filled 6 Filled 22 Eliminated 10 Vacant 3 Vacant 13 Added (5) New ( *See Detail Introduction: Budget Highlights • Section 1 —21 2011 PROPOSED ADJUSTMENTS IN PERSONNEL - NON GENERAL GOVERNMENT ANNUALIZED BASE SALARY FUND I DEPT DESCRIPTION & BENEFITS REMARKS 124-Office of Reinstate 1 Home $58,000 Budgeted Policy Issue-funded by Neighborhood Dev. Remodeling Technician reduction in outside professional services for contractors 151-Public Safety Add 1 911 Calltaker $54,600 Reorganization in of 911 and Communications Dispatch operations, funded by Add 1 Public Safety $62,500 increase in Countywide 911 Excise Admin. Assistant tax-Budgeted Policy Issue 462-Transit Add 2 Transit Operators $110,000 Agreement with Se lah to add 1 route Total Non-Gen Gov Funds 5 additional positions $285,100 Each of these proposals has an identified revenue source or other expenditure reduction to support the additional cost 2011 GENERAL GOVERNMENT BUDGET PROPOSED ADJUSTMENTS BY TYPE (From 2010 Amended Budget) As INCORPORATED IN 201 I EXPENDITURE TYPE AMOUNT % OF TOTAL Salaries / Wages and Benefits ($1,701,327) 54.7% Overtime (114,021) 3.7% Medical / Dental (56,432) 1.8% Supplies / Small Tools (178,623) 5.7% Other Supplies (3,000) 0.1% Fuel 119,177 (3.8%) Professional Services (325,128) 10.5% Other Services 111,622 (3.6%) Travel / Training (43,350) 1.4% Intergovernmental Services (786,206) 25.3% Capital Outlay (164,610) 5.3% Debt Service (6,045) 0.2% Interfund Payments 36,882 (1.2%) TOTAL ($3,111,061) 100.0% 22 — Section I • Introduction: Budget Highlights 2011 GENERAL GOVERNMENT BUDGET PROPOSED ADJUSTMENTS BY DEPARTMENT As INCORPORATED IN 2011 EXPENDITURE TYPE AMOUNT % OF TOTAL City Administration ($46,034) L5% Finance (515,918) 16.6% Municipal Court (28,577) 0.9% Police (1,024,380) 32.9% Fire (518,737) 16.7% CED (580,705) 18.7% Street & Traffic (383,655) 12.3% Parks (211,792) 6.8% Other Departments 198,737 (6.4%) TOTAL (I) ($3,111,061) 100.0% Even though the Policy Issue for budget reductions totals $2.3 million, the 2010 budget was reduced by a net of about $800,000 in the budget development process prior to the posting of the policy issue. As discussed in the Changes in Personnel section above, 6 positions for a total of just over $400,000 were extended from the mid-2010 reductions. The measures taken to reduce jail costs have also been successful, so that jail costs are also being reduced by about $750,000. These reductions were offset by increases in medical rates and fuel and other operating supplies/contracts, so the savings were reduced. (Note: even though the chart above shows Medical/Dental insurance going down from the prior year, the full family rates were actually increased by almost 10%. The net reduction arises from the position eliminations.) The total reduction needed to totally balance the 2010 budget was $3.1 million or 5.2% of the 2010 budget. TAX PROPOSAL — 6% INCREASE IN LIEU TAX ON UTILITIES Because the General Government budgets have been severely reduced by almost 10% over the past 2 years, a tax proposal is being offered that can be used by Council to reduce the budget cuts. The current tax on city-owned utilities is 14% on Water and Wastewater; 9% on City Refuse; and 10% on Yakima Waste. Of these taxes, 3.5% is dedicated for Parks operations, and 0.5% for Police capital. The remainder supports General Fund operations. A 1% increase on these utilities would generate about $336,000 annually. Part of the proposal is to start imposing the tax on the new Stormwater utility, which is expected to generate another $19,000 annually, so that the total tax proposal would generate about $355,000 per each 1%, or a total of $2,130,000 for a 6% increase. For city utilities, the in lieu tax is included in the rates charged for service. Any increase would need to be evaluated for a potential rate adjustment for each of the utility. Nob Hill Water and Yakima Waste Systems would also be impacted by a tax increase. However, taxes on these outside utilities are added on to the rates charged for service. The increase to a typical household for the full 6% would be about $58 per year, or just slightly less than $5 per month. This calculation is made assuming a 96-gallon can for Refuse; yard waste for 9 months out of the year; and 1,600 cubic foot monthly consumption for Water/Wastewater. Introduction: Budget Highlights • Section 1 — 23 City Council has the authority to increase this tax without sending it to a public vote. Under the Charter, the Council could also refer it for voter consideration in a special election. The following charts summarize the tax increase at various percentages for both an average household and in total for the applicable utilities. The additional revenue this tax could raise is also then spread ratably among the POG categories and compared to the proposed budget reductions to assist Council in their deliberations. A significant provision of the tax proposal is to sunset it in three years to enable the economy to hopefully recover. A summary of these utility taxes imposed by other cities is included as the last chart. Statewide, the trend is that cities without a Business and Occupation tax have higher utility taxes. Regionally, many cities have significant taxes on these utilities, with the exception of Union Gap, which has a larger than average sales tax per capita because of its retail base. IMPACT ON AVERAGE HOUSEHOLD AND BENEFIT TO 2011 BUDGET AVERAGE MONTHLY COST PER HOUSEHOLD 2% 4% 6% Wastewater $0.71 $1.42 $2.13 Water 0.34 0.68 1.02 Refuse 0.50 1.00 1.50 Stormwater 0.07 0.14 0.22 $1.62 $3.24 $4.87 ANNUAL REVENUE GENERATION ANNUALIZED 2% 4% 6% Wastewater $145,000 $290,()00 $435,000 Water 314,786 629,571 944,357 Refuse 96,667 193,333 290,000 Stormwater 37,880 75,760 113,640 Nob Hill Water 51,429 102,857 154,286 Yakima Waste 66,000 132,000 198,000 $711,761 $1,423,522 $2,135,283 POTENTIAL REVENUE DISTRIBUTED BY PRIORITIES OF GOVERNMENT IMPACT ON REDUCTION LEVELS 6% TAX REVENUE 2011 DISTRIBUTION NET POG BUDGET REDUCTIONS REDUCTIONS BASED ON POG REDUCTIONS Public Health & Safety $2,563,583 $1,519,261 $1,044,322 Resource Management 608,498 360,615 247,883 Economic Development 239,664 142,032 97,632 Quality of Life 162,820 96,492 66,328 Customer Service /Communications 22,000 13,038 8,962 Strategic Partnerships 6,487 3,844 2,643 $3,603,052 $2,135,283 $1,467,769 x- Includes Budgeted and Supplemental Reductions if needed. 24 - Section I • Introduction: Budget Highlights lights WASTEWATER, WATER, REFUSE, STORMWATER IN LIEU UTILITY TAX ANALYSIS CURRENT 2010 201 I VALUE OF TOTAL TAX REVENUE BY UTILITY RATES ESTIMATE BUDGETED I% TAX Internal: Water 14% $980,000 $1,015,000 $72,500 Wastewater 14% 2,129,000 2,203,500 157,393 Refuse 9% 435,000 435,000 48,333 Stormwater (new tax) 18,940 Subtotal City Utilities 3,544,00() 3,653,500 297,166 Outside: Nob Hill Water 14% 360,000 360,000 25,714 Yakima Waste 10% 330,000 330,000 33,000 TOTALS $4,234,000 $4,343,500 $355,880 REVENUE GENERATED BY 6% INCREASE $2,135,283 RATE CHANGE IN THE BI-MONTHLY BILL "TYPICAL" RESIDENTIAL ACCOUNT CURRENT INCREASE 6% RATES 1% 6% ANNUAL Wastewater 16 UOC ( $71.02 $0.71 $4.26 $25.56 Water 16 UOC 34.08 0.34 2.04 12.24 Refuse 96 Gallon Cart 32.15 0.32 1.92 11.52 Yard Waste 24.16 0.24 1.44 6.48 Billed by City Utilities $161.41 $1.61 $9.66 $55.80 Stormwater (Annual) Billed on Property Tax Statement $43.00 $0.43 $2.58 $2.58 Total Annual Increase-"Typical" Household $58.38 Average per Month $4.87 Per Bi-Monthly Bill $9.73 (1) 16 Units of Consumption (UOC) is the assumption used to set an irrigation base and to make other adjustments for residential accounts if historical use is not available. Introduction: Budget Highlights • Section 1 —25 COMPARATIVE IN -LIEU UTILITY TAX RATES - 2010 TOP 23 CITIES - WASHINGTON STATE WATER SEWER GARBAGE STORM WATER Granger 36% 36% 36% Wapato 33% 33% 33% Almira 25% 25% 25% Grandview 24% 6% 40% Toppenish 23% 23% 23% Sprague 20% 4% 4% Ephrata 20% 20% 8% Port Townsend 20% 20% 20% 20% Vancouver 20% 20% 20% 20% Davenport 18% 18% 18% Medical Lake 17% 17% 17% Battle Ground 16% 16% 10% 16% Seattle 16% 12% 12% 12% Winthrop 15% 15% 6% Creston 14% 14% 14% Yakima 14% 14% 9% 14% 7% Kennewick 14;0 7 7% 1% Brewster 12% 12% 12% Kittitas 12% 12% 6% Deer Park 12% 12% 12% Olympia 12% 7% 10% 10% Harrah 12% 12% Prosser 12% 14% YAKIMA VALLEY CITIES WATER SEWER GARBAGE Granger 36% 36% 36% Wapato 33% 33% 33% Grandview 24% 6% 40% Toppenish 23% 23% 23% Yakima 14% 14% 9% Moxee 6% 6% 6% Naches 6% 6% Tieton 6% 6% 5% Selah 6% 6% 6% Union Gap Not levied Source: 2010 AWC Tax and User Fee Survey 26 — Section I • Introduction: Budget Highlights lights GENERAL SUMMARY In the 2011 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 2011 budget. General Government: Net reduction of 27 FTE's and $2.3 million dollars between the 2010 adopted and the 2011 proposed budgets. When added to the reductions in 2009, General Government is operating with 48.3 fewer FTE's -- more than 10% of the 2009 level of 475.6 FTE's. Total City-Wide: Other operations added a total of 5 FTE's, supported by new revenue or reductions in professional services. Additionally, cost containment / reduction has been a high priority for the City of Yakima for years; and has resulted in the favorable cost comparisons reflected below: Staff Reductions: The per capita number of General Government employees has decreased over the past decade, from 7.0 FTE's in 1999 down to 5.9 FTE's in 2009 — per every 1,000 population. Note: this comparison is prior to the 10% reductions identified in the 2010 and 2011 budgets. Payroll Costs: The City of Yakima had the fourth (4th) lowest average per capita payroll costs out of the twelve comparison cities.* Total Expenditures — The City of Yakima had the third (3rd) lowest average per capita total expenditures out of the twelve comparison cities.* * The data utilized in the above comparisons was compiled from the State Auditor's Local Government Comparative Statistics for 2009 — the most recent data available, and includes comparisons of all Washington State cities with populations between 45,000 and 120,000. (Refer to Section II for more information on the above comparisons) 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 positive and stable credit rating — during some very difficult times. However, the current national recession combined with the potential impacts of I-1100 and 1105 — should it be approved by voters in November — would reduce City resources past the point of its ability to provide existing services to our citizens. The current service levels are simply not sustainable in the future should revenues continue to fall. Introduction: Budget Highlights • Section 1 —27 28 — Section I • Introduction: Budget Highlights GENE' L GOVE ' MENT: YE EV REVIEW 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, information systems, etc. 2010 year-end revenue estimate is $47,698,766 — which is virtually the same as 2009 actual, and only 0.5% greater than 2008 actual. 2010 year-end expenditure estimate is $49,298,806 — ($958,571) or (1.9%) under the authorized, amended budget of S50,257,377 due to cost containment measures instituted in April. Over half of this reduction resulted from savings in outside jail costs, with the balance coming from salary savings from position vacancies, and furloughs for the remainder of 2010. PARKS AND RECREATION FUND Services provided include Parks programs and maintenance. 2010 year-end revenue estimate is $4,163,315 — $66,683 or 1.6% above the actual levels for 2009, with the primary increase being in Charges for Services, indicating higher program usage since there was not a rate increase from 2009 to 2010. Note: In order to balance revenues to expenditures in each of the General Government funds, property tax was reallocated as appropriate. 2010 year-end expenditure estimate is $4,133,782 — ($84,873) or (2%) under the 2010 amended budget. The cost containment areas were mainly in salaries from vacant positions and furloughs. STREETS FUND Street and Traffic operations and maintenance. 2010 year-end revenue estimate is $5,215,763 — ($362,875) or (6.5%) less than actual levels for 2009, and $592,514 or 10.2% less than 2008. This decrease is primarily due to property tax reallocation to match the significant expenditure reductions made in the 2009 and 2010 budget. 2010 year-end expenditure estimate is $5,308,117 — ($116,545) or (2.1%) under the 2010 amended budget. The cost containment savings result primarily from salary and benefit savings due to unfilled positions and furloughs. General Government: Year in Review • Section II —1 2010 GENERAL GOVERNMENT ESTIMATED REVENUES AND EXPENDITURES PARKS & REC STREET GENERAL FUND FUND FUND TOTAL ACTUAL BEGINNING FUND BALANCE $4,612,886 $339,555 $1,461,266 $6,413,707 Estimated Actual Revenue 47,698,766 4,163,315 5,215,763 57,077,844 TOTAL ESTIMATED RESOURCES 52,311,652 4,502,870 6,677,029 63,491,551 Less: Estimated Expenditures 49,298,806 4,133,782 5,308,117 58,740,705 ESTIMATED ACTUAL ENDING FUND BALANCE 2010 $3,012,846 $369,088 $1,368,912 $4,750,846 As described in the mid-year budget reduction transmittal, the effects of the national economic recession worsened through 2010. The 2010 General Government revenue budget was $58,072,948, so the year-end estimate of $57,077,844 is about $1 million or (1.7%) less than budgeted. The 2009 actual revenue for these 3 funds was $57,290,716, so the 2010 estimate is slightly less than the prior year actual. The annual rate of inflation as measured by the CPI-U (All Urban Consumers) is 0.85% in June for all cities, and the Seattle index is (0.5%). So the City is tracking with national and regional trends in its revenue levels. It should be noted that typically the year-end revenue estimates made at the time of the preliminary budget are greater than the current year budget, which is a component in ending the year with a balanced budget. The revenue decrease in both 2009 and 2010 is the trigger that led to the development of 2011 estimates trending below the prior year, which in turn necessitated the budget cuts proposed for 2011. GENERAL GOVERNMENT COMPARISON 2010 BUDGET VS. YEAR-END ESTIMATE 2010 2010 YEAR-END EST. AMENDED YEAR-END AS PERCENT OF FUND / DEPARTMENT BUDGET ESTIMATE VARIANCE BUDGET Police $22,859,639 $22,113,475 $746,164 961% Fire 9,148,439 9,173,749 (25,310) 100.3% Information Systems 2,589,406 2,551,811 37,595 98.5% Transfers 2,402,275 2,417,275 (15,000) 100.6% Code Administration 1,504,058 1,471,526 32,532 97.8% Police Pension 1,373,040 1,365,994 7,046 99.5% Legal 1,142,950 1,105,994 36,956 96.8% Financial Services 1,460,278 1,366,044 94,234 93.5% Municipal Court 1,262,770 1,235,668 27,102 97.9% Engineering 1,002,489 957,711 44,778 95.5% Utility Services 1,256,127 1,246,931 9,196 99.3% Environmental Planning 768,484 713,459 55,025 92.8% Records 445,728 433,448 12,280 97.2% City Manager 518,563 508,443 10,120 98.0% Human Resources 467,478 447,897 19,581 95.8% City Hall Maintenance 404,486 404,288 198 100.0% Indigent Defense 480,000 480,000 0 100.0% Purchasing 432,432 420,163 12,269 97.2% Intergovernmental 382,865 372,865 10,000 97.4% 2 - Section II • General Government: Year in Review 2010 2010 YEAR-END EST. AMENDED YEAR-END AS PERCENT OF FUND/ DEPARTMENT BUDGET ESTIMATE VARIANCE BUDGET City Council 207,265 203,065 4,200 98.0% Nonrecurring Expenses 0 155,000 (155,000) n/a State Examiner 103,000 103,000 0 100.0% Hearing Examiner 45,605 51,000 (5,395) 111.8% TOTAL GENERAL FUND $50,257,377 $49,298,806 $958,571 98.1% Parks & Recreation 4,218,655 4,133,782 84,873 98.0% Street & Tra ffic Operations 5,424,662 5,308,117 116,545 97.9% TOTAL GENERAL GOVERNMENT $59,900,694 $58,740,705 $1,159,989 98.1% The preceding table provides a breakdown of the year-end estimate of General Government budgets for 2010. All operating budgets with employees participated in a 5 day furlough (with the exception of 24 hour service areas) as part of the mid-year reduction. The largest positive variance (expenditure savings) is in the Police Department and relates to the reduction in outside jail costs along with salary savings from vacancies. In Financial Services, Engineering, and Planning the large variances are the result of holding / eliminating vacant positions. Currently, Fire, Transfer, and Hearing Examiner budgets show being overspent for 2010. Fire is tied to excess overtime necessitated by Sawmill site fires. The transfer of utility taxes to the Parks budget is estimated to slightly exceed budgeted levels. The Hearing Examiner budget is tied to the volume and complexity of issues, and will likely exceed the budget. In response to a request from the Council Budget Committee, a new category called Nonrecurring Expenses has been added to General Fund. This will be used to budget for one-time outlays, and consists solely of Cash-outs at retirement in the current 2010 estimate and 2011 budget, although it could also in the future be used for equipment, etc. The reason for creating a separate area to budget these occasional expenses is so that the comparative feature of the POG model is not skewed by these anomalies. The $155,000 listed in the above chart represents the estimate of separation cash-outs of accrued leave for the positions identified to be laid off, as this would be effective December 31 and still accounted for as 2010 business. At this point in time, this category has been excluded from the POG chart, and is a reconciling item from the total budget. Because the legal level of control for budget authority is the fund level, and General Fund is still estimated to be underspent in total, staff is not proposing budget amendments for these overages at this time. GENERAL FUND THREE YEAR COMPARISON 2008 2009 2010 YEAR-END ACTUAL ACTUAL ESTIMATE BEGINNING BALANCE $6,250,708 $6,798,731 $4,612,886 Revenues 47,450,685 47,615,448 47,698,766 TOTAL RESOURCES 53,701,393 54,414,179 52,311,652 Expenditures 46,902,662 49,801,293 49,298,806 ENDING BALANCE $6,798,731 $4,612,886 $3,012,846 General Government: Year in Review • Section II — 3 GENE L GOVE • MENT: 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 2011, total General Government revenues are budgeted to be $56,863,960, ($213,884) or (0.4%) less than the 2010 year-end estimate of S57,077,844. Total beginning cash reserves are estimated to be $4,750,845, ($1,662,862) or (25.9%) less than the 2010 estimate of $6,413,707. The decline in cash reserves is occurring in the General Fund and Street Fund, as these funds contain public safety components that were allocated a use of reserves for the 2010 budget. Variances in revenues at this combined level are explained briefly below. A more detailed explanation follows the chart. Projected sales tax for 2011 is (2.0%) less than the 2010 estimate and it is still 2.9% below the 2009 levels. Property Tax increase of $262,500 or 1.9% includes the levy limit increase of 1%, plus new construction and annexation. The increase in Franchise and Utility taxes (2011 over 2010) of $219,500 or 1.9% is largely due to rate adjustments proposed in a few of the major utilities. Charges for services are up by $130,569 or 2.1% primarily because of increase in interfund services (city services and customer services). State Shared Revenue is being reduced by ($208,800) or (7.1%) mainly because Yakima crime rate decreased such that the City is no longer eligible to receive the high crime distribution. Other revenues are ($99,834) or (14.2%) below 2010. 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 down ($234,860) or (18%) which is largely due to the transfer of police related operating grants being moved into a new Police Grant operating fund. 4 — Section II • General Government: Revenue Trends GENERAL GOVERNMENT RESOURCES THREE YEAR COMPARISON 2011 % OF - 2011 vs. 2010 - 2009 2010 PERCENT BUDGET 2010 INCREASE PERCENT SOURCE ACTUAL ESTIMATE CHANGE FORECAST TOTAL (DECREASE) CHANGE General Sales Tax $12,623,990 $12,504,000 (1.0 %) $12,258,000 21.6% ($246,000) (2.0 %) Criminal Justice Sales Tax a 2,521,881 2,526,000 0.2% 2,507,000 4.4% ($19,000) (0.8 %) Property Tax 13,889,500 14,019,500 0.9% 14,282,000 25.1% 262,500 1.9% Franchise & Utility Taxes 12,093,883 11,822,000 (2.2 %) 12,041,500 21.2% 219,500 1.9% Charges for Services 5,648,396 6,117,541 8.3% 6,248,110 11.0% 130,569 2.1% State Shared Revenue 3,084,952 2,939,100 (4.7 %) 2,730,300 4.8% (208,800) (7.1 %) Fines and Forfeitures 1,631,592 1,734,266 6.3% 1,736,400 3.1% 2,134 0.1% Other Taxes 1,492,626 1,402,747 (6.0 %) 1,395,000 2.5% (7,747) (0.6 %) Other Revenue 942,937 701,754 (25.6 %) 601,920 1.1% (99,834) (14.2 %) Transfers from Other Funds 1,198,701 1,230,546 2.7% 1,259,000 2.2% 28,454 2.3% Other Intergovernmental 1,450,423 1,303,790 (10.1 %) 1,068,930 1.9% (234,860) (18.0 %) Licenses and Permits 711,835 776,600 9.1% 735,800 1.3% (40,800) (5.3 %) TOTAL REVENUE $57,290,716 $57,077,844 (0.4 %) $56,863,960 100.0% ($213,884) (0.4 %) Beginning Fund Balance 8,622,738 6,413,707 (25.6 %) 4,750,845 ($1,662,862) (25.9 %) TOTAL RESOURCES $65,913,454 $63,491,551 (3.7 %) $61,614,805 ($1,876,746) (3.0 %) (1) Some Criminal Justice sales tax is allocated to the Law and Justice capital fund (a non - general Governmental fund) for capital needs. GENERAL GOVERNMENT RESOURCES 2010 YEAR -END ESTIMATE AND 2011 BUDGET FORECAST Sales Tax /Crim. Justice Sales Tax $14,765,000 Property Tax $14,282,000 Franchise & Util. Taxes $12,041,500 Charges for Services $6,248,110 State Shared Revenue 1.1 $2,730,300 2011 vs. 2010 Estimate Decrease Total Resources Fines and Forfeitures $1,736,400 Amount $1,876,746 Other Taxes $1,395,000 Percent 3.0% Other Revenue . $601,920 ■2011 Budget Transfers from other Funds IF 1 $1,259,000 02010 Y/E Estimate Other Intergovernmental IQ, $1,068,930 Licenses and Permits $735,800 Beginning Fund Balance (1) 1-1 4,750,845 $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 General Government: Revenue Trends • 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 new 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 summarized dedicated revenue by priority. DEDICATED REVENUES 2011 DEDICATED PRIORITY OF GOVERNMENT REVENUE Public Health & Safety $6,375,736 Resource Management 3,004,974 Economic Development 1,452,215 Quality of Life 967,865 Customer Service & Communications 1,548,563 Strategic Partnerships 302,777 TOTAL $13,652,130 Revenue Projection 56,863,960 DIFFERENCE $43,211,830 This demonstrates that about 24% of General Government revenue is either dedicated to or generated by certain operations. GENERAL SALES TAX (SINGLE LARGEST REVENUE SOURCE FOR GENERAL FUND) 2011 revenue projection is $12,258,000 - ($246,000) or approximately (2.0%) less than the 2010 year-end estimate of $12,504,000. Up until 2009, the City was experiencing modest growth over the rate of inflation in this revenue source. The adopted budget for sales tax was $12,703,000 for 2010, which was a modest 0.6% growth rate over 2009 actual, with the anticipation that the economy would flatten early in 2010 and start a slight recovery later in the year. Unfortunately, Sales Tax continued to be below the prior year actual through the 1st quarter of 2010, so that the revenue estimate is lowered by about ($200,000). Sales Tax has recovered slightly since April 2010 after 18 months of consecutive drops (October 2008 through March 2010), but with the coming wave of layoffs in the government sector and consumer pessimism, we are forecasting this volatile revenue source to decline again in 2011. The 2010 year-end estimate of $12,504,000 is about ($120,000) or (1%) less than 2009 actual. This sales tax level is well below actual collections for 2006 of $12.7 million. Streamlined Sales Tax legislation which changed the taxable sales event from origin to destination took effect in July, 2008. Although this drastically affected sales tax receipts in many cities across the state, Yakima experienced just a slight increase in net sales from this legislative change. 6 - Section II • General Government: Revenue Trends 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 such as utility tax have generally kept up with inflation, and the City has been successful in obtaining grants. The decrease in the 2009 actual and 2010 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% 32% „ - __ 30% 28% 26% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 COMPARISON OF PER CAPITA SALES TAX WITH OTHER WASHINGTON STATE CITIES The City's sales tax per capita is compared with 11 other similar sized cities throughout the State (see the following chart). The data shown was compiled from the State Auditor's Office statistics, and is the most recent data available. Sales tax revenue is the City's largest single source of General Government revenue. The City of Yakima's per capita sales tax is $234, lower than 4 of the cities compared. The interesting fact about this chart is that Yakima was 4th from the bottom in this category last year (i.e. 2008). Although we declined in 2009 from $255 to $234 per capita, the average dropped from $296 to $246, which indicates that our negative trend was not as severe as other cities our size in the state. General Government: Revenue Trends • Section II — 7 2009 PER CAPITA SALES & USE TAXES 0 ) COMPARABLE CITIES BETWEEN 45,000 AND 12,000 IN POPULATION (Rounded to the closest dollar) $600 - Yakima's per capita sales tax is $234, which is $12 less than the average city per capita of $246 $500 - $354 $359 $367 $400 094, A $266 $300 $227 $231 $234 $194 $195 $196 $149 $200 $100 - $0 E; . $174 _ Pasco Richland Kent Auburn Kennewick Renton Bellingham Yakima Kirkland Redmond Everett Bellevue (1) Data compiled from the State Auditor's Local Government Comparative Statistics. 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. For both 2010 and 2011 the General Fund is proposed to receive the full amount of the City's share of these sales tax revenues; these revenues are restricted to providing criminal justice related services and are allocated based on operating vs. capital needs. This tax is expected to generate $905,000 for the City in 2011 and is allocated in the City's budget forecast as noted in the following chart. 0.1% CRIMINAL JUSTICE SALES TAX 2010 2011 YEAR -END BUDGET FUND 2009 ACTUAL ESTIMATE FORECAST General Fund $902,308 $924,000 $905,000 Law and Justice Capital 33,688 0 0 TOTAL $935,996 $924,000 $905,000 Since population is a component of the tax distribution, annexations have a positive influence on this revenue. This tax revenue is affected by the same regional economic factors that affect the General Sales Tax revenue, as outlined above. 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 8 — Section II • General Government: Revenue Trends 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 $1,717,000 in 2011, and is allocated in accordance with the following chart. 0.3% CRIMINAL JUSTICE SALES TAX 2010 2011 YEAR-END BUDGET FUND 2009 ACTUAL ESTIMATE FORECAST General Fund (for Criminal Justice Expenditures) $1,619,573 $1,602,000 $1,602,000 Public Safety Communications 143,300 125,000 90,000 Law and Justice Capital 33,000 25,000 25,000 TOTAL $1,795,873 $1,752,000 $1,717,000 Exhibit III contains a summary of how these funds have been spent over the past 5 years. PROPERTY TAX Property tax provides approximately 25.1% of all General Government revenue in the 2011 budget. The 2011 budget is based on a 1% increase in the property tax levy, as currently allowed by state law, or approximately $155,000, plus a conservative 0.7% or $107,500 increase for new construction for a total increase of $262,500 for a total of $15,784,765. It should be noted that recent information from the Yakima County Assessor's Office indicates that new construction is estimated to be 1.7%. When coupled with an increase for recent annexations of about $50,000, the 2011 revenue budget could conservatively be increased by an additional $170,000 for Council consideration during upcoming deliberations. The 2011 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 $155,000 for 2011) — 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. General Government: Revenue Trends • Section II — 9 The following graph depicts the 2011 budgeted allocation of the City's property tax revenues. PROPERTY TAX ALLOCATION BY FUNCTION 2011 GENERAL LEVY PROPERTY TAX TOTAL — $15,784,765 Fire & Police Pension $2,907,355 18.4% General Fund $7,823,410 49.6% Parks $1,546,000 9.8% Streets $3,508,000 22.2% 2011 PROPOSED GENERAL PROPERTY TAX LEVY 2010 201 1 2010 Esr. 2009 AMENDED 2010 BUDGET VS. ACTUAL BUDGET ESTIMATED FORECAST 2011 BUDGET General $8,057,000 $8,523,000 $8,732,300 $9,228,000 5.7% Parks & Recreation 1,623,500 1,788,500 1,665,500 1,546,000 (7.2 %) Street & Traffic 4,209,000 3,708,000 3,615,700 3,508,000 (3.0 %) SUB -TOTAL GENERAL GOVERNMENT 13,889,500 14,019,500 14,013,500 14,282,000 1.9% Fire Pension 1,414,441 1,502,765 1,502,765 1,502,765 0.0% TOTAL $15,303,941 $15,522,265 $15,516,265 $15,784,765 1.7% Note: Property tax is allocated among the General Government funds based on each funds need to balance to available resources. The City has compiled data from the State Auditor's Office that identifies per capita property tax for comparable cities throughout the State. The following chart compares the City's per capita property tax income for 2009. It shows the City of Yakima's property tax per capita is $167, which is $87 less than the average of all the comparable cities. Yakima ranks third lowest in tax per capita of the 12 comparable cities. 10 — Section II • General Government: Revenue Trends 2009 PER CAPITA PROPERTY TAXES 0 ) COMPARABLE CITIES BETWEEN 45,000 AND 125,000 IN POPULATION (Rounded to the closest dollar) $450 - Yakima's per capita property tax is $167, which is $87 less $356 $362 $400 - than the average city per capita of $254 $332 $311 $350 $298 $275 $283 $300 • $210 $250 • $189 $ $148 167 $200 • $112 $150 - $100 - $50 • Pasco Kennewick Yakima Auburn Bellingham Richland Bellevue Kirkland Kent Everett Renton Redmond (1) Data compiled from the State Auditor's Local Government Comparative Statistics. FRANCHISE AND UTILITY TAXES Franchise and utility taxes are collectively the third largest category of General Government revenues. They comprise 21.2% of 2011 projected General Government revenues and 25.2% of projected 2011 General Fund Revenues. ➢ 2011 projection is $12,041,500 — $219,500 or 1.9% above the 2010 year -end estimate of $11,822,000. These revenues are largely a function of weather conditions and utility rates in the Valley. In 2010, gas utility taxes dropped off significantly from the prior year because of rate adjustments and a mild winter, so that this category is now estimated to come in below 2009 actual collections. In response, increases in this revenue category have been conservatively budgeted in 2011. Franchise and utility taxes combined are the only major revenue source keeping pace with the rate of inflation, primarily because of the growth in customers resulting from recent annexations and rate increases implemented by utility providers. BUSINESS AND OCCUPATION TAX AND BUSINESS LICENSE FEES The following chart represents Business License Fees, Business and Occupation (B & 0) tax, and Utility taxes on private and public utilities. (Note: Yakima does not impose a general purpose business and occupation tax, which is generally charged on the gross volume of sales.) Yakima's $157 per capita B & 0 / Utility Tax ranks the second lowest of the twelve cities in this comparison. This is $25 below the $182 average per capita revenue. General Government: Revenue Trends • Section II —11 2009 PER CAPITA B & 0 /UTILITY TAXES 0 ) COMPARABLE CITIES BETWEEN 45,000 AND 125,000 IN POPULATION (Rounded to the closest dollar) $300 - Yakima's per capita B &O / utility tax is $157, which is $25 less than the average city per capita of $182 $215 $250 $196 $201 $212 $178 $182 $185 $190 $200 • $149 $157 $157 $158 $150 $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. 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 half), are fees paid by other City funds for General Fund services (legal, administration, purchasing, utility billing, etc). ➢ 2011 projection is $6,248,110. This is a 2.1% or $130,569 increase from the 2010 estimate. STATE SHARED REVENUE State shared revenues are the fifth largest category of revenues received for General Government Operations. ➢ 2011 projection for all revenues within this category is $2,730,300; a decrease of ($208,800) from the 2010 year -end estimate of $2,939,100. The year -end estimate reflects only 6 months of Criminal Justice High Crime funding. The pool of high crime cities is reset in July, and even though the City estimated during 2010 budget development that it would remain in the funding mix, the actual per capita crime rates dropped in comparison to other cities enough to drop below the funding threshold. The 2011 budget assumes the further reduction of this revenue for the full year, although the calculation will be made again in July 2011. Although the State has had its own revenue shortfalls, the legislature recognized the importance of services provided by local government and did not cut these distributions. • Liquor excise and liquor profits taxes are budgeted at $1,058,200 for 2011 — ($56,800) below the 2010 year -end estimate of $1,115,000. This revenue source is at risk, depending on the outcome of the November election on Initiatives 1100 and 1105. (See discussion on the initiatives in Section I Budget Highlights.) 12 — Section II • General Government: Revenue Trends • Gas Tax in the Street Fund is budgeted at $1,250,000, the same as the 2010 year- end estimate. This tax is calculated by the State using population figures as published by the Office of Financial Management (OFM). Since its base is a per gallon tax, the relatively high gas prices coupled with the economic downturn has flattened this tax that is dedicated to street maintenance. FINES AND FORFEITURES 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 $1,736,400 for 2011. OTHER TAXES This category includes Business Licenses, Gambling Taxes and County Road Tax from annexation. The 2011 projection is $1,395,000, down (0.6 %) or ($7,747) - virtually the same as the 2010 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 2011, $601,920 is expected to be generated in this category, a decrease of ($99,834) or (14.2%) from the 2010 year end estimate of $701,754, since current market conditions have greatly reduced interest earnings. The largest revenue sources in this category include: Interest income - 2011 projection is $323,000. Operating transfer from other funds - 2011 projection is $1,259,000 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 2011 budget of $1,068,930 is down ($234,860) or (18.0%) from the 2010 estimate because of a spike in Federal operating grant programs completed in 2009 and 2010. The new Federal stimulus grant for additional Police officers is being accounted for in a separate fund because of the stringent reporting requirements. A complete list of grants is included in the Capital Improvement section later in this document. General Government: Revenue Trends • Section II -13 LICENSES AND PERMITS The 2011 budget is $735,800, (5.3%) or ($40,800) less than the 2010 year-end estimate of $776,600. 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. REVENUE TRENDS — OVERVIEW The overall decline in General Government revenues is reflective of an economy confronted with high unemployment and low median income, with limited growth in elastic revenues and existing tax limitations. GENERAL GOVERNMENT RESOURCE COMPARISON GENERAL FUND 2011 projected beginning balance is $3,012,845 — down ($1,600,041) from the 2010 beginning balance of $4,612,886. 2011 projected revenue is $47,787,665 — $88,899 or .2% over the 2010 year-end estimate. The increase in property and utility tax is offset by reductions in sales tax, criminal justice state shared revenue, and interest earnings, resulting in a virtually flat budget. PARKS AND RECREATION FUND 2011 projected beginning balance is S369,088 — $29,533 or 8.7% over the 2010 beginning balance of S339,555. 2011 projected revenue is $4,034,485 — ($128,830) or (3.1%) below the 2010 year-end estimate. This is mainly due to the change in property tax allocation resulting from the expenditure reductions in accordance with the POG model. STREET FUND 2011 projected beginning balance is $1,368,912 — ($92,354) or (6.3%) under the 2010 year-end estimate, due to the approved use of reserves for Public Safety purposes in the 2010 budget. 2011 projected revenue is $5,041,810 — ($173,953) or (3.3%) under the 2010 year-end estimate. The property tax revenue allocation is reduced 5.4% to meet the resource allocation targets of the "Priorities of Government" model. Total General Government Revenues for 2010 are estimated to be about (0.4%) less than 2009 actual revenues. 14 — Section II • General Government: Revenue Trends GENERAL GOVERNMENT THREE YEAR RESOURCE COMPARISON 2010 2011 2009 YEAR -END 2010 BUDGET 2011 ACTUAL ESTIMATED VS. 2009 FORECAST VS. 2010 RESOURCES RESOURCES % CHANGE RESOURCES % CHANGE General Fund Revenue $47,615,448 $47,698,766 0.2% $47,787,665 0.2% General Fund Beg Balance 6,798,731 4,612,886 (32.2 %) 3,012,846 (34.7 %) Total General Fund Revenue 54,414,179 52,311,652 (3.9 %) 50,800,511 (2.9 %) Parks & Recreation 4,096,632 4,163,315 1.6% 4,034,485 (3.1 %) Parks Beg Balance 451,356 339,555 (24.8 %) 369,088 8.7% Total Parks 4,547,988 4,502,870 (1.0 %) 4,403,573 (2.2 %) Street & Traffic Fund Revenue 5,578,638 5,215,763 (6.5 %) 5,041,810 (3.3 %) Street & Traffic Beg Balance 1,372,651 1,461,266 6.5% 1,368,912 (6.3 %) Total Street & Traffic 6,951,289 6,677,029 (3.9 %) 6,410,722 (4.0 %) Total Revenue 57,290,718 57,077,844 (0.4 %) 56,863,960 (0.4 %) Total Beginning Balance 8,622,738 6,413,707 (25.6 %) 4,750,846 (25.9 %) Total General Government $65,913,456 $63,491,551 (3.7 %) $61,614,806 (3.0 %) Total General Government Revenues for 2011 are projected to decrease by (0.4 %) below 2010 estimates. The largest revenue source for the General Government Funds is sales tax. Yakima has moved from the lower half to the upper of per capita sales tax compared with similar cities in the State. However, Yakima is in the lower 1/3 of ranking in all other revenue comparisons per capita and is still the third lowest out of the twelve cities compared in combined per capita revenue. Yakima's $1,253 per capita taxes is $570 below the average of $1,823 based on 2009 actual data, as demonstrated in the chart below. The most important conclusion from this analysis is that the City of Yakima has a very limited revenue / tax base compared with most cities of its size in the state, and yet provides similar or enhanced services and programs to its citizens. 2009 PER CAPITA TOTAL REVENUES 0 ) COMPARABLE CITIES BETWEEN 45,000 AND 125,000 IN POPULATION (Rounded to the closest dollar) $3,500 Yakima's per capita total revenue is $1,253, which is $570 $2,696 $2,776 less than the average city per capita of $1,823 $3,000 $2,332 A $2,171 $2,500 $1,561 $1'6 $1,737 $1,776 $1,841 E 37 $2,000 $1,253 7 1 i $1,500 $1,023 $1,075 r $1,000 $500 0 II P I I il il Pasco Kennewick Yakima Auburn Kent Bellingham Renton Kirkland Everett Bellevue Richland Redmond (1) Data compiled from the State Auditor's Local Government Comparative Statistics. Includes state and federal grants, taxes and charges for services, and excludes debt proceeds. General Government: Revenue Trends • Section II — 15 GENERAL GOVERNMENT RESOURCES BY MAJOR CATEGORY 2010 2010 2011 2011 % 2008 2009 AMENDED YEAR -END FORECAST CHANGE FI ACTUAL ACTUAL BUDGET ESTIMATE BUDGET 2010 EST. I 2 3 4 5 4 -5 GENERAL FUND Property Tax $7,437,787 $8,057,000 $8,523,000 $8,738,300 $9,228,000 5.6% Sales Tax 13,719,058 12,623,990 12,703,000 12,504,000 12,258,000 (2.0 %) Criminal Justice Sales Tax 2,605,242 2,521,881 2,642,000 2,526,000 2,507,000 (0.8 %) Franchise Tax 40,245 52,945 42,000 42,000 42,000 0.0% Utility Tax 11,059,750 12,040,938 12,340,000 11,780,000 11,999,500 1.9% Other Taxes 1,490,032 1,484,163 1,487,000 1,390,000 1,390,000 0.0% Licenses and Permits 993,122 711,835 689,000 776,600 735,800 (5.3 %) Intergovernmental Revenue 2,664,042 3,1)73,099 2,967,279 2,849,190 2,441,530 (14.3 %) Charges for Services 4,808,037 4,719,438 4,914,680 4,950,366 5,068,985 2.4% Fines and Forfeitures 1,582,815 1,631,592 1,736,900 1,734,266 1,736,400 0.1% Miscellaneous Revenue 1,010,088 657,445 511,294 367,044 339,450 (7.5 %) Other Financing Sources 467 1,120 1,000 1,000 1,000 0.0% Transfers From Other Funds 40,000 40,000 40,000 40,000 40,000 0.0% TOTAL REVENUE $47,450,685 $47,615,446 $48, 597, 153 $47,698,766 $47,787,665 0.2 % Beginning Fund Balance $6,250,708 $6,798,731 $4,612,886 $4,612,886 $3,012,845 (34.7 %) TOTAL GENERAL FUND $53,701,393 $54,414,177 $53,210,039 $52,311,652 $50,800,510 (2.9 %) PARKS & RECREATION FUND Property Tax $1,800,000 $1,623,500 $1,788,500 $1,665,500 $1,546,000 (7.2%) Intergovernmental Revenue 153,252 178,965 147,701) 143,700 107,700 (25.1 %) Charges for Services 886,086 898,505 946,365 954,365 963,365 0.9% Miscellaneous Revenues 251,578 218,863 192,420 194,750 183,420 (5.8 %) Other Financing Sources 39,134 43,098 55,000 55,000 55,000 0.0% Transfers From Other Funds 1,046,359 1,133,701 1,117,000 1,150,000 1,179,000 2.5% TOTAL REVENUE $4,176,409 $4,096,632 $4,246,985 $4,163,315 $4,034,485 (3.1 %) Beginning Fund Balance $549,439 $451,356 $339,555 $339,555 $369,088 8.7% TOTAL PARKS & RECREATION FUND $4,725,848 $4,547,988 $4,586,540 $4,502,870 $4,403,573 (2.2%) STREET AND TRAFFIC OPERATIONS FUND Property Tax $4,220,202 $4,209,000 $3,708,000 $3,615,700 $3,508,000 (5.4 %) County Road Tax 9,260 8,463 0 12,747 5,000 n/a Fuel Tax Street 1,306,335 1,249,776 1,200,000 1,250,000 1,250,000 4.2% Other Intergovernmental 91,834 33,535 0 0 0 n/a Charges for Services 35,274 30,453 215,760 212,810 215,760 0.0% Miscellaneous Revenue 62,317 20,079 15,050 52,800 3,050 (79.7 %) Other Financing Sources 83,055 2,332 50,000 31,160 20,000 (60.0 %) Transfers From Other Funds 25,000 40,000 40,546 40,000 0.0% TOTAL REVENUE $5,808,277 $5,578,638 $5,228,810 $5,215,763 $5,041,810 (3.6 %) Beginning Fund Balance $1,386,069 $1,372,651 $1,461,266 $1,461,266 $1,368,912 (6.3 %) TOTAL STREET & TRAFFIC OPERATIONS FUND $7,194,346 $6,951,289 $6,690,076 $6,677,029 $6,410,722 (4.2 %) TOTAL GENERAL GOVERNMENT $65,621,587 $65,913,454 $64,486,655 $63,491,551 $61,614,805 (3.0 %) TOTAL REVENUE 57,435,371 57,290,716 58,072,948 57,077,844 56,863,960 (0.4 %) Total Beginning Fund Balance 8,186,216 8,622,738 6,413,707 6,413,707 4,750,845 (25.9 %) TOTAL RESOURCES 65,621, 587 65, 913, 454 64 ,486,655 63,491,551 61,614,805 (3.0 %) 16 - Section II • General Government: Revenue Treads GENERAL GOVERNMENT: EXPENDITURE TRENDS 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 2002 to 2011. 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 to remain within available resources. See Exhibit III for more information. PERCENTAGE INCREASE OF CRIMINAL JUSTICE COSTS VS. OTHER GENERAL GOVERNMENT FUNCTIONS AND CPI 2001 BUDGET TO 2011 BUDGET Criminal MEMIr Justice $9,711,113 55.6% Other ,767,62 25.3% Consumer Price Index 27.1% Cumulatively, over the past ten years Criminal Justice budgets have increased 55.6 %. By comparison, all other General Government expenses have increased by only 25.3 %. During this same ten -year period the Seattle- Tacoma Consumer Price Index increased by 27.1 %. Criminal justice cost increases are more than 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 loss of Motor Vehicle Excise tax (MVET) in 2000 and caps on Property Tax Levies, 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 2009, 2010 estimate and 2011 budget). Even though the 2011 budget is showing a reduction of ($238,446) or almost (1 %) in accordance with the POG model, the ratio of all other general government operations in comparison to Criminal Justice costs decreased from just under 2:1 to 2.2 :1. The .3% Criminal Justice Sales Tax has helped in addressing some of the issues facing our community, but Cities only get 40% of the collected tax, Yakima County gets the other 60 %. General Government: Expenditure Trends • Section 11 - 17 In reviewing the following chart and graph, it should be noted that it includes only General Fund expenditures on criminal justice. Another $1,071,000 is budgeted in the Law and Justice Capital Fund, (not a General Government fund). Also good to review is the Criminal Justice Expenditures as a Percentage of Total General Fund chart below, which demonstrates that over half 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 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 the Police Department has been successful in obtaining grants in recent years. SCHEDULE OF CRIMINAL JUSTICE EXPENDITURES FOR THE YEARS ENDED DECEMBER 31, 2009 THRU 2011 FORECAST % CHANGE 2009 2010 201 1 2011 FROM DESCRIPTION ACTUAL ESTIMATE FORECAST 2010 Police Operations & Administration 18,881,222 18,978,201 18,672,607 (1.6 %) Outside / Inside Jail Costs 3,948,662 3,135,274 3,162,654 0.9% District Court / Municipal Court & Probation 1,306,180 1,237,433 1,234,194 (0.3 %) Prosecution Costs / Indigent Defense 1,230,589 1,232,871 1,252,282 1.6% Other Related Expenses Police Pension 1,316,580 1,365,994 1,404,590 2.8% Emergency Dispatch Transfer 440,000 425,000 410,000 (3.5 %) Transfer — Law & Justice Center (1) 161,958 161,000 161,000 0.0% Other Related Expenses Total 1,918,538 1,951,994 1,975,590 1.2% GRAND TOTAL 27,285,191 26,535,773 26,297,327 (0.9 %) (1) Utility Tax transfer from General Fund. CRIMINAL JUSTICE EXPENDITURES AS A PERCENTAGE OF TOTAL GENERAL FUND 58.0% - 54.0% - ,:..,:.:.� •:� :.:.::::; ;•: „.� ,. • 46.0% - • • 42.0% - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Actual Actual Actual Actual Actual Actual Actual Actual Forecast Budget Criminal Justice --il -- All Other 18 — Section II • General Government: Expenditure Trends The following chart compares per capita criminal justice expenditures with comparable cities based on 2009 data. Yakima has the second highest per capita percentage of revenue spent on Criminal Justice among the 12 comparable cities. PERCENT OF PER CAPITA TOTAL REVENUE SPENT ON CRIMINAL JUSTICE IN 2009 0 ) COMPARABLE CITIES BETWEEN 45,000 AND 125,000 IN POPULATION (Rounded to the closest dollar) 23.6 The percentage of Yakima's total revenue spent on criminal 25.0% Justice is 21.2 %, which is 5.5% more than the average 21.2 % percentage of 15.7% 183% 18.5% 20.0% • 16.1% 17.0 % 17.5% 14.9% 12.1% 12.6% 15.0 9.0 7.7 10.0 5.0% - a 0.0 Richland Redmond Bellingham Bellevue Everett Kent Kirkland Renton Kennewick Pasco Yakima Auburn (1) Data compiled from the State Auditor's Local Government Comparative Statistics. The following chart depicts city -wide staffing levels per 1,000 population. GENERAL GOVERNMENT BUDGETED POSITIONS COMPARISONS 0 ) FOR THE LAST TEN YEARS 7.0 8.00 .r 5.9 5,8 5.9 5.9 7.00 6. II i I " I ' i PIiI 1.00 0.00 , / 1 ' 1999 2001 20 03 2005 2007 2009 1999 2001 2003 2005 2007 2009 Number of General Government Employees 457.2 429.0 448.9 471.1 496.3 501.6 Employees Per Capita 7.0 5.9 5.7 5.8 5.9 5.9 Square Miles 19.3 24.1 24.2 25.3 25.9 28.7 Population 65,262 73,040 79,220 81,470 83,646 84,850 (1) Does not include temporary employees (number of employees are stated in full -time equivalents). General Government: Expenditure Trends • Section 11 - 19 There are 5 major events that have had significant effect on City Staffing levels: 1. City population has increased 19,588 from 1999 to 2009, or 30%. 2. In 2000 33.21 positions were deleted as a cost containment measure associated with the City's loss of MVET Revenue. 3. 2002 through 2004 36.35 FTE's were added in Police, Fire and Streets to support services to a large newly annexed area. 4. In 2005, 12.75 FTE's in Police, Courts and legal were added as a result of voter approval of a 0.3% increase in the sales tax rate for Criminal Justice. 5. 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 to the Rural Library District, and 4 positions were added because of Public Safety grants. It should be noted that only a net of 44 new FTE positions have been added since 1999, only 11.4% over the past 10 years. Most of these additions were either in response to criminal justice issues, annexations, or both. This is reflective of the next chart on per capita expenditures on payroll, where Yakima is fourth from the bottom of the comparable cities in 2009. This comparison is also prior to the large reductions necessitated by the economic downturn starting in 2010. In these two budget years (2010 and 2011), staffing levels have been reduced by about 50 positions. This will reduce the ratio to about 5.3 employees per 1,000 population—the lowest rate in over a decade. SALARY AND BENEFIT COSTS The following graph is based on information gathered by the State Auditor's Office. It identifies the per capita salary costs. This analysis 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 8 other cities. To maintain levels of service during periods of peak workload demands, the City uses contract and temporary labor when possible. 20— Section II • General Government: Expenditure Trends 2009 PER CAPITA EXPENDITURES ON PAYROLL 0 ) COMPARABLE CITIES BETWEEN 45,000 AND 125,000 IN POPULATION (Rounded to the closest dollar) $959 Yakima's per capita expenditures on payroll is $542 which is $1,000 - $96 less than the average city per capita of $638 $845 $863 $900 • $686 $708 $800 - $596 $637 $662 $700 $542 $600 • $423 $398 $500 • $338 $400 - $300 $200 • i !` $100 $0 Pasco Kennewick Auburn Yakima Richland Renton Bellingham Kent Kirkland Everett Bellevue Redmond (1) Data compiled from the State Auditor's Local Government Comparative Statistics. Finally, total City expenditures per capita are the third lowest of the 12 cities compared, $672 below the average. Yakima does offer full services (i.e. Police, Fire, Water, Wastewater, Irrigation, Refuse, and Transit) to its citizens. Even though we provide services that some other cities do not provide, we are still the third to last in cost per citizen, proving Yakima does "more with less" in delivering important services to our constituency. 2009 PER CAPITA TOTAL CITY EXPENDITURES 0 ) COMPARABLE CITIES BETWEEN 45,000 AND 120,000 IN POPULATION (Rounded to the closest dollar) Yakima's per capita total expenditures are $1,359, which is $2,992 $672 less than the average city per capita revenue of $2,031 $2,819 $3,000 - $2,446 $2,500 $2,144 $2,005 $2,021 $2,026 $2,027 $2,031 $2,000 �n $1,251 $1,254 $1,359 $1,500 $1,000 - $500 - $0 Pasco Kennewick Yakima Auburn Kent Bellingham Kirkland Renton Everett Bellevue Redmond Richland (1) Data compiled from the State Auditor's Local Government Comparative Statistics. General Government: Expenditure Trends • Section 11 — 21 GENERAL GOVERNMENT EXPENDITURE SUMMARY The following chart illustrates that the total 2011 General Government budget is $56,789,633, ($3,111,061) or (5.2%) less than the 2010 amended budget of $59,900,694. 2010 -2011 GENERAL GOVERNMENT BUDGET 2010 2010 EST. 2011 — CHANGE 2011 vs. 2010 - AMENDED YEAR-END BUDGET - PRELIMINARY VS. AMENDED - BUDGET EXPENDITURES FORECAST DOLLARS PERCENT General 50,257,377 49,298,806 47,741,765 (2,515,612) (5.0%) Parks & Recreation 4,218,655 4,133,782 4,006,862 (211,793) (5.0%) Street & Traffic Operations 5,424,662 5,308,117 5,041,006 (383,656) (7.1%) TOTAL GENERAL GOVERNMENT 59,900,694 58,740,705 56,789,633 (3,111,061) (5.2%) Section III that follows summarizes the budget reductions being proposed to bring the 2011 General Government Budget within available resources. 22 — Section II • General Government: Expenditure Trends DEP • TMENT INFO ' TION The following summary chart and departmental listings offer a more detailed look at the budget reduction options that were developed by Department Directors working with City Management, Finance and Budget staff to achieve budget savings within the Priorities of Government model established by the City Council last year. The underlying objectives in meeting the model included the preservation of public health and safety, continued ability to meet federal and state mandates, and continued delivery of essential services. Unfortunately, in this current economic climate those options for budget reductions having minimal impact to public service were already used in prior years. However, all efforts were made to find savings that would allow the City to meet its fundamental legal obligations, to maintain sufficient levels of public safety and keep the impact to citizens at the lowest level possible while balancing the budget within current revenue expectations. Reductions categorized as "Priorities of Government (POG)" Reductions are reflected in this proposed balanced budget forecast. This budget contains the vital assumption that no major interruption of established revenue streams occurs and that: a. The liquor tax and other tax reduction initiatives discussed earlier in this forecast are not passed by the citizens, b. Current and future agreements with organized labor unions result in zero impact to expenditures, c. The State of Washington does not increase the City's pension contribution rate (as is currently under discussion in Olympia), and that d. No other new programs or initiatives are undertaken that would adversely impact the City. These POG reductions total $2.3 million and are found in the left columns of the first chart. The "Supplementary" Reductions are not reflected in the balanced budget presented in this Forecast but are available as options should any of the conditions mentioned above occur. Estimated revenue loss that would result from passage of the liquor tax initiatives is approximately $1.1 million. Other impacts as listed above are unknown. Supplementary reductions, which include 5 furlough days for staff comprise another $1.3 million in potential budget savings. Brief details of each category of proposed and supplementary reductions by department follow the summary chart. Narrative descriptions of the consequences of these budget reductions are being drafted, and will be distributed with the balance of this forecast document. The POG reductions that have already been integrated into the budget are listed first, followed by the Supplementary reductions excluding furloughs. Furlough amounts are listed only on the first summary chart. Subtotals by amount and category are listed for each department. Department Information • Section III — 1 N PRIORITIES OF GOVERNMENT REDUCTION OPTIONS SUMMARY I cn co cm 8 ' POG REDUCTIONS - SUPPLEMENTARY REDUCTIONS - FURLOUGHS O PRIORITY OF GOVERNMENT PERSONNEL NON - PERSONNEL TOTAL PERSONNEL NON - PERSONNEL TOTAL (5 DAYS) TOTALS Public Health & Safety • Police $690,138 $127,470 $817,608 $280,341 $23,000 $303,341 - $1,120,949 d Fire 643,000 - 643,000 377,000 - 377,000 - 1,020,000 Municipal Court - - - - - - - - Finance 30,000 - 30,000 - - - - 30,000 c City Manager / Legal - - - - - - - - r Community & Economic Development 134,417 - 134,417 - - - - 134,417 Street & Traffic Operations - 124,500 124,500 57662 20,000 77662 _ - _ 202,162 c:) Furloughs - - -- - - - $56,055 56,055 1,497,555 251,970 1,749,525 715,003 43,000 758,003 56,055 2,563,583 p o Resource Management Finance 110,741 45,000 155,741 - 31,000 31,000 - 186,741 City Manager / Legal 20,585 - 20,585 74,333 - 74,333 - 94,918 Human Resources 18,000 - 18,000 - - - - 18,000 Community & Economic Development 165,500 10,000 175,500 52,647 - 52,647 - 228,147 Resource Management Furloughs - - - - - - 80,692 80,692 314,826 55,000 369,826 126,980 31,000 157,980 80,692 608,498 Economic Development Community & Economic Development 44,986 35,000 I. 79,986 - - - - 79,986 Street & Traffic Operations 62,274 10,500 72,774 - 58,000 58,000 - 130,774 Economic Development Furloughs - - - - - - 28,904 28,904 107,260 45,500 152,760 - 58,000 58,000 28,904 239,664 Quality of Life Street & Traffic Operations - 4,000 4,000 - - - - 4,000 Parks 30,000 15,000 45,000 60,000 29,500 89,500 - 134,500 Quality of Life Furloughs - - - - - - 24,320 24,320 30,000 19,000 49,000 60,000 29,500 89,500 24,320 162,820 Customer Service /Communications - - - - - - 22,000 22,000 Strategic Partnerships - - - - - - 6,487 6,487 Grand Total $1,949,641 $371,470 $2,321,111 $901,983 $161,500 $1,063,483 $218,458 $3,603,052 CITY OF )il:7■1/i/a: 2011 BUDGET REDUCTION OPTIONS POLICE PRIORITIES OF GOVE.' • DUCTIONS INVESTIGATIVE DIVISION — 112 PERSONNEL CHANGES - CAPITAL OUTLAY / MAINT I OP COSTS - ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION 1 PS Downgrade Forensic $84,000 1 position total (filled) Supervisor to Evidence Technician. Eliminate Assistant Evidence Technician. PREVENTATIVE PATROL DIVISION — I 13 2 PS 4 Positions $323,369 4 positions total (vacant) Patrol Officers" 3 PS Downgrade 1 Captain 520,673 Position to Sergeant 4 PS Eliminate 29 vehicles 511,470 Includes Vehicles from Service Units 104 taken home and 112. Needs to he negotiated (on hold) DETENTION DIVISION — 115 5 PS 1 Position $69,231 1 position total (vacant). Corrections Officer 6 PS Jail cost reductions $100,000 ADMINISTRATION — 119 7 PS 1 Position $134,542 1 position total (vacant) Deputy Chief 8 PS Downgrade Crime $36,815 Downgrade position (filled). Position Analyst/Intel Sup to eliminated in next tier. Crime/Intel Analyst 9 PS 1 Position 542,093 Vacancy due to retirement. Calculated 6 Building Maintenance months 10 PS Reallocate City H a l l ($20,585) Building Maintenance Supervisor 11 PS Eliminate out of state S16,000 Not to include extradition travel Department Information • Section III — 3 SUPPLEMENT ,:Y BUDGET REDUCTIONS PREVENTATIVE PATROL DIVISION — 113 P PERSONNEL CHANGES - CAPITAL OUTLAY I MAINT i OP COSTS - ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION I TEM DESCRIPTION 12 PS 2 Expected vacancies $80,000 due to retirement / resignation 13 PS Deactivate SWAT $120,000 Eliminate overtime $23,000 Small tools, equipment, uniforms for Team for training, call-outs, SWAT backfill of shifts, & shift differential pay ADMINISTRATION — 119 14 PS 1 Position $80,341 Eliminates position (filled). Position was Crime Analyst / Intel downgraded in first tier. Supervisor POLICE TOTALS POG REDUCTIONS - SUPPLEMENTARY REDUCTIONS - PRIORITY OF GOVERNMENT PERSONNEL NON-PERSONNEL PERSONNEL NON-PERSONNEL Public Health & Safety PS $690,138 $127,470 $280,341 $23,000 Resource Management RM -0- -0- -0- -0- Economic Development ED -0- -0- -0- -0- Quality of Life QL -0- -0- -0- -0- Customer Service/Communications CS -0- -0- -0- -0- Strategic Partnerships SP -0- -0- -0- -0- TOTAL $690,138 $127,470 $280,341 $ POG TOTAL $817,608 SUPPLEMENTARY TOTAL $303,341 GRAND TOTAL $1,120,949 4 — Section III • Department Information CITY Of 2011 BUDGET REDUCTION OPTIONS FIRE PRIORITIES OF GOVE.' • DUCTIONS SUPPRESSION — 122 p — PERSONNEL CHANGES - - CAPITAL OUTLAY I MAINT I OP COSTS - ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION I PS 6 Positions 5525,000 Place Ladder Truck on standby / reserve Firefighter status. 5 Firefighters retained for overtime savings 2 PS Overtime Savings 550,0(() 5 Firefighter overtime savings ADMINISTRATION — 129 3 PS 1 Position S68,000 1 position total (filled) secretary II SUPPLEMENT 'Y BUDGET REDUCTIONS SUPPRESSION — 1 22 4 PS 2 Positions (filled) 5180,000 2 of 5 retained positions in first tier are Hrefighter eliminated. 5 PS Brownout - Overtime 5150,000 Partial temporary closure of station if understaffed ADMINISTRATION — 129 5 PS 1 Position 547,000 1 position total (filled) - to retire midway Deputy Fire Marshall 2011 FIRE TOTALS POG REDUCTIONS - SUPPLEMENTARY REDUCTIONS - PRIORITY OF GOVERNMENT PERSONNEL NON-PERSONNEL PERSONNEL NON-PERSONNEL Public Health &T. Safety PS 5643,000 5-0- 5377,000 Resource Management RM -0- -0- -0- -0- Economic Development ED -0- -0- -0- -0- Quality of Life QL -0- -0- -0- -0- Customer Service/Communications CS -0- -0- -0- -0- Strategic Partnerships SP -0- -0- -0- -0- TOTAL 5643,000 5-0- $377,000 5-0- POG TOTAL $643,000 SUPPLEMENTARY TOTAL $377,000 GRAND TOTAL $1 ,020,000 Department Information • Section III — 5 , - - CITY OF idliipter 2011 BUDGET REDUCTION OPTIONS MUNICIPAL COURT PRIORITIES OF GOVE MENT DUCTIONS The Municipal Court is not proposing any Priority of Government reductions SUPPLEMENT Y BUDGET REDUCTIONS The Municipal Court is not proposing any Supplementary reductions M ICIPAL COURT TOTALS POG REDUCTIONS - SUPPLEMENTARY REDUCTIONS - PRIORITY OF GOVERNMENT PERSONNEL CAPITAL OUTLAY PERSONNEL CAPITAL OUTLAY Public Health & Safety PS $-0- $-0- $-0- $-0- Resource Management RM -0- -0- -0- -0- Economic Development ED -0- -0- -0- -0- Quality of Life QL -0- -0- -0- -0- Customer Service/Communications CS -0- -0- -0- -0- Strategic Partnerships SP -0- -0- -0- -0- TOTAL $-0- $-0- $-0- $-0- POG TOTAL $-O- SUPPLEMENTARY TOTAL $-0- GRAND TOTAL $-0- 6 — Section III • Department Information CITY OF ),2.41//ht 2011 BUDGET REDUCTION OPTIONS FIN CE PRIORITIES OF GOVE MENT DUCTIONS TRANSFER PUBLIC SAFETY DISPATCH — 645 P PERSONNEL CHANGES - CAPITAL OUTLAY I MAINT I OP COSTS - ITEM O $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION 1 13 Reduce Transfer $30,000 Net result of IS reorganization to Public Safety Communications FINANCE — 624 2 RM Reallocate Director $31,233 20% to Public Safety from Finance DATA PROCESSING — 63 3 RN/I Delete IS Manager $109,565 Vacant position position 4 Reallocate Position 039,8411) "30 % salary to IS RIVI PS Comm Manager Note: Not shown in Public Safety" 5 RM Delete 1 Position $45,484 Computer Op Tech position (filled) 4/1 Computer Op Tech 6 RM Delete 1 Position 579,673 Senior Analyst (filled) 4/1 Senior Analyst 7 RM Delete 1 Position $75,076 Senior Applications Developer (vacant) Senior Appl Developer full year 8 RM Delete 1 Position ti61,146 Applications Developer (filled) 4/1 Application Developer 9 RM Delete 1 Position $59,355 Applications Developer (filled) 4/1 Application Developer 10 RM Add 1 Position (574,710) New position 4/1 Project Manager 11 RM Add 1 Position (570,658) New position 4/1 Sr Appl Syst Designer 12 RM Add 1 Position ($58,470) New position 4/1 Web Master 13 RM Add 1 Position ($52,102) New position 4/1 Client Svcs Tech 14 RM Add 1 Position ($55,011) New position 4/1 Client Svcs Tech 15 RM Discontinue $29,000 Maintenance and support to existing maintenance contracts computer software systems 16 RM PC replacements and $8,000 mist 40k to 32k 17 RM Orthophotography $8,000 Department Information • Section III — 7 SUPPLEMENT ,:Y BUDGET REDUCTIONS DATA PROCESSING — 63 I P PERSONNEL CHANGES - CAPITAL OUTLAY I MAINT I OP COSTS - ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION 18 RM Discontinue 831,000 Maintenance and support to existing maintenance contracts computer software systems FIN ."'"' TOTALS POG REDUCTIONS - - SUPPLEMENTARY REDUCTIONS - PRIORITY OF GOVERNMENT PERSONNEL NON-PERSONNEL PERSONNEL NON-PERSONNEL Public Health & Safety PS 530,000 $-0- $-0- $-0- Resource Management RM 110,741 45,000 -0- 31,000 Economic Development ED -0- -0- -0- -0- Qua lity of Life QL -0- -0- -0- -0- Customer Service/Communications CS -0- -0- -0- -0- Strategic Partnerships SP -0- -0- -0- -0- TOTAL $140,741 545,000 $-0- $21,000 POG TOTAL $185,741 SUPPLEMENTARY TOTAL $31,000 GRAND TOTAL $216,741 8 — Section III • Department Information CITY OF ),ilti/rht 2011 BUDGET REDUCTION OPTIONS CITY AGEMENT / LEGAL PRIORITIES OF GOVE • MENT • DUCTIONS PERSONNEL — 623 p — PERSONNEL CHANGES - - CAPITAL OUTLAY I MAINT I OP COSTS - ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION 1 RM Voluntary Furlough 518,1100 Human Resources CITY HALL MANAGEMENT — 633 2 RM Transfer 50% Building 520,585 Full year.. Retirement Maint Supervisor to date unknown Police Building (Hayter) SUPPLEMENT Y BUDGET REDUCTIONS LEGAL COUNSEL — 622 1 RM 1 Position $61,333 1 position total (filled) Legal Assistant 2 RM .3 Position $13P0 Temporary CITY , AGEMENT / LEGAL TOTALS POG REDUCTIONS - SUPPLEMENTARY REDUCTIONS - PRIORITY OF GOVERNMENT PERSONNEL NON-PERSONNEL PERSONNEL NON-PERSONNEL Public Health & Safety PS 5-0- 5-0- 5-0- Resource Management RM 38,585 -0- 74,333 -0- Economic Development ED -0- -0- -0- -0- Quality of Life QL -0- -0- -0- -0- Customer Service/Communications CS -0- -0- -0- -0- Strategic Partnerships SP -0- -0- -0- -0- TOTAL 538,585 -0- $74,333 -0- POG TOTAL $38,585 SUPPLEMENTARY TOTAL $74,333 GRAND TOTAL $112,918 Department Information • Section III — 9 CITY OF / tikiffiet 2011 BUDGET REDUCTION OPTIONS COMMUNITY & ECONOMIC DEVELOPMENT PRIORITIES OF GOVE MENT LDUCTIONS CODE ADMINISTRATION — 149 p — PERSONNEL CHANGES — — CAPITAL OUTLAY / MAINT / OP COSTS — ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION I'S 1 Position $66,673 1 position total (tilled) Code Compliance Officer ANIMAL CONTROL — 223 2 PS 1 Position $67,744 1 position total (filled) Animal Control Officer COMPREHENSIVE PLANNING — 310 3 ED 1 Position S23,601 Retirement 7/31 Assistant Planner 4 ED .33 Position S Move to Parks Planner 5 ED Reduce printing and $15,000 Switch to postcard notification postage costs 6 ED Fee Increase Unbuclgeted policy issue $8,000 HEARINGS EXAMINER — 313 7 ED $20,000 Savings by using Planning Commission. ENGINEERING — 528 8 RM 1 Position $8Z281 1 position total (filled). Development Consolidate function to Design/Dev Engineer position 9 M4 Transfer .9 FTE to $78,219 1 position total (filled) Service Units Wastewater 000 (.10), 441 Stormwater (.40) & 473 Wastewater (.50) 10 RM Miscellaneous line $10,000 Decrease various line item expenses items 11 RM Fee increase Un budgeted policy issue $10,000 10 — Section III • Department Information SUPPLEMENT Y BUDGET REDUCTIONS ENGINEERING — 528 p — PERSONNEL CHANGES - - CAPITAL OUTLAY / MAINT I OP COSTS - ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION 14 RM 1 Position 65,446 1 position total (filled) Service Units Construction Inspector 000 (.78), 473 & 474 Wastewater (.11 respectively) CO ITY & ECONOMIC DEVELOPMENT TOTALS POG REDUCTIONS - SUPPLEMENTARY REDUCTIONS - PRIORITY OF GOVERNMENT PERSONNEL NON-PERSONNEL PERSONNEL NON-PERSONNEL Public Health & Safety PS $134,417 5-0- 5-0- 5-0- Resource Management RM 165,500 10,000 52,647 -0- Economic Development ED 44,986 35,000 -0- -0- Quality of Life QL -0- -0- -0- -0- Customer Service/Communications CS -0- -0- -0- -0- Strategic Partnerships SP -0- -0- -0- -0- TOTAL $344,903 $45,000 $52,647 5-0- POG TOTAL $389,903 SUPPLEMENTARY TOTAL $52,647 GRAND TOTAL $442,550 Department Information • Section III — 11 CITY or 2011 BUDGET REDUCTION OPTIONS STREETS & T . FFIC PRIORITIES OF GOVE1'?"' l'?1:DUCTIONS PUBLIC AREA LIGHTING — 116 PERSONNEL CHANGES - CAPITAL OUTLAY I MAINT I OP COSTS - ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION 1 PS Operating Supplies - $10,500 Reduce purchase of street lighting General materials. Eliminates annual relamp program. Replace bulbs as they burn out. 2 I'S Pacific Power & Light 528,000 Reduced utility costs through LED replacements program, reduced hours for downtown pedestrian lighting, removal of some arterial lighting. 3 PS R & M Contractors $5,000 Reduce use of contract labor for repair of street lighting. STREET MAINTENANCE — 521 4 ED 1 Position $62,274 1 position total (filled) Service Units 521 Street Maintenance (.8) & 524 (.2) Specialist 5 ED Operating Supplies - 53,500 Eliminates work category "Work for General Others" 6 ED Operating Supplies - 57,000 Weed spraying chem lea Is. On ly one General application per year instead of 2 or 3. PEDESTRIAN I BIKEWAY I MAINTENANCE — 522 7 QL Operating Supplies - $4,000 Supplies for sidewalk and bikeway General repairs. Eliminates work category "Pedestrians & Bi keways" TRAFFIC CONTROL — 525 8 PS Operating Supplies - $25,000 Reduce purchases for replacement Signals controllers, detectors and signal heads. 9 PS Operating Supplies - 522,000 Reduce purchases of signs and sign posts. Signs PS Operating Supplies - $34,000 Reduce purchases of traffic paint and Lines thermoplastic markings. 12 — Section III • Department Information SUPPLEMENT* I.?Y BUDGET REDUCTIONS STREET MAINTENANCE — 521 P PERSONNEL CHANGES - CAPITAL OUTLAY / MAINT I OP COSTS - ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION 11 ED Operating Supplies - 558,000 Street repairs materials & supplies. General Eliminates chip seal program. SNOW & ICE CONTROL — 524 12 PS Operating Supplies - $15,000 De-Icing and traction materials General TRAFFIC CONTROL — 525 13 PS Operating Supplies 55,000 Materials for building/maintaining traffic & Small Tools/ barricades & Traffic counter supplies Equipment TRAFFIC ENGINEERING — 526 14 PS 1 Position $57,662 Traffic Sign Specialist STREETS & T I.? A, FFIC TOTALS POG REDUCTIONS - SUPPLEMENTARY REDUCTIONS - PRIORITY OF GOVERNMENT PERSONNEL NON-PERSONNEL PERSONNEL NON-PERSONNEL Public Health & Safety PS 5-0- $124,500 557,662 $20,000 Resource Management RM -0- -0- -0- -0- Economic Development ED 62,274 10,51)0 -0- 58,000 Quality of Life QL -0- 4,000 -0- -0- Customer Service/Commiinications CS -0- -0- -0- -0- Stra tegic Partnerships SP -0- -0- -0- -0- TOTAL $h2,274 5139,000 557,662 $78,000 POG TOTAL $201,274 SUPPLEMENTARY TOTAL $135,662 GRAND TOTAL $336,936 Department Information • Section III —13 CITY OF / tikiffiet 2011 BUDGET REDUCTION OPTIONS PA b! S D RECREATION PRIORITIES OF GOVE MENT 1.?,[.,DUCTIONS PARK MAINTENANCE — 421 p — PERSONNEL CHANGES — — CAPITAL OUTLAY / MAINT / OP COSTS — ITEM 0 $ COST $ COST # G DESCRIPTION REDUCTION DESCRIPTION REDUCTION ITEM DESCRIPTION 1 QL Temporary Positions 610,000 Reduce Park Maintenance positions. COMMUNITY RECREATION — 422 2 QL Summer Movies 55,000 Eliminate. Includes some temporary time SENIOR CENTER — 425 3 QL Temporary Positions 515,000 Close Harman Center Tuesday and Thursday nights, as well as Saturday SPORTS — 426 4 QL Temporary Positions $2,500 62,500 Eliminate Youth Baseball program. 5 QL Temporary Positions $2,500 S2,500 Reduce Adult sports programs. ADMINISTRATION — 429 6 QL Advertising Expense $5,000 Reduce advertising by 50% SUPPLEMENT*. BUDGET REDUCTIONS PARK MAINTENANCE — 421 7 QL MLK Spray Park $17,000 Do not operate - Water & WW savings 8 QL Mi Iler Park Spray Park $7,500 Do not operate - Water & W W savings COMMUNITY RECREATION — 422 9 QL Temporary Positions 610,000 Eliminate Free Summer Playground Program. Includes some supplies 10 QL Summer Concerts $5,000 Eliminate. Includes some temporary time ADMINISTRATION — 429 11 QL 1 Position - on hold $50,000 Delay Hiring - 8 months Adm. Associate 14 — Section III • Department Information P 4 ' S 4 D RECREATION TOTALS POG REDUCTIONS - SUPPLEMENTARY REDUCTIONS - PRIORITY OF GOVERNMENT PERSONNEL NON-PERSONNEL PERSONNEL NON-PERSONNEL I'll blic Hea Ith & Safety I'S -U- -U- -U- -0 - Resou rce Management R M -0- -0- -0- -0- Econo mic Development ED -0- -0- -0- -0- Quality of Life QL $30,000 $15,000 60,000 $29,500 Customer Service/Communications CS -0- -0- -0- -0- Stra tegic Partnerships SI' -0- -0- -0- -0 - TOTAL $30,1100 515,1100 $60,11110 5 POG TOTAL $45,000 SUPPLEMENTARY TOTAL $89,500 GRAND TOTAL $134,500 Department Information • Section III —15 16 — Section III • Department Information WHAT YOU PAY AND WHAT YOU GET This section is presented to assist the reader in understanding the taxes they pay, what 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 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. MAJOR TAXES PAID SALES AND USE TAX There is a 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 6.5% while the City receives .85% for the general fund and an additional 0.3% that is restricted for transit services, and .15% goes 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.) Following is an example of how the sales taxes paid by the consumer are allocated between the City 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 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, the City and the County. ALLOCATION OF SALES TAX COLLECTION State of Washington Yakima Transit 79.3 3.7 I I G . 1 " \ _ SIl tti (:7:RTI 'I t T . ' + !. l j,..}, - --.- F f Fcc E F�S�i RY Oi V' j h _ # , u r , “V....4 °' ° " "' J r� A22123565 A Y1 _ p ,rz 5.7, I {r : ,„„, 1 . A 22 12 3 5 6 5 A 412 KwtU1TaF MtiU.C. li I +`� "` 1, J ESI1 %E1 HOIIA1{ /!- - N. ..--.s To TH.: f ESJIILN tax UMW/WWI. I. City of Yakima (General Fund) County 10.3 6.7 What You Pay and What You Get • Section IV- 1 SALES TAX RATES WITHIN YAKIMA CITY LIMITS (In descending order by total allocation) PERCENT EXAMPLE RATE OF TOTAL ($100 SALE) State of Washington 6.50% 79.3% $6.50 City of Yakima (General Fund) (1) 0.85% 10.3% $0.85 Yakima Transit 0.30% 3.7% $0.30 Yakima County (Current Expense Fund) (1) 0.15% 1.8% $0.15 Yakima County Criminal Justice (2) 0.40% 4.9% $0.40 TOTAL SALES TAX RATE IN CITY LIMITS 8.20% 100% $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 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. The City's portion is generally under 30% of the total amount collected. (Refer to the graph and chart below for how the 2010 property taxes were allocated between these governmental entities.) 2010 PROPERTY TAX DISTRIBUTION Yakima School District City of Yakima Library .38' .25' .04' I I I _ TM mrIe. b.THAT THERE HAS wcc■ i ErnF/.suai it 4p n / cJ A2212356S , f. I t = A22123565 A ,,,. 1 4 ,I ;.r...� J O E S S fOIIAIt , �` -� Z y Y 1 . '1tI.F To T/it:)i _ER ON nEM.1Nn . _ _ I I State of Washington Schools Yakima County EMS .17' .14' .02' CITY OF YAKIMA PROPERTY Tax— In 2010, a typical City resident pays approximately $11.87 per thousand of assessed value on property taxes. Only $2.99, or about 25.2% 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 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. 2 — Section IV • What You Pay and What You Get 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 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 property within the City. 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 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 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 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.) PROPERTY TAX CODE AREA #334 (YAKIMA SCHOOLS) — CONSOLIDATED LEVY AND RATES 2009 ASSESSED VALUATION — 2010 TAX YEAR AMOUNT PERCENT 2009 2010 OF PROPERTY TAX LEVY RATE LEVY LEVY CITY LEVY General Fund $1.5682 $8,451,301 Parks & Recreation 0.3012 1,623,500 Street & Traffic Operations 0.7810 4,209,000 Firemen's Relief & Pension 02844 1,532,765 Total Operating Levy 2.9349 15,816,566 24.7% Total Bond Levy 0.0558 297,000 0.5% TOTAL CITY LEVY $2.9907 $16,113,566 25.2% OTHER LEVIES School District #7 Operation & Maintenance $2.9009 $15,425,307 37.7% Bond Redemption 1.5805 8,404,184 State Schools 2.0917 11,272,629 176% Library 0.4595 2,476,346 3.9% Yakima County 1.4940 8,051,493 13.8% Yakima County Flood Control 0.0872 469,940 Juvenile Justice Bond 0.0526 279,696 EMS Levy 0.2181 1,175,389 1.8% TOTAL OTHER LEVIES $8.8845 $47,554,984 74.8% TOTAL LEVY CODE #334 $11.8752 $63,668,550 100.0% What You Pay and What You Get • Section IV— 3 CITY TAXES AND UTILITY CHARGES 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 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; 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 $178 a month, or $2,132 a year, as depicted in the following charts. ANNUAL TAXES AND UTILITY CHARGES LEVIED BY THE CITY OF YAKIMA ON THE TYPICAL HOUSEHOLD FOR 2010 RATE COST PER REVENUE PER 1,000 HOUSEHOLD Property Taxes — General $2.9349 / 1,000 $352 Special Levy Property Taxes $.0505 / 1,000 6 Sales Taxes — General 121 Transit Sales Tax 32 Tax on City -Owned Utilities — General 119 Tax on Private Utilities — General 274 Water, Wastewater and Refuse Utility Charges (excluding Utility Tax) 968 Stormwater 43 Irrigation Assessment 217 TOTAL ANNUAL CITY TAXES, UTILITIES AND ASSESSMENT CHARGES $2,132 CITY TAXES AND UTILITY CHARGES COST TO TYPICAL HOUSEHOLD — $2,132 ANNUALLY Refuse Irrigation $338 $217 General Government $74 Water Streets Department $204 $64 Storm Water Parks D- .:rtment $43 '.49 Capital Project Funds $29 Transit Division $32 Other $125 Other Special Revenue Funds $29 Debt Service Funds $15 Special Levy Debt $6 Wastewater Public Safety $426 $607 4 — Section IV • What You Pay and What You Get GENERAL GOVERNMENT REVENUE The total 2011 proposed General Government Revenue Budget is approximately $56.8 million. 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% of the total general fund revenues. GENERAL GOVERNMENT REVENUE (BASED ON 2011 BUDGET OF $56.8 MILLION) 26.0" 21.2 6.7" 3.2" Sales Tax Franchise & Intergovernment & Other Utility Tax State Shared Revenue Revenue ($17.1 Million) ($11.7 Million) ($4.3 Million) (2.4 Million) t z r �Ec '!•' r n.0 cc�.ncs r.+wr 1r17 HAS arcw ac>osrreo iw twe mrws turnat oixtror A221 23565 A S ti- ,.� � y s lY 1 I r ` A22123 565 A y ,,,,*131 I GTO v.('. K� .... '. 2 < `v�?'�»ls7.Y: Tu•ru F: KE.1KEK "N KEM.1 \ I) - .. ... I _ �. ........... - _ ... I _......�_ 25.1" 12.3" 5.5" Property Tax Licenses, Permits Fines & ($13.7 Million) & Charges Other Taxes for Services ($3.1 Million) ($6.6 Million) Note: The term "General Government" refers to basic tax supported functions. The major functions included in this category are: Police, Fire, Streets and Traffic Operations, Parks and Recreation and Code Administration services. These functions use about 83.2% of General Government revenues. Other administrative services include Information Systems (i.e. computer support), Legal, Finance, and Human Resources — services necessary for any organization to function. GENERAL GOVERNMENT EXPENDITURES The following chart depicts the breakdown of the proposed 2011 general government expenditure budget. This breakdown identifies that the City spends over 66% (or approximately $37.8 million) of its available resources on providing public safety services (Police, Municipal Court, Fire, Code Enforcement and Dispatch services). Additionally, the City allocates over 8.9% of its resources to maintaining and operating the Streets and Traffic Systems and another 7.0% to provide Parks and 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. What You Pay and What You Get • Section IV 5 Providing the services in these four critical areas is labor intensive; approximately 71.6% of these 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 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.: Finance and Legal, Community Planning and Project Engineering; Administration and the Library). Breaking down the City's general government budget by these major service areas and identifying 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. 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. GENERAL GOVERNMENT EXPENDITURES (BASED ON 2011 BUDGET OF $56.7 MILLION) 46.8 8.9 7.0 2.6c Police Sr Streets Sr Parks Sr Community Planning Courts Traffic Recreation Project Engineering $26.5 Million $5.0 Million $4.0 Million $1.5 Million .1'4 j am, Ii c e*nr,ts THAT iNER E MAS seEn Dt oafli iw � THE TAE 0,5u R` or f l - i lk` ' J '1 �, ', �I _ h A2212•1565 A ` ti w�y 1 r A22123565 A `\ /'! WAAIIING vo;..1.1.C. i'L• -,� 111.01. •_• .,e»a. �f, i ONE .5 19.9 7.7 7.1 Fire / Code Financial Sr Governance/ Enforcement Legal Services Administration $11.3 Million $4.4 Million $4.0 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 2011. 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 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 balances, and other miscellaneous sources. 6— Section IV • What You Pay and What You Get Municipal public safety services consume the greatest share of local taxes, $608 per household per year, or 70.2% of the total general taxes paid. Other General Government services cost $74 per household annually, or 8.6 %. Streets and Parks together cost 5113 per household annually, or 13.0% of general taxes paid. The utilities combine to cost approximately $968 annually per household. (Many of the costs included in the budgets of the utilities fund State and Federal mandates that local citizens must pay.) ALLOCATION OF TAXES AND UTILITY CHARGES (BASED ON 201 I PROPOSED BUDGET - BUDGET NUMBERS IN THOUSANDS) 20I I NON -Tax ALLOCATION HOUSEHOLD 2011 PERM. PROPOSED FUNDING LOCAL OF TAXES TYPICAL BUDGETED TAX SUPPORTED FUNCTIONS BUDGET SOURCES TAXES COLLECTED COSTS (I) POSITIONS LOCAL DIRECT GENERAL PURPOSE Public Safety (Police Fire & Pensions) $40,175 $6,596 $33,579 70.2% $608 309.50 General Government 14,644 10,546 4,098 8.6% 74 132.75 Streets Department 5,041 1,528 3,513 7.3% 64 37.00 Parks Department 4,007 1,282 2,725 5.7% 49 21.30 Other Special Revenue Funds 3,446 1,861 1,585 3.3% 29 14.75 Debt Service Funds 3,058 2,230 828 1.7% 15 0.00 Capital Project Funds 8,376 6,850 1,526 3.2% 28 0.00 LOCAL DIRECT SPECIAL PURPOSE Special Levy Debt 578 285 293 6 0.00 Transit Division 7,691 3,396 4,295 32 5200 NON -LOCAL Street Construction 13,289 13,289 0 - 0.00 Refuse - 18,767 Residential accounts 4,861 4,861 0 338 19.0() Wastewater - 22,591 Residential accounts 38,626 38,626 0 426 62.31 Water - 17,349 Residential accounts 11,195 11,195 0 204 31.00 Equipment Rental 4,870 4,870 0 - 12.00 Public Works Administration 1,169 1,169 0 - 9.00 Self- Insurance Reserve 11,438 11,438 0 - 0.00 Employee Benefit Reserve 10,767 10,767 0 - 0.00 Irrigation - 10,541 Residential accounts 3,455 3,455 0 217 8.00 FBIA 241 241 0 - 0.00 Storm Water 2,870 2,870 0 43 7.19 TOTALS $189,797 $137,355 $52,442 100.0% $2,133 715.80 (1) Based on 2011 cost for a typical four person household: Property tax 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; irrigation for 7,000 square foot lot; gas / electricity $3,000, telephone $960, and cable TV $600. What You Pay and What You Get • Section IV- 7 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 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 2010 fell on April 9th, one day earlier than it did in 2009, and more than two weeks earlier than in 2007. On average in 2010, Americans will work 61 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 recession has reduced tax collections even faster than it has reduced income; 2) President Obama and the Congress have enacted large but temporary income tax cuts for 2009 and 2010, just as President Bush did in 2008; and 3) Two significant taxes were repealed for 2010 as part of previous legislation, the estate tax and the so-called PEP and Pease provisions of the income tax. The report indicates that Washington State is ranked 5th highest in the nation for federal per capita taxes paid in 2010. 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 8.9% of income, Washington's state and local tax burden percentage ranks 35th highest nationally, below the national average of 9.7%. 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 the most part, local taxes cost the least and provide citizens with the services they need and care about the most — they have the most direct bearing on their quality of life. This is also the level 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. 8 — Section IV • What You Pay and What You Get OTHER OPE ,: ,.:.4, TING .,..4"' ENTERPRISE l'il"' 2010 year-end estimates for the City's Other Operating and Enterprise Funds are summarized below: 2010 BUDGET STATUS 2010 2010 EST. 2010 2010 AMENDED ACTUAL ESTIMATED EST. ENDING FUND BUDGET EXPENDITURES VARIANCE RESOURCES BALANCE Economic Development $211,304 $236,317 ($25,013) $420,071 $183,754 Neighborhood Development (Housing) 5,705,566 5,024,318 681,248 5,786,667 762,349 Community Relations 561,448 550,448 11,000 1,368,554 818,106 Community Services 206,834 142,334 64,500 150,599 8,265 Growth Management 49,745 29,440 20,305 49,745 20,305 Cemetery 256,155 251,586 4,569 322,917 71,331 Emergency Services 1,110,329 1,107,579 2,750 1,151,315 43,736 Public Safety Communications 3,095,475 3,078,809 16,666 3,305,202 226,393 Police Grants 1,279,668 1,041,004 238,664 1,234,244 193,240 Downtown Yakima Improvement District 239,989 224,989 15,000 227,81() 2,821 Trolley (Yakima Interurban Lines) 247,218 284,934 -37,716 290,237 5,303 Front Street Business Improvement 5,000 5,000 0 11,948 6,948 Tourist Promotion 1,469,180 1,455,955 13,225 1,634,643 178,688 Capitol Theatre 319,749 284,749 35,000 402,981 118,232 PFD Revenue - Convention Center 689,000 653,000 36,000 790,638 137,638 Tourist Promotion Area 378,205 378,205 0 378,619 414 PFD Revenue - Capitol Theatre 502,000 501,000 1,000 501,331 331 Recovery Program Grants 814,000 614,000 200,000 614,000 0 Stormwater Operating 2,191,887 2,067,576 124,311 2,5(18,378 440,802 Transit 7,471,870 7,353,711 118,159 8,030,071 676,360 Ref use 4,814,792 4,777,563 37,229 5,041,887 264,324 Wastewater 17,583,255 17,345,542 237,713 19,904,873 2,559,331 Water 7,774,807 7,709,553 65,254 9,476,456 1,766,903 Irrigation 2,758,394 1,877,634 880,760 2,092,842 215,208 Equipment Rental 5,201,037 5,176,621 24,416 9,224,886 4,048,265 Environmental 1,172,873 681,005 491,868 942,319 261,314 Public Works Administration 1,175,373 1,110,415 64,958 1,395,579 285,164 TOTAL $67,285,153 $63,963,287 $3,321,866 $77,258,812 $13,295,525 All Operating and Enterprise Funds are anticipated to end 2010 with positive fund balances. This analysis includes appropriations approved by Council through September. The Economic Development fund had a $25,000 appropriation in October for a North First Street improvement study. The Trolley Fund includes a grant funded project to make improvements to the Trolley barn, which has been carried forward from the prior year. A non-lapsing appropriation will be recorded for this project. All other operating funds are anticipating actual expenditures within authorized levels. Other Funds • Section V - 1 2011 projections for Other Operating and Enterprise Funds expenditures and resources are reflected in the following chart. (Resources include the beginning fund balance plus current year revenue, to arrive at a total available to spend.) PROPOSED 2011 BUDGET 2011 2011 2011 PROJECTED PROJECTED PROJECTED FUND RESOURCES EXPENSE BALANCE Economic Development $258,754 $169,372 $89,382 Neighborhood Development (Housing) 2,996,027 7 3457 _, 7 T ,_ 772,570 Community Relations 1,293,056 561,954 731,102 Community Services 13,265 8,250 5,015 Growth Management / Commute Trip Reduction Fund 20,305 20,305 0 Cemetery 308,881 262,463 46,418 Emergency Services 1,164,212 1,091,586 72,626 Public Safety Communications 3,502,253 3,286,113 216,140 Police Grants 1,294,323 1,083,129 211,194 Downtown Yakima Improvement District 239,991 236,451 3,540 Trolley 6,789 1,165 5,624 Front Street Business Improvement Area 10,483 5,000 5,483 Tourist Promotion 1,553,188 1,400,148 153,040 Capitol Theatre 398,409 285,527 11 88 _, _ _ _ PFD Revenue - Convention Center 759,388 594,000 165,388 Tourist Promotion Area 378,619 378,205 414 PFD Revenue - Capitol Theatre 468 7 91 -,- 468,000 291 Recovery Program Grants 200,000 200,000 0 Stormwater Operating 2,542,002 2,225,207 316,795 Transit 7,945,175 7,259,274 685,901 Refuse 5,088,824 4,861,374 227,450 Wastewater 20,182,303 18,776,805 1,405,498 Water 9,411,240 7,901,474 1,509,766 Irrigation 1,771,808 1,541,669 230,139 Equipment Rental 9,090,896 4,870,443 4,220,453 Environmental 396,314 142,950 253,364 Public Works Administration 1,470,495 1,169,153 301,342 TOTAL OTHER OPERATING AND ENTERPRISE FUNDS $72,765,291 $61,023,474 $11,741,817 See Exhibit I for additional detail of Other Operating and Enterprise Funds. The following chart depicts a summary of resources and expenditures for major operating and Utility fund operations for 2011, 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. 2 - Section V • Of Funds 2011 RESTRICTED OPERATING AND RESERVE FUNDS 2011 Forecast Dollars in Millions 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 $23,949,221 Cap Theatre, Cemetery, Trust Rsys 30,235,992 Reserves, Charges Wastewater 18,776,805 20,182,303 Sewer Rates, Operating Reserves Water /Irrigation 9,443,143 Water Rates, 11,183,048 Irrigation Fees, Reserves Transit 7,259,274 Transit sales Tax, 7,945,175 Oper Grants, Fare Box Refuse 4,861,374 • Expenditures 5,088,824 Refuse Rates D Resources Equipment Rental 3,531,703 !IR 3,692,903 Charges Storm Water 2,225,207 2,542,002 I Storm Water Fees Special Purpose, Housing Emer Svs 13,587,228 Public Wks Admin, Cable TV, Misc 16,733,043 Charges Grants Taxes Reserves Total Expenditures $83,633,955 Total Resources $97,603,290 OPERATING FUNDS For more information on policy issues that affect these funds see the Policy Issue Summary in Exhibit II. THE ECONOMIC DEVELOPMENT FUND This fund reflects resources of $258,754 and expenditures of $169,372 for 2011. These funds are planned to be used to spur economic development. Expenditures include an allocation of Community and Economic Development positions, the continuation of Federal legislative funding efforts, and planning for the redevelopment area at the old sawmill site. Additionally, support for Yakima County Development Association (New Vision) was moved from General Fund to this fund beginning in 2010 and continuing into 2011. (See related Policy Issue) 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 $2,996,027 and are subject to the public hearing process. With a focus on stimulus funding in the Federal Budget, the 2011 budget anticipates a similar allocation as the 2010 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 annually adjusted to reflect the final Other Funds • Section V — 3 outcome of prior year programs. The 2011 ending balance is projected to be $772,570. ONDS is proposing a program change to reinstate a Home Remodeling Technician position to be funded by a reduction in contracted services. (See related Policy Issue) THE COMMUNITY RELATIONS FUND The Community Relations fund expects resources of 51,293,056 for 2011. Expenditures are estimated to be $561,954, leaving the balance estimated at $731,102 for year-end, earmarked primarily for capital expenditure on production equipment / cable TV facilities. THE COMMUNITY SERVICES FUND This fund includes the final year of the Healthy Families Yakima program, which is a 5-year demonstration project through the Department of Social and Health Services. Total resources, which include grant revenue and match contributions, are estimated to be $13,265, and expenditures are budgeted to be $8,250 leaving an ending balance of $5,015. As this is the close-out year, the final budget will be adjusted to use all of the available resources. THE GROWTH MANAGEMENT FUND This fund has special projects / grants related to growth management issues that have been accounted for in this fund. The 2011 resource projection includes a grant for growth management/transportation planning that has been carried forward from prior year. As part of the budget reduction proposal the City's Planning division is proposing to complete this work on a reimbursement basis. The projected ending balance is $0. CEMETERY FUND Resources within this fund for 2011 are projected at $308,881, and include a budgeted policy issue for a rate increase of 7%. Expenditures are estimated to be $262,463, and the estimated ending balance is projected at $46,418. 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 $1,164,212 and expenditures of $1,091,586 related to the provision of Emergency Medical Services, and are supported by an allocation of the county-wide special EMS Property Tax Levy, which was renewed by the voters in September 2002. The 2011 ending balance is projected to be $72,626. THE PUBLIC SAFETY COMMUNICATIONS FUND This fund expects resources of $3,502,253 and expenditures of $3,286,113 for 2011, leaving a balance of $216,140 at year-end. This fund accounts for 9-1-1 Calltakers, supported by Yakima County 9-1-1 resources in the amount of $1,751,656. The Preliminary Budget includes a budgeted policy issue to add/reallocate staffing to be funded by a 20 cent per month increase in the 9-1-1 tax. However, the County Commissioners recently turned down the additional funding, so the final budget will likely be modified. Any change will be vetted through the Policy Issue review process. General Fund expenditures include a transfer of $820,000 for dispatch. 4 — Section V • Of Funds 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 2011 are estimated to be $1,294,323 and expenditures are budgeted at S1,083,129, leaving an ending balance of $211,194. DOWNTOWN YAKIMA BUSINESS IMPROVEMENT DISTRICT (DYBID) FUND Resources in this fund are projected to be $239,991, coming primarily from the new Business Improvement District established mid-2008, while expenditures are projected at $236,451. The Committee for Downtown Yakima (CDY) recently took over enforcement of parking limits in the downtown lots, which is also included in this fund. The ending balance for 2011 is projected at $3,540. Much of the 2011 budget is targeted toward maintaining the recent downtown revitalization efforts. THE TROLLEY FUND This fund projects resources of $6,789 and expenditures of $1,165 for 2011. The year-end balance is projected at $5,624. THE FRONT STREET BUSINESS IMPROVEMENT AREA FUND This fund projects resources of $10,483 and expenditures of $5,000 — leaving an ending balance of $5,483 for 2011. THE TOURISM PROMOTION /YAKIMA CONVENTION CENTER FUND This fund's budget anticipates resources of $1,553,188 (this includes a transfer of $115,000 from the Public Facility District) and expenditures of $1,400,148, and thus is expected to end 2011 with a balance of $153,040. THE CAPITOL THEATRE FUND This fund is expected to have resources of $398,409 and expenditures of $285,527, leaving an estimated ending balance of $112,882. THE PUBLIC FACILITIES DISTRICT - CONVENTION CENTER FUND This fund includes resources estimated to be $759,388 for 2011. Expenditures are estimated to be $594,000. Of this amount $460,000 for debt service on the Convention Center bonds issued in 2002 and $115,000 is for supplemental support of Convention Center operations, while $5,000 is for Convention Center Capital Fund. This leaves a fund balance of $165,388 at the end of 2011. THE TOURIST PROMOTION AREA This fund accounts for a self-assessment imposed by the lodging industry to promote tourism. Resources are estimated to be $378,619, with expenditures programmed at $378,205, leaving a balance at the end of 2011 of $414. Other Funds • Section V — 5 THE PUBLIC FACILITIES DISTRICT - CAPITOL THEATRE This fund includes resources estimated to be 5468,291 for 2011. Expenditures are estimated to be $468,000. Of this amount $456,000 is designated for debt service on the Capitol Expansion bond issued in 2010. This leaves a fund balance of $291 at the end of 2011. RECOVERY PROGRAM GRANTS This fund was established in 2010 to account for Federal Recovery Grants that have stringent reporting requirements and cross operational lines. These are 100% grants (i.e. no local match requirements), so that both the revenues and expenditures for 2011 are $200,000, with no ending reserve balance. STORMWATER OPERATING FUND Expenditures in this fund are estimated to be $2,542,002 and resources are projected to be $2,225,207 for 2011. An ending balance of $316,795 is currently projected for 2011. This is the fourth year of the new Stormwater Utility — the budget was developed assuming a rate of $43 per Equivalent Residential Unit (ERU) annually (the approved 2010 Policy Issue which set the 2010 rate at $40 included this rate for 2011). 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 $7,945,175 and resources are projected to be $7,259,274 for 2011. Total Transit sales taxes for both 2010 and 2011 are forecast to be $4,295,000, with the entire amount allocated to operations. This fund also includes an operating grant of $1,765,000. An ending balance of $685,901 is currently projected for 2011. THE REFUSE FUND The expenditure budget in this fund for 2011 is $5,088,824. Total resources are estimated to be $4,861,374, and an ending balance is currently projected at $227,450. There is not a rate adjustment being proposed at this time. (See unbudgeted policy issue for additional 64 gallon yard waste carts, pending a mandated yard waste program). WASTEWATER FUND Resources for this fund in 2011 are expected to total $20,182,303. Expenditures are budgeted at $18,776,805 and the 2011 year-end balance is currently projected to be $1,405,498. Transfers of about $3.3 million to Wastewater Construction Funds, and $3.4 million to provide for Wastewater Bond redemption and repayments of Public Works Trust Fund Loans are currently programmed in this budget. The proposed 2011 Sewer budget includes continued implementation of the Sewer Comprehensive Plan and the Wastewater Facilities Plan. Revenues are estimated using the same rates as 2010, as a new cost of service study is still in process and not yet completed. (See policy issues for new capital projects.) 6 — Section V • Of Funds WATER FUND Resources of $9,411,240 are projected for 2011 in this fund. Expenditures are estimated to be $7,901,474 leaving $1,509,766 at the end of 2011. These costs include $800,000 transfer to the Capital Fund, and about $691,000 to provide for Water Bond Debt Service, repayments of Water Public Works Trust Fund Loans and $50,000 for potential replacement of the Automated Inventory and Maintenance Management system (AIMMS). The 2011 projected resources include the rate adjustment of 5.5% that was approved by Council in 2008. IRRIGATION FUND Resources for 2011 are projected to be $1,771,808 in this fund, and expenditures are estimated to be $1,541,669. The 2011 ending fund balance is projected to be $230,139. In prior years, both the operating and capital charges were deposited into the operating fund, and then were transferred to the capital fund. With the implementation of the new utility billing computer system in mid-2010 the capital rates are being deposited directly into the capital fund. A multi-year rate increase with the 2011 rate being 5.5% is included as a budgeted policy issue. THE EQUIPMENT RENTAL FUND The budget for this fund in 2011 is $4,870,443 of which $3.4 million is the maintenance and operations budget, and $1.5 million is the Equipment Replacement budget. Resources are expected to be $9,090,896 while the ending fund balance for 2011 is expected to be $4,220,453, 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 2011, $396,314 in resources is expected to be available and $142,950 is budgeted primarily as a contingency. A year-end balance of $253,364 is projected. PUBLIC WORKS ADMINISTRATION FUND Expenditures for 2011 are expected to be $1,169,153 for this fund. Resources for 2011 are expected to be $1,470,495 generated from operating funds located in the Public Works complex, resulting in a year-end balance of S301,342. RESERVE FUNDS — EMPLOYEE BENEFIT RESERVES THE UNEMPLOYMENT COMPENSATION RESERVE FUND This self insured fund in estimated to end 2011 with a balance of $237,013. Resources are projected to be $549,490 and expenditures for claims and other related expenses are estimated at $312,477, an 88% increase over the 2010 year end estimate of $166,395. Due to an anticipated increase of unemployment claims from budget reduction measures, rates are adjusted 25% from .00309% to .00386%. Other Funds • Section V— 7 EMPLOYEES HEALTH BENEFIT RESERVE FUND Expenditures in this fund for 2011 are projected to be $10,686,761, while resources are $13,242,577, leaving an ending balance projected to be $2,555,816. The 2011 budget includes a rate adjustment of about 6%. 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 $941,383, the result of resources totaling $2,293,413 and expenditures of $1,352,030. Ongoing efforts in claim management and safety training are in place to slowdown the number of claims / costs, so that rates were reduced by (12%). WELLNESS I EMPLOYEE ASSISTANCE PROGRAM (EAP) FUND Projected total resources for 2011 are $182,869 in this fund, and expenditures are $79,885 with a projected year-end balance of $102,984. THE FIREMEN'S RELIEF AND PENSION FUND This fund is projecting resources of $2,342,720 and expenditures of $1,609,960, leaving an estimated 2011 year-end balance of S732,760. The Fire Pension property tax allocation for 2011 of $1,502,765 is the same as the 2010 allocation in order to keep more resources in the General Government funds, since this fund's reserves are almost 50% of the annual budget. The City is mandated to allocate property tax to fund pension and LEOFF I medical and long-term care requirements. OPERATING RESERVES RISK MANAGEMENT RESERVE For 2011, based on personnel costs, claims experience and other insurance / professional services costs, on-going expenditures are estimated to be $2,630,681. Risk Management Fund departmental contributions totaling $2,465,000 are programmed from City departments, an increase of 3.0% 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 S70,000 combine for projected 2011 revenues of $2,535,000 for normal operations. In addition to on-going operations, the 2011 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. Therefore, total resources and expenditures of the Risk Management Reserve Fund for 2011 are expected to be $10,435,976 and $9,630,681 respectively. The year-end 2011 reserve balance is estimated to be $805,295. These reserve levels are still considered marginal 8 — Section V • Of Funds 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. GENERAL CONTINGENCY RESERVE FUND The Contingency Reserve Fund is estimated to end 2011 with a balance of $6,720. For 2011, $50,000 is programmed to be transferred from the General Fund to this fund. $200,000 is appropriated for contingency purposes during 2011. CAPITOL THEATRE RESERVE The Capitol Theatre Reserve projects revenues for 2011 of S500. 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 2011 ending balance is $310,288, and will be totally depleted after about 4 years if this program continues at this level. GENERAL FUND CASH FLOW RESERVE General Fund cash flow reserves for 2011 are estimated at $3,058,746. 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 2011 General Reserve position is estimated to be as shown in the following chart. 2011 GENERAL RESERVE POSITION 2009 2010 2011 FUND ACTUAL ESTIMATED PROJECTED Contingency Fund 5256,720 $156,720 $6,72t) General Fund Cash Flow 4,612,886 3,1)12,846 3,058,746 Capitol Theatre Reserve 451,642 381,715 310,288 Risk Management Reserve 1,009,600 895,976 805,295 TOTAL $6,330,848 $4,447,257 $4,181,049 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 we move forward. Exhibit I contains additional detail of funds categorized as Contingency/Operating and Employee Benefit Reserves. Other Funds • Section V— 9 10 — Section V • Other Funds CAPITAL IMPROVEMENT FUNDS For 2010, a number of capital improvements were programmed for an amended capital budget of $54.3 million. However, capital improvement expenditures for 2010 were estimated to be $40.5 million, a spending level approximately $13.8 million below budgeted levels. These projects are rebudgeted in 2011 along with additional capital improvements. Examples of the projects being rebudgeted include the Railroad Grade Separation; 16th Avenue & Washington Avenue reconstruction; Automated Meter Reading; Congdon wastewater main; and Irrigation system refurbishment. (See Exhibit I for a summary of the status of the capital funds.) 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. 2011 RESTRICTED CAPITAL AND DEBT SERVICE FUNDS 2011 Forecast Dollars in Millions 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 Streets $15,485,818 17,750,928 Reserves, Grants, .5 Gas Tax, Real Estate Excise Tax Wastewater 19,850,089 26,314,306 Reserves, Charges, Loans Water /Irrigation 5,206,199 9,393,458 Reserves, Charges, Loans Transit 1,338,740 5,397,993 Reserves, Taxes Equipment Rental 431,750 LI ■ Total Expenditures 961,282 Reserves, Charges ['Total Resources Storm Water 644,794 1,294,449 Reserves, Charges Sp Purp Cap, Misc G . Debt 6,415,781 8,036,146 Reserves, Grants, Taxes, Loans Total Expenditures $49,373,170 Total Resources $69,148,562 Capital Improvement Funds • Section VI —1 For 2011, Capital Fund expenditures of $41,537,299 are estimated as follows, inclusive of carryover projects from 2010. STREET! OTHER INFRASTRUCTURE IMPROVEMENT PROJECTS Total projects of $14.7 million (including carryover projects and Debt Service; excluding capital transfers of REET 1 ($100,000) to support Fire and Parks capital improvement). Summitview and 66th Avenue signalization (carryover) — $556,200 Sixteenth Avenue and Washington Avenue reconstruction (carryover) — $1,170,200 (State grant, REET 2) Railroad grade separation — $10,477,729 (State and Federal grants; Public Works Trust Fund loan) Debt Service — $959,672 Other miscellaneous projects — $1,531,857. These projects include: • $105,000 utility services system (funded by wastewater, water, and irrigation operating funds) • $294,794 Consolidated Financial System (funded by various Operating Funds) 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. IRRIGATION IMPROVEMENT FUND Total 2011 projects — $1,594,234 including Debt Service - S319,234. Capitol Hill refurbishment (carryover plus 2011 additional project cost) — $450,000 General irrigation system refurbishment Phase IV — $550,000 Other irrigation system improvements — $275,000 DOMESTIC WATER IMPROVEMENT FUND Total 2011 projects — $3,010,000. New well project (carryover) — $800,000 (funded by Public Works Trust Fund loan) 2011 Water main replacement — $150,000 Automated Meter Reading System (carry over plus additional project cost / shared with Wastewater) — $2,000,000 Other water capital projects — $60,000 2 — Section VI • Capital Improvement Funds FIRE CAPITAL FUND Total 2011 projects - $841,500, including lease payments - $70,000). Machinery and Equipment (engine/pumper replacement - Policy Issue) - $600,000 Other miscellaneous equipment, upgrades to fire stations, and supplies - $171,500 WASTEWATER CAPITAL EXPENDITURES Facility projects and other sewer improvements, including sewer line extension rehabilitation and other costs, total $17,590,000. Congdon sewer main (carry over) - $750,000 Wastewater Collection System Evaluation (carry over) - $300,000 • Neighborhood sewer main (carry over) - $300,000 Automated Meter Reading System (shared with Water) - $1,000,000 Speedway / Race Street Interceptor (carry over and additional project cost) - $1,500,000 2010 Wastewater Comprehensive Plan update (additional project cost) - $150,000 National Pollutant Discharge Elimination System (NPDES) and Total Maximum Daily Load (TMDL) Issues - $1,000,0000 New Secondary Clarifier and Flow Distribution (policy issue) - $4,000,000 Power Distribution Upgrades (policy issue) - $1,500,000 • Biogas Enhancements (policy issue) - $4,500,000 Biosolids Improvements (policy issue) - $2,000,000 Other Wastewater miscellaneous capital needs (including a $300,000 contingency) - $590,000 STORMWATER CAPITAL FUND Total 2011 budget - $644,794: • Contingency for Capital Facilities projects (partial carry over) - $208,000 Fair Avenue / Nob Hill drainage improvement - $130,000 J Street Low Impact Development (LID) - $12,000 (state grant - joint project with Yakima County) Stormwater Capacity - $294,794 (state grant) Capital Improvement Funds • Section VI - 3 TRANSIT CAPITAL The 2011 budget of $431,750 is for miscellaneous capital needs and vehicle replacement. Replace Dial-a-ride vehicles — $228,750 Other capital needs — $203,000 PARKS IMPROVEMENTS PROJECTS $1,330,000 for various project / capital needs in 2011. Upper Kiwanis development (additional project cost)— $1,245,000 (state grant, line of credit, REET 1 and contributions) Other capital needs — $85,000 OTHER CAPITAL PROJECTS /TRANSFERS City Hall rehabilitation / refurbishment / contingency — $55,000 for continued refurbishment projects. (REET 1) Transfer of REET 1 to support Fire and Parks capital improvements — $100,000 Law and Justice Capital fund — $947,099 for the Police Station / Legal Center related equipment and projects including: Vehicle replacement — $215,000 Technology and Equipment to enhance crime reduction — $500,000 (Federal grant) Safety and communication equipment for mobile units — $42,000 Other miscellaneous projects and equipment — $190,099 Convention Center Capital Improvements — $220,000 is programmed for ongoing capital needs of the Center for 2011. CBD Capital Improvement - $132,264 for maintenance contract and other services. LID CONSTRUCTION There are no local improvement district projects budgeted in 2011. 4 — Section VI • Capital Improvement Funds SUMMARY Overall, Capital Fund expenditures in the 2011 Budget Forecast are S41,537,299, which is ($12,791,542) or (23.5%) less than the 2010 amended levels of $54,328,841. 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 2010). In some instances, the "next" phase as included in the 2011 budget is more than 2010, such as automated meter reading and grant funded transit bus purchases. In other instances, the ongoing budgets are less than 2010, such as the Nob Hill overpass repairs, the Capitol Theatre expansion and Final SCADA. Ongoing pressures on revenues available for General Government Capital funds has 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. 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 2011. 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 up almost 60% of the total grants awarded. Coincidentally, grants make up about 60% of revenue in the Capital Improvement funds. Capital Improvement Funds • Section VI — 5 2011 GRANTS (Federal, State & Inter local Subsidies) AMOUNT DEPARTMENT DESCRIPTION OF GRANT Federal / State Capital Grants Police Grants ARRA, BYRNE, JAG Disparate Grant $145,589 Police Grants JAG Grant 63,200 Law Sr Justice Capital JAG Grant 25,099 Law & Justice Capital IPSS COPS Grant 500,000 Arterial Streets Fair Ave/Nob Hill Intersection Rebuild 47,500 Arterial Streets W.O. Douglas Trail 6th Ave & Naches Bridge 220,000 Arterial Streets W.O. Douglas Bridge Restorations 83,300 Arterial Streets 16th/Wash ington Reconstruction 928,400 Arterial Streets WO. Douglas Trail Enhancement I AC 142 117,000 Parks & Recreation Upper Kiwanis Development/Land 50,000 Cum Res for Capital Improvement TIB Railroad Grade Separation 1,521,300 Cum Res for Capital Improvement FMSIB Railroad Grade Separation 1,500,000 Stormwater Capital Low Impact Development Demonstration 10,000 Stormwater Capital Ecology Municipal Stormwater Capacity 294,794 Cum Res for Capital Improvement Railroad Grade Separation 3,964,858 Total Federal/State Capital Grants $9,471,040 Federal / State Operating Grants - General Government Police Police BYRNE Earmark Grant $45,000 Police St Criminal Alien Assistance Program Grant 20,000 Police Traffic Safety Commission 45,000 Police State Patrol Fire Training 3,000 Police OPD Public Defense Grant 150,000 Police ARRA - COPS Grant 575,628 Parks and Recreation Senior Center - Footcare 30,200 Parks and Recreation State Day Care CFDA 93.044 10,000 Parks and Recreation State Transportation CFDA 93.043 500 Parks and Recreation ALTC Reimbursement SCSA State Res 30,900 General Fund Secretary Of State Archive Grant 5,000 Stormwater Operating Ecology Mapping Grant 81,200 Municipal Court Judicial Salary Contribution 45,000 General Fund Property Taxes 6,330 Total Federal/State Operating Grants - General Government $1,047,758 Federal / State Operating Grants - Other Funds Community Development Community Development Block Grant 1,283,426 Community Development HUD HOME Program 677,752 Transit UMTA - Current Yr Per Grant 1,765,000 Transit CMAQ DOT Sunday Service 169,540 Transit JARC Pass Thru WSDOT 43,675 Transit JARC Pass Thru WSDOT 24,000 Emergency Services Dept of Health - Pre-hospital Grant 1,726 R&M Energy ARRA Dept Of Energy Recovery Program 200,000 Total Federal / State Operating Grants - Other Funds 4,165,119 6 - Section VI • Capital Improvement Funds AMOUNT DEPARTMENT DESCRIPTION OF GRANT Federal Entitlements PFD Capitol Theatre Capitol Theatre - Build America Bond Subsidy 108,896 State Shared Revenue Police Criminal Justice - High Crime 210,000 Police Criminal Justice - Violent 84,000 Police Criminal Justice - Special Programs 46,000 Police MVET DUI Payment 16,000 General Fund Liquor Excise Tax 427,700 General Fund Liquor Board Profits 630,500 Economic Development City Assistance 75,000 Parks & Recreation Criminal Justice - Special Programs 21,100 Streets Gas Tax 1,250,000 Arterial Streets Arterial Street Gas Tax 565,000 Firemen Relief & Pension Fire Insurance Premium Tax 69,000 Total State Shared Revenue 3,394,300 Intergovernmental Contract / Services Parks and Recreation Interlocal Grant School District #7 500,000 Police Police - Fairgrounds 7,000 Police Resource Officers 280,000 Police Yakima Housing Auth Law Enforcement Svcs 10,000 Police Union Gap Jail Contract 10,000 Police Violent Crimes Task Force 95,000 Fire Fire - EMS District #10 30,000 Fire Fire Investigator Services 1,000 Fire Fire Training Programs 4,000 Fire Fire Training Services 76,000 Purchasing Purchasing Services 225,000 Parks and Recreation School District #7 - Swim Programs 15,000 Emergency Services EMS Levy 1,118,000 Public Safety Communications Fire District #10 21,000 Public Safety Communications 911 Services Contracts 1,751,656 Public Safety Communications Fire Dispatch Services 218,372 Public Safety Communications Information Technical Services 37,400 Public Safety Communications Police Dispatching Service 125,070 Public Safety Communications ET Maintenance - Contract 7236 Public Facilities District Public Facilities District Revenue 621,000 PFD - Capitol Theatre Public Facilities District Capitol Theatre 467,460 Fire Capital Fire Protection Charge/State Facility 2,000 Law & Justice Capital Yakima Housing Auth Patrol Car Rev 14,073 Transit Selah Transit Bus 200,000 Transit Selah Transit Dial-a-Ride 40,000 Total Intergovernmental Contract / Services 5,876,267 TOTAL 2011 GRANTS AND OTHER SUBSIDIES 24,063,380 Capital Improvement Funds • Section VI - 7 8 — Section VI • Capital Improvement Funds THREE YE ' BUDGET COMP ' SON - 2011 BUDGET BY CITY F CTIONAL GROUPING 2009 2010 2010 2011 2011 2011 2011 2011 ACTUAL AMENDED YEAR -END PRELIMINARY VS 2010 BEGINNING PROJECTED EST. ENDING EXPENDITURES BUDGET ESTIMATE BUDGET AMENDED FUND BALANCE REVENUE FUND BALANCE GENERAL GOVERNMENT City Council $197,458 $207,265 $203,065 $203,061 (2.0 %) City Manager 503,378 518,563 508,443 514,336 (0.8 %) State Examiner 102,601 103,000 103,000 103,000 0.0% Records 380,613 445,728 433,448 411,555 (7.7 %) Financial Services 1,471,508 1,460,278 1,366,044 1,381,498 (5.4 %) Human Resources 454,937 467,478 447,897 447,436 (4.3 %) Legal 1,160,611 1,142 950 1,105,994 1,139,157 (0.3 %) Municipal Court 1,278,903 1,262,770 1,235,668 1,234,194 (2.3 %) Purchasing 331,879 432,432 420,163 452,835 4.7% Hearing Examiner 51,396 45,605 51,000 31,000 (32.0 %) Environmental Planning 799,520 768,484 713,459 678,679 (11.7 %) Code Administration 1,559,823 1,504,058 1,471,526 1,330,361 (11.5 %) Indigent Defense 429,570 480,000 480,000 480,000 0.0% y Police 22,829,884 22,859,639 22,113,475 21,835,261 (4.5"4) Fire 9,063,500 9,148,439 9,173,749 8,629,702 (5.7%) ~115 Police Pension 1,316,580 1,373,040 1,365,994 1,404,590 2.3% Probation Center 25,000 0 0 0 n/a CXJ Engineering 1,026,172 1,002,489 957,711 752,250 (25.0 %) City Hall Maintenance 410,184 404,486 404,288 352,127 (12.9 %) =° Information Systems 2,450,120 2,589,406 2,551,811 2,228,738 (13.9 %) n Utility Services 1,130,716 1,256,127 1,246,931 1,305,084 3.9% Intergovernmental 395,086 382,865 372,865 257,439 (32.8 %) Nonrecurring Expenses 150,000 0 0 0 n/a Sun Dome 0 0 155,000 127,187 n/a • District Court 2,277 0 0 0 n/a Transfers 2,272,933 2,402,275 2,417,275 2,442,275 1.7% TOTAL GENERAL FUND $49,794,649 $50,257,377 $49,298,806 $47,741,765 (5.0 %) $3,012,846 $47,787,665 $3,058,746 Parks & Recreation 4,208,433 4,218,655 4,133,782 4,006,862 (5.0 %) 369,088 4,034,485 396,711 1-+ Street & Traffic Operations 5, 490, 023 5,424,662 5,308,117 5,041,006 (7.1%) 1,368,912 5,041,810 1,369,716 H T O TAL GENERAL GOVERNMENT FUNDS $59, 493, 105 $59,900,694 $58,740,705 $56,789,633 (5.2 %) $ 4,750,846 $56,863,960 $4,825,173 N 2009 2010 2010 2011 2011 2011 2011 2011 bi ACTUAL AMENDED YEAR -END PRELIMINARY VS 2010 BEGINNING PROJECTED EST. ENDING EXPENDITURES BUDGET ESTIMATE BUDGET AMENDED FUND BALANCE REVENUE FUND BALANCE �' OTHER OPERATING / ENTERPRISE '`h '-+ Economic Development $109,806 $211,304 $236,317 $169,372 (19.8%) $183,754 $75,000 $89,382 H Community Development 2,541,863 5,705,566 5,024,318 2,223,457 (6L0 %) 762,349 2,233,678 772,570 -o Community Relations 478,730 561,448 550,448 561,954 0.1% 818,106 474,950 731,102 `0 Community Services 342,254 206,834 142,334 8,250 (96.0 %) 8,265 5,000 5,015 a Growth Management /Commute Trip Red Fund 0 49,745 29,440 20,305 (59.2 %) 20,305 0 0 Cemetery 247,877 256,155 251,586 262,463 2.5% 71,331 237,550 46,418 Emergency Services 1,166,738 1,110,329 1,107,579 1,091,586 (L7 %) 43,736 1,120,476 72,626 Public Safety Communications 2, 900 ,801 3,095,475 3,078,809 3,286,113 62% 226,393 3,275,860 216,140 Police Grants 99,575 1,279,668 1,041,004 1,083,129 (15.4%) 193,240 1,101,083 211,194 Downtown Yakima Improvement District 201,849 239,989 224,989 236,451 (1.54) 2,821 237,170 3,540 Trolley (Yakima Interurban Lines) 6,209 247,218 284,934 1,165 (99.5 %) 5,303 1,486 5,624 Front Street Business Improvement Area 3,024 5,000 5,000 5,000 0.(1 °4 6,94 3 3,535 5,483 Tourist Promotion 1,313,109 1,469,180 1,455,955 1,400,148 (4.7%) 178,688 1,374,500 153,040 Capitol Theatre 318,647 319,749 284,749 285,527 (10.7 %) 118,232 280,177 112,882 PFD Revenue - Convention Center 657,871 689,000 653,000 594,000 (13.8%) 137,638 621,750 165,388 Tourist Promotion Area 368,978 378,205 378,205 378,205 0.0% 414 378,205 414 PFD Revenue - Capitol Theatre 479,252 502,00( 501,000 468,000 (6.8%) 331 467,960 291 Recovery Program Grants 7,563 814,000 614,000 200,000 (75.4 %) 0 200,000 0 Stormwater Operating 1,637,880 2,191,887 2,067,576 2,225,207 1.5% 440,802 2,101,200 316,795 Transit 6, 829 ,986 7,471,870 7,353,711 7,259,274 (2.8%) 676,360 7,268,815 685,901 Refuse 4,617,358 4,814,792 4,777,563 4,861,374 1.0% 264,324 4,824,500 227,450 Wastewater Operating 16,867,157 17,583,255 17,345,542 18,776,805 6.8% 2,559,331 17,622,972 1,405,498 Water Operating 7,297,455 7,774,807 7,709,553 7,901,474 L6% 1,766,903 7,644,337 1,509,766 Irrigation Operating 2,643,303 2,758,394 1,877,634 1,541,669 (44.1 %) 215,208 1,556,600 230,139 Equipment Rental 5,094,648 5,201,037 5,176,621 4,870,443 (6A%) 4,048,265 5,042,631 4,220,453 Environmental Fund 459,121 1,172,873 681,005 142,950 (87.8 %) 261,314 135,000 253,364 Public Works Administration 1,145,662 1,175,373 1,110,415 1,169,153 (0.5%) 285,164 1,185,331 301,342 TOTAL OTHER OPERATING/ ENTERPRISE $57,836,716 $67,285,153 $63,963,287 $61,023,474 (9.3 %) $13,295,525 $59,469,766 $11,741,817 CAPITAL IMPROVEMENT Arterial Street $3,811,939 $6,154,428 $4,581,182 $2,416,447 (60.7%) $255,797 $2,358,273 $197,623 CBD Capital Improvement 286,908 1,165,185 1,120,351 132,264 (88.6 %) 336,603 37,000 241,339 Capitol Theatre Construction 3,255,726 4,520,000 4,570,000 0 (100.0%) 25,420 0 25,420 Parks & Recreation Capital 254,130 788,142 720,514 1,330,000 68.8% 156,304 1,400,000 226,304 Fire Capital 428,181 1,476,079 1,444,821 841,500 (43.0 %) 155,747 791,588 105,835 Law & Justice Capital 1,256,831 1,159,603 1,141,230 947,099 (18.3 %) 270,095 845,422 168,418 Public Works Trust Construction 922,109 1,191,851 935,279 744,411 (37.5 %) 874,773 628,000 758,362 REET 2 Capital Construction 714,318 1,536,822 1,231,822 761,872 (50.4%) 392,604 552,000 182,782 LID Construction Control 821,673 16,200 16,200 0 (100.0 %) 5,043 0 5,043 Storm Water Capital 47,369 368,040 315,000 644,794 752% 639,655 654,794 649,655 Transit Capital Reserve 969,899 2,732,039 2,425,599 431,750 (84.2 %) 911,282 50,000 529,532 Convention Center Capital Improvement 65,820 990,134 893,434 220,000 (77.8 %) 330,695 125,500 236,195 Cum. Reserve for Capital Improvement 1,694,952 18,946,251 12,905,266 10,872,978 (42.6 %) 2,344,304 9,635,658 1,106,984 Wastewater Facilities Capital Reserve 333,953 50,000 50,800 50,000 0.0% 577,375 150,500 677,875 Sewer Construction 55,057 3,685,000 1,385,400 4,280,000 16.1% 4,039,449 1,386,000 1,145,449 Domestic Water Improvement 1 ,909,301 2,997,200 1,015,000 3,010,000 0.4% 3,464,285 800,000 1,254,285 Wastewater Facilities 3,512,377 3,951,867 3,483,096 13,260,000 235.5% 1,839,749 14,000,000 2,579,749 y Irrigation System Improvement 1, 834 ,540 2,600,000 2,275,013 1,594,234 (38.7 %) 1,007,599 3,208,500 2,621,865 TOTAL CAPITAL IMPROVEMENT $22,175,083 $54,328,841 $40,510,007 $41,537,299 (23.5 %) $17 ,626,779 $36,623,235 $12,712,715 CONTINGENCY I OPERATING RESERVES CXi Contingency Fund $120,199 $225,000 $125,000 $200,000 (11.1°o) $156,720 $50,000 $6,720 r FRS / Capitol Theatre Reserve 371,927 71,927 71,927 71,927 0.0% 381,715 500 310,288 `0 Risk Management 2 ,845,143 2,759,338 2,806,624 9,630,681 249.0% 895,976 9,540,000 805,295 Q TOTAL CONTINGENCY / OPERATING RESERVES $3, 337, 269 $3,056,265 $3,003,551 $9,902,608 224.0% $1,434,411 $9,590,500 $1,122,303 E MPLOYEE BENEFIT RESERVES Unemployment Compensation $120,005 $236,861 $166,395 $312,477 31.9% $376,490 $173,000 $237,013 . Employees Health Benefit 9,922,099 10,553,586 10,161,204 10,686,761 L3% 2,753,492 10,489,085 2,555,816 Workers' Compensation 1,317,593 1,469,617 1,293,866 1,352,030 (8.0 %) 1,184,405 1,109,008 941,383 Wellness / EAP Fund 110,034 89,849 80,093 79,885 (11.1 %) 122,869 60,000 102,984 ry; Firemen's Relief & Pension 1,567,783 1,624,792 1,551,403 1,609,960 (()9 %) 770,455 1,572,265 732,760 ti TOTAL EMPLOYEE BENEFIT RESERVES $13,037,514 $13,974,705 $13,252,961 $14,041,113 0.5% $5,207,711 $13,403,358 $4,569,956 I W ga 2009 2010 2010 2011 2011 2011 2011 2011 bi ACTUAL AMENDED YEAR-END PRELIMINARY VS 2010 BEGINNING PROJECTED EST. ENDING ;-{ EXPENDITURES BUDGET ESTIMATE BUDGET AMENDED FUND BALANCE REVENUE FUND BALANCE TRUST ... 1 AND AGENCY FUNDS r-1- 1--.1 Cemetery Trust $12,061 $15,000 $10,000 $5,500 (63.3%) $586,512 $13,500 $594,512 • H E' SERVICE ro LID Guaranty $0 $0 $U $0 n/a $79,930 $100 $80,030 ;O< PFD Debt Service 734,349 1,014,286 1,014,286 1,014,136 (0.0%) 165,805 1,024,896 176,565 izz) General Obligation Bonds 2,207,366 2,275,916 2,225,916 2,335,941 2.6% 372,748 2,334,739 371,546 LID Debt Service 121,881 407,000 406,000 285,000 (3(.0%) 14,030 274,000 3,030 --,., ,--'• t Water - Irrigation / Sewer Bonds 2,860,415 2,863,042 2,863,042 2,862,054 (0.0%) 2,369,727 2,864,580 2,372,253 --, n TOTAL DEBT SERVICE $5,924,011 $6,560,244 $6,509,244 $6,497,131 (L0%) $3,002,240 $6,498,315 $3,003,424 :..-4 TOTAL CITY BUDGET $161,815,759 $205,120,902 $185,989,755 $189,796,758 (7.5%) $45,904,024 $182,462,634 $38,569,900 T7, POLICY ISSUE SUMMARY CITY OF �G Ltut 2011 MAJOR POLICY ISSUE SUMMARY OTHER THAN PRIORITIES OF GOVERNMENT OUTSIDE AGENCIES — As RECOMMENDED BY CITY COmmcIL DEPARTMENT/ DIVISION POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE NON - PERSONNEL COMMENTS Seasons Music Festival Parks & Recreation Fund 2010 Budget $4,000 Deleted 4 Unbudgeted $0 Yakima - Morelia Sister City Association 2010 Economic 2010 Budget $1,333 Development Fund (123) Deleted 1 Unbudgeted 2011 General Fund $0 Yakima Fourth of July Committee General Fund / Fire 2010 Budget $2,750 Deleted 2 Unbudgeted $0 Greater Yakima Chamber of Commerce General Fund 2010 Budget $2,950 Deleted 2 Unbudgeted $0 Hispanic Chamber of Commerce (HCC) General Fund 2010 Budget $2,950 Deleted 2,950 Unbudgeted $0 Yakima Sunfair Festival Association General Fund 2010 Budget $500 Deleted 500 Unbudgeted $0 Allied Arts of Yakima Valley — ArtsVan General Fund 2010 Budget $2,667 Deleted 2 Unbudgeted $0 Retired Senior Volunteer Program (RSVP) General Fund 2010 Budget $2,000 Deleted 2 Unbudgeted $0 Citizens for Safe Yakima Valley Communities (CSC) General Fund 2010 Budget $10,000 Community Programs Deleted 10 Unbudgeted $0 Yakima Symphony Orchestra General Fund 2010 Budget $5,000 Deleted 5 Unbudgeted $0 $0 Budgeted Total The above agencies have all been defunded by City Council for the 2011 budget year. The two Outside Agencies funded by CED are now located in the Community and Economic Development section, and Intergovernmental Agencies are located within the Finance section. Policy Issue Summary • Exhibit 11 - 1 CITY 1"YAGEMENT IRRIGATION DEPARTMENT/ DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY / BENEFITS NON-PERSONNEL COMMENTS Irrigation Rate Increase Bi-monthly Option "a" budgeted Irrigation rate Revenue a) 2011 - 5.5% charges paid by at 2011 $78,800 2012 - 5.5% customers of the 2(12 83,134 2013 - 5.5% Irrigation Lti I ity 2013 87,700 2014 - 5.5% 2014 92,530 b) 2011 - 7% b) 2011 5105,800 2012 - 7% 2012 112,350 2013 - 7% 2013 120,214 c) 2011 - 10% (-) 2011 $149,000 2012 - 10% 2012 163,900 WASTEWATER DEPARTMENT/ DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY / BENEFITS NON-PERSONNEL COMMENTS Asset Management Software System Wastewater 21)11 5200,1)1)0 Budgeted Operating Fund 2012 S100,000 Will likely be included with the city 1. vide replacement of the current Automated inventory and Maintenance Management System (AIMMS) Mandated Wastewater Treatment Wastewater Facility Expenditure Budgeted Facility Capita I Improvements Capital Fund. 513,500,000 funded by a combination of: Future debt service R'icn a) Revenue bonds from existing rates a) 56,000,000 b) Public Works Trust Fund loan with maturity of b) 5,000,000 c) State Revolving Fund loan current bond / other c) 1,000,000 d) Capital transfers f/Operating funds capital allocations (it 1,500,000 MUNICIPAL COURT DEPARTMENT/ DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY / BENEFITS NON-PERSONNEL COMMENTS No Policy Issues Submitted 2 — Exhibit 11 • _Policy Issue Summary FIN CE INFORMATION SYSTEMS / FINANCE DEPARTMENT/DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY/ BENEFITS NON-PERSONNEL COMMENTS Information Systems Assessment implementation Policy Issue included as a Priorities of Government reduction INTERGOVERNMENTAL DEPARTMENT/ DIVISION POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE NON-PERSONNEL COMMENTS Yakima Regional Clean Air Agency (YRCAA) General Fund 2010 Assessment S33,720 - Assessment Adjustment 220 2011 Total $33,940 Budgeted Yakima Valley Office of Emergency General Fund 2010 Assessment S59,937 Management (OEM) - Assessment Adjustment (294) 2011 Estimate S59,643 Budgeted Yakima Va I ley Conference of Governments Genera I Fund 2011) Assessment S38,623 (YVCOG) - Assessment Adjustment 1,736 2011 Total $40,359 Budgeted CO "la M ITY AND ECONOMIC DEVELOPMENT PLANNING DEPARTMENT/ DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY / BENEFITS NON-PERSONNEL COMMENTS Increase Land Use Application General Fund Reuenue S8,000 Un budgeted Fee to match_ Yakima County rate (approximately 15%) ONDS DEPARTMENT / DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY / BENEFITS NON-PERSONNEL COMMENTS Reinstatement of Home Office of $58,000 $58,000 Budgeted Remodeling Technician positions. Neighborhood Cost offset by reduction in Development Reduction in contracted services (ON DS) CDBG home professional repai programs services Policy Issue Summary • Exhibit II — 3 ENGINEERING DEPARTMENT/ DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY / BENEFITS NON-PERSONNEL COMMENTS Establish/increase Engineering General Fund Revenue S10,000 Unbudgeted review and inspection fees OUTSIDE AGENCY DEPARTMENT/ DIVISION POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE NON-PERSONNEL COMMENTS Yakima County Development Association Economic Development 2010 Budget S30,000 Budgeted YC DA) Fund 2011 Budget S30,000 Committee For Downtown Yakima (CDY) CBD Capital 2010 Budget F50,000 Budgeted improvement Fund (321) 2011 Budget S50,000 POLICE DEPARTMENT/ DIYISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY! BENEFITS NON-PERSONNEL COMMENTS Continue Gang-free Initiative/ General fund. $75,000 Budgeted Coordinator contract Police Administration SU 119. FI FIRE SUPPRESSION DEPARTMENT/ DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY/BENEFITS NON-PERSONNEL COMMENTS Fire Engine / Pumper Fire Capital Fund Expenditure Budgeted Replacement S600,000 Purchase 2 pumpers for $300,000 Debt Service each, funded by a state run lease $70,000 program. Per year/10 years Debt Service R'icn $70,000 per year for 10 years $30,000 From: $40,000 Dedication of EMS replacement contribution $30,000 Revenue transfer from General fund 4 — Exhibit II • _Policy Issue Summary PUBLIC SAFETY COMMUNICATIONS DEPARTMENT/DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY/ BENEFITS NON-PERSONNEL COMMENTS Reorganization/reallocation of 911 Public Safety Budgeted and Dispatch operations Communications. Increase in Net Staffing changes: Countywide 911 Add 1 911 call taker position excise ta x $54,600 Add 1 Public Safety Admin, 62 Assistant position $117900 Equipment replacement $60,000 Total $237,900 Increase Fire Alarm monitoring Public Safety ReCC17110 $4,000 Unbudgeted fees by 20% Communications PUBLIC WO S REFUSE DEPARTMENT/ DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY / BENEFITS NON-PERSONNEL COMMENTS Purchase 1,000 64 Gallon Yard New Refuse yard $45,000 Unbudgeted - Waste carts in response to waste customers pending County ban mandated yard debris disposal/ (not a general rate on yard waste in composting increase) the general landfill (Implementation encouraged) CEMETERY DEPARTMENT/ DIVISION PERSONNEL POLICY ISSUE REQUEST/ JUSTIFICATION PROPOSED FUNDING SOURCE SALARY / BENEFITS NON-PERSONNEL COMMENTS 7% Tahoma Cemetery Fee Cemetery fees ReCC17110 $7,300 increase Policy Issue Summary • Exhibit II — 5 6 — Exhibit II • _Policy Issue Summary E IBIT 111 - SUPPLEMENTAL INFO ' TION TABLE OF CONTENTS CRIMINAL JUSTICE Criminal Justice Costs General Government Budgets Criminal Justice Sales Tax SALARY AND BENEFIT COSTS Costs to Total Budget Operating Funds RESOURCE AND EXPENDITURE BREAKDOWN Graphic Portrayal Total Resources - by Category Total Resources - by Category and Source Total Expenditures Supplemental Information • Exhibit III — 1 CRIMINAL JUSTICE COSTS VS. OTHER GENERAL GOVERNMENT FUNCTIONS 2011 BUDGET Street/Traffic $6,045,680 10.2% Parks & Recreation Criminal Justice $4,377,598 $28,228,420 7.4% 47.6% Other $20,654,378 34.8% 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 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. 2 — Exhibit III • Supplemental Information GENERAL GOVERNMENT BUDGETS 0) 2002 THROUGH 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED PRELIMINARY VS 10 YEAR EAR BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET 2010 INCREASE General Fund Criminal Justice $18,992,948 519,702,698 520,061,761 $20,794,116 $22,857,422 825,014,331 $26,935,856 $28,471,541 $27,554,732 $27,188,822 (1.3%) 55.6% Other 15,571,751 16,913,032 17,476,192 17,862,426 19,557,208 18,856,452 19,782,839 20,240,3111 19,912,799 18,681,668 (6.1%) 25.3% Parks & Recreation 3,504,423 3,620,410 3,832,816 3,905,396 4,074,592 4,199,143 4,4211,906 4,249,796 4,133,782 4,006,862 (3.0%) 15.9% Street/Traffic 4,826,542 5,192,894 4,883,030 5,273,574 5,522,653 5,907,885 6,213,833 5,686,692 5,308,117 5,041,006 (4.7%) 19.5% Total 542,895,664 545,429,034 546,253,799 547,835,512 $52,011,875 553,977,807 857,353,434 558,648,330 $56,909,430 $54,918,358 (3.4%) 37.1% JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Consumer Price Index 181.3 184.1 185.7 190.4 194.8 203.8 210.6 223.6 219.9 221.7 27.1% cJ -;-- , (1) Excludes double budgeted transfers between general government funds. z • Z7. ;4: CRIMINAL JUSTICE SALES TAX - .3% EXPENDITURES AND REVENUES 2010 2011 2007 2008 2009 YEAR -END PROPOSED GENERAL FUND ACTUAL ACTUAL AC TUAL ESTIMATE BUDGET Police Salaries & Benefits (includes overtime) $551,699 $601,047 $605,694 $678,993 $698,734 Miscellaneous (uniform / fuel / travel) 146,601 216,920 133,172 107,636 107,636 Liability Insurance 6,325 6,641 6,973 7,322 7,542 Professional Services / R & M Contractors 6,322 14,969 5,363 5,000 5,000 Yakima County Jail Cost 423,000 395,818 411,108 410,000 350,000 Total Police Department 1,133,947 1,235,395 1,162,260 1,208,951 1,168,912 The .3% Criminal Justice funds support six full time Patrol Officers including: a ll wages, overtime, uniforms, supplies, 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) 49, 669 116 ,485 168,520 167,527 176,494 Professional Services 72,054 49,518 39,398 44,000 44,000 Miscellaneous (office supplies / travel / dues) 248 6,740 12,352 12,800 18,000 Other Expenses (Crime Victims Compensation) 0 0 )) 0 0 Total Municipal Court 121,971 172,743 220,270 224,327 238,494 The Criminal Justice funds support two Municipal Court Clerk positions and a half -time Court Commissioner including all wages, overtime, supplies and training. Additionally, this fund supports building security, interpreter services and witness and juror fees associated with processing the court's case load. Legal - Prosecution Salaries & Benefits (includes overtime) 99,667 127,097 157,253 160,624 160,514 Professional Services 0 12,443 5,393 5,000 5,000 Miscellaneous (office supplies / travel/ dues) 2,869 2,635 2,770 3,350 3,350 Total Legal Department 102, 535 142,175 165,415 168,974 168,864 The .3 %, Criminal Justice Sales Tax is being used to supplement criminal justice functions throughout Yakima County. This money fully funds one Legal Assistant 11 position, one Assistant City Attorney 11 position including mandatory continuing lega l education expenses and dues and subscriptions for required Associations. Information Systems Salaries & Benefits (includes overtime) 27,849 37,895 30,494 32,727 32,776 Small Tools & Equipment 40,100 56,182 0 0 0 Miscellaneous 0 10,493 6,705 22,000 10,000 Professional Services / R & M Contractors 0 903 0 0 0 Data Processing Equipment 25,471 15,704 0 0 0 Total Information System 93,420 121,177 37,199 54,727 42,776 The portion of the .3% Criminal Justice Sales Ta x a (located to Information Systems is used to enhance the effectiveness 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 sa laries used to support the mobile computing and technology infrastructure that has been expanded and enhanced through Criminal Justice Tax over the last two years. 4 - Exhibit III • Supplemental Information 2010 2011 2007 2008 200 YEAR-END PROPOSED GENERAL FUND (CONT...) ACTUAL ACTUAL ACTUAL ESTIMATE BUDGET Animal Control /Codes Salaries & Benefits (includes oveI'time) 62,988 57,211 74,789 70,219 65 Misc. (uniforms / supplies / fuel / cellular phone) 3,965 3,671 3,793 3,013 3,057 Total Animal Control /Codes 66,953 60,882 78,582 73,232 08,160 The 3% Ci'iininal Justice Funds support one full-tiine Aniinal Conti'ol Officer including all wages, overtirne, supplies and communication necessary for this position. Human Resources Professional Services (employee recruitment) 11,340 7,100 6,750 7,500 7,500 .3% Criminal justice funds are used to provide for contract services, testing and ather necessary recruitment costs for positions funded bv the crirninal justice sales tax. GENERAL FUND TOTAL EXPENDITURES $1,530\166 $1,739,472 $1,670,476 $1,737,711 $1,694 OTHER FUNDS Public Safety Corninunication Salaries & Benefits (includes overtime) $56,869 $129,522 $132,450 $127,539 $126/711 General Operations Support 0 (/ 0 0 Misc. (uniforins / supplies/fuel / cellular phone) 0 0 0 0 Small Tools & Equipment 0 3,580 6761 0 0 Total Public Safety Communication 56,869 133 139,211 127,529 126 Criminal Justice funds a Iiocated tc this department are used For additio positio necessaiy to accomii the increased vork1oad generated by Faw en forcernent activities, These funds provide for twa fuFF-time Dispatchers and temporary support for Police electronic maintenance iuc1,u1ing,all wages, overtime and supplies. Law & Justice Capita 1 Small Tools &Equipment $5,459 $6 $12,870 $14 $0 Operating Equipmen 0 7,931 7,853 11 000 12 Vehicles 01,316 0 0 Capital Outlay 168 0 0 Total Law 8z Justice I55,147 14,542 20,727 25 12,000 The .3% Ci'iininal Justice funds support Capital expenses related to the new positions, technology and sei'vices created with this tax, TOTAL EXPENDITURES $1,842,178 $1,887,116 $1,830,410 $1,890,424 $1,833,617 Revenue $1,797,194 $1 $1,795,873 $1 $1,717,000 REVENUE OVER (UNDER) EXPENDITURES ($44,985) $14,809 ($34,537) ($13E\424) ($116,617) CUMULATIVE BALANCE $340,60I $355,411 $3I0,874 $216,987 $100,370 Supplemental Info ti • Exhibit 111 5 SAL ' Y D BENEFIT COSTS 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 71.6% 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 35.4% to 93.9%. In several departments (including Police, 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. 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 II 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. 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. 6 — Exhibit III • Supplemental Information OPERATING FUNDS SALARIES AND BENEFITS AS A PERCENTAGE OF TOTAL DEPARTMENT/FUND BUDGET 2011 2011 SALARIES & LABOR GENERAL GOVERNMENT BUDGET BENEFITS PERCENTAGE Police $21,835,261 $16,503,833 80.1% Fire 8,629,702 7,500,651 92.4% Information Systems 2,228,738 1,615,723 73.8% Code Administration 1,330,361 1,062,759 80.3% Financial Services 1,381,498 1,241,681 90.4% Legal 1,139,157 996,317 87.8% Engineering 752,250 698,442 93.0% Municipal Court 1,234,194 964,184 80.4% Utility Services 1,305,084 957,638 73.5% Environmental Planning 678,679 632,746 93.3% City Manager 514,336 482,195 93.9% Human Resources 447,436 405,411 911% Records 411,555 260,646 64.0% Purchasing 452,835 417,889 92.3% City Hall Maintenance 352,127 121,988 35.4% City Council 203,061 102,810 50.6% Other General Fund Expenditures 4,845,491 0 0.0% TOTAL GENERAL FUND $47,74L765 $33,964,913 71.6% Parks & Recreation 4,006,862 1,906,684 48.0% Street & Traffic Operations 5,041,006 2,571,654 531% TOTAL GENERAL GOVERNMENT $56,789,633 $38,443,251 68.2% Economic Development 169,372 27,359 162% Community Development 2,223,457 740,887 33.4% Community Relations 561,954 390,056 69.6% Cemetery 262,463 161,082 62.7% Emergency Services 1,091,586 804,917 79J% Public Safety Communications 3,286,113 2,631,322 82.8% Police Grants 1,083,129 685,590 80.2% Stormwater 2,225,207 713,505 32.20/0 Transit 7,259,274 3,427,068 49.0% Refuse 4,861,374 1,271,995 26.9% Sewer Operating 18,776,805 4,973,338 27.0% Water Operating 7,901,474 ? ?9? 445 _,_ _, 301% Irrigation Operating 1,541,669 648,885 43.8% Unemployment Compensation Reserve 312,477 28,286 9J% Employment Health Benefit Reserve 10,686,761 123,706 1.2% Workers Compensation Reserve 1,352,030 104,911 7.8% Risk Management Reserve 9,630,681 615,961 6.4% Equipment Rental 4,870,443 855,008 17.7% Public Works Administration 1,169,153 588,531 51.5% Other Funds (Capital / Debt Service etc) 53,741,703 0 0.0% TOTAL CITY-WIDE BUDGET $189,796,758 $59,528,103 32.6% Supplemental Information • Exhibit III - 7 RESOURCE D E ENDITURE BRE DO 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 2011 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 portray only external revenue sources available to the City. The broad revenue categories are based upon the State of Washington's mandated accounting structure. A definition of the terms is included below: BORROWINGS - Proceeds from long-term debt issued by the City. In 2011 this includes primarily a 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 S% 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. 8 — Exhibit III • Supplemental Information CITY OF Yfflati(t/ TOTAL RESOURCES BY CATEGORY 2011 BUDGET TOTAL RESOURCES = $175,492,273 (Excludes Internal Service Funds and other double budgeted resources of $52,874,385) Other Capital Reserves $8,457,900 $19,996,506 5% Taxes 11% $52,910,130 30% Operating Reserves $15,979,543 9% 0.111 bft...44141111=. 411P Borrowings $16,904,500 10% Intergov't Charges for Services $23,595,920 $37,647,774 13% 22% Supplemental Information • Exhibit III — 9 I CITY OF TOTAL RESOURCES BY CATEGORY AND SOURCE 2011 BUDGET ow Police & Fire Mir Gen Government 1- Parks & Recreation Street Operations I Street Construction Gen Govt Const G.O. Debt Service II Special Revenue Transit Utilities ($10.00) $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 10 — Exhibit III • Supplemental Information CITY OF Yfffaitil/ TOTAL EXPENDITURES BY TYPE 2011 BUDGET TOTAL EXPENDITURES = $149,771,225 (Excludes double budgeted expenditures of $40,024,533) Debt Service $8,241,088 6% Salaries ill Capital $48, 790,332 $38,164,920 33% 25% Intergov't $3,125,401 Benefits 2 % $15,076,062 Other Services Supplies o $29,916,254 10 /o $6,457,168 20% 4% Supplemental Information • Exhibit III — 11 12 — Exhibit III • Supplemental Information General Government Budget - Priorities Model (as of 10/5n0) General Government ExpendAwes s $56,662438 PreMauna, 2011 429 28 $59,519,430 Adopted 2010 .5 82 $59,493,104 Actual 2009 475 58 $59,012002 Actual 2008 477 13 $53,596,360 Actual 2009 36152 Health rublIc Safety m rn Management E Development FTE s Quality of Llfe FTF s Cust Svc &Commumcatton State, Pmtuersmps $38,9919180 $8,256,349 $2,959,020 5 $4,009,864 $1,889,2483 $559,289 1 0% 2011 5 00 $40,859,916 48,948,245 $3,194,055 5 $4290254 $1,864,820 3 $580,150 1 0% 2010 5 00 $40,840,949 $8,983,058 $3,194,049 5 $4,339,916 $1,6939149 2 $461,683 1 8% 2009 3 00 $38,199,085 $9226,096 $3,098,419 5 $4,4919196 $1,645,941 2 $391,965 1 7% 2008 3 00 $35,891,985 690% 2009 31093 $8,962,866 163% 2009 9441 $2,843,991 53% 2009 2696 $4245,998 99% 2009 2802 $1,493,930 28% 2009 1820 $358,130 07% 2009 300 I ■ Pon. • .]n• sm..r • 111 .: 1 I CITY MANAGER. • 11/ SOUR. 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Debt Sennee (699) Flr, Ded,ev Sdee1,111ontowee1520 Flr, Ded.11ev 1 MIN WORKS • pumm omuE • 100x. 1 $5..2 . 0 52 29 .x $4059 1155 90M m 5n 11x $4001 ... $1500 $ .. 19x $4001 ... $4..... e $ 31 9% 1 nmANA.E. D..APET. • 11 1 I P.M • E[oN.EV • ..� $1..9..,29 19 2002 12]5 5....2 90.,99, 9.x 2002 225 5,...299 152x $4059 215 m m ..x $4001 .. $. 1 1.M.mre..[OMIT • REAETP SeSPIM • .Oa I $2 0.935 23 9% 2010 18 50 905 000 I [E. • Er Ox.EV • 1111111111 1 [E. • ...OM.[.......... • 1.3a I $ $29,.5 , <x 2.09 2.2 1. 5.5,. u59.55. 1.4x 2.09 2.. 5959 1 MIN WORK. • RESOURCE MANAGEMENT • A2.: 1 $57.835 2,x 2009 0, m cnvm.Is..•nt 1 PUBLIC WORK. •MAIM. SPIM • 66, 1 $1052236 2 7% 2077 8 85 $0 9034 877 0 9% 2011 2 39 MO 000 9300