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Home My WebLink About02/28/2023 04. General Fund and Citywide ForecastB US INE S S O F T HE C I T Y C O UNC I L YAK I M A, WAS HING T O N AG E ND A S TAT E M E NT I tem No. 4. F or Meeting of: February 28, 2023 I T E M T IT L E :General F und and Citywide F orecast S UB M IT T E D B Y:J ennifer Ferrer-Santa I nes* S UM M ARY E X P L ANAT I O N: This is a forecast that includes 2023 and 2024 revenue and budget expenditures along with an additional three-year outlook and projections through year 2027. I T E M B UD G E T E D:NA S T RAT E G I C P RI O RI T Y:P ublic Trust and Accountability AP P RO V E D F O R S UB M IT TAL B Y T HE C IT Y M ANAG E R RE C O M M E ND AT I O N: Discuss options to meet financial policy obligations, alternative revenue options, or future service level reductions. AT TAC HM E NT S : Description Upload Date Type Forecast 2/23/2023 Backup Material 1 Actual YE Estimate Budget Budget Projected Projected Projected Beginning Balance $ 13,295,597 $ 15,273,951 $ 16,323,847 $ 14,747,664 $ 13,141,521 $ 9,488,554 $ 3,620,028 Revenues 1 Sales Tax 27,149,846 27,934,507 29,454,000 31,005,950 32,246,188 33,536,036 34,877,477 Utility & Franchise Taxes 19,070,610 19,788,650 20,334,354 20,554,893 20,965,991 21,385,311 21,813,017 Property Tax 8,967,221 9,335,615 9,229,468 8,990,443 9,170,252 9,353,657 9,540,730 Charges for Services 3,470,078 2,958,688 3,105,310 3,172,501 3,235,951 3,300,670 3,366,683 Intergovernmental Revenues 3,697,113 4,754,527 3,499,577 3,549,875 3,620,873 3,693,290 3,767,156 Other Taxes & Assessments 1,273,990 1,111,999 1,112,400 1,126,389 1,148,917 1,171,895 1,195,333 Licenses & Permits 1,711,245 1,903,206 1,908,700 1,927,700 1,966,254 2,005,579 2,045,691 Fines & Forf, Transfers, Misc 448,730 3,170,137 3,129,636 3,173,048 3,236,509 3,301,239 3,367,264 Total Revenues 65,788,833 70,957,329 71,773,445 73,500,799 75,590,935 77,747,677 79,973,351 Expenditures Salaries & Wages 2 37,804,313 37,763,309 42,530,162 43,922,083 46,557,408 49,350,852 52,311,903 Personnel Benefits 2 13,070,709 14,181,640 14,664,269 15,053,109 15,956,296 16,913,674 17,928,494 Supplies - Cons & Resale 3 1,630,847 2,885,018 2,079,730 2,089,699 2,173,287 2,260,218 2,350,627 Services & Payments 3 8,747,125 12,413,009 11,575,415 11,550,942 12,012,980 12,493,499 12,993,239 Capital Outlays 4 261,107 422,514 100,000 100,000 105,000 110,250 115,763 Debt Service 5 206,540 206,390 206,233 166,852 170,189 173,593 177,065 Transfers 5 2,089,838 2,035,553 2,193,819 2,224,257 2,268,742 2,314,117 2,360,399 Total Expenditures 63,810,479 69,907,433 73,349,628 75,106,942 79,243,902 83,616,203 88,237,490 Est End Fund Balance $ 15,273,951 $ 16,323,847 $ 14,747,664 $ 13,141,521 $ 9,488,554 $ 3,620,028 $ (4,644,111) Policy Rsv Amt - 16.7%$ 10,656,350 $ 11,674,541 $ 12,249,388 $ 12,542,859 $ 13,233,732 $ 13,963,906 $ 14,735,661 Net Fund Balance $ 4,617,601 $ 4,649,306 $ 2,498,276 $ 598,662 $ (3,745,178) $ (10,343,878) $ (19,379,772) GENERAL FUND FORECAST (With Transfers) 2021 2022 2023 2024 2025 2026 2027 The General Fund forecast, with transfers, begins to show a deficit after meeting ending fund balance requirements and reserve policy at the end of 2025. This is attributable to operational costs growing at a higher percent than revenue growth, in part due to that lack of a levy lid lift - property tax growth of 1% plus new construction is not sufficient to maintain existing services. It has become more critical than ever to review alternative revenue sources and monitor expenditures closely in order to maintain a balance budget. City of Yakima / February 22, 2023 1 Revenue projections provide for a conservative growth of 2%, in all revenues except for Sales Tax, which is shown at 4% for all years except for 2023-2024, where it is showing 6%. 2 Salaries and benefits are projected at 6% growth to provide for labor contract agreements and minimum wage increases. 3 Supplies and Services and Payments have a growth factor of 4%. 4 Capital Outlays, projected at 5% growth, provides for a systematic methodology to replace and repair City buildings, vehicles and other equipment in a timely manner. Funds budgeted for the previous year and not spent are brought forward to the next year. 5 Debt Service and Transfers out to other funds are projected at 2% growth. 2 General Fund FUND BALANCE VS. POLICY RESERVE AMOUNT Ending Fund Balance Policy Rsv Amt - 16.7% 2016 Actual 2017 Actual 2018 Actual 2019 Actual 2020 Actual 2021 Actual 2022 YE Est 2023 Budget 2024 Budget 2025 Projected 2026 Projected 2027 Projected ($10,000,000) ($5,000,000) $— $5,000,000 $10,000,000 $15,000,000 $20,000,000 3 Beginning Balance $ 123,399,331 $ 133,145,200 $ 122,938,561 $ 105,223,137 $ 99,269,999 $ 86,889,946 $ 67,599,220 Revenues 1 Sales Tax 37,721,932 38,181,507 40,347,000 42,016,136 43,696,781 45,444,652 47,262,438 Utility & Franchise Taxes 20,185,211 21,353,448 21,944,962 22,185,608 22,629,320 23,081,906 23,543,544 Property Tax 21,723,187 22,228,251 22,863,709 23,285,527 23,751,238 24,226,263 24,710,788 Charges for Services 57,238,414 59,103,732 60,137,914 61,520,238 62,750,643 64,005,656 65,285,769 Intergovernmental Revenues 40,743,387 67,429,688 38,780,698 22,144,126 22,587,009 23,038,749 23,499,524 Other Taxes & Assessments 7,250,080 7,148,999 7,463,400 7,477,389 7,626,937 7,779,476 7,935,066 Licenses & Permits 3,073,151 3,384,391 3,389,585 3,408,585 3,476,757 3,546,292 3,617,218 Fines & Forf, Transfers, Misc 55,117,731 68,719,858 57,177,105 63,231,830 64,496,467 65,786,396 67,102,124 Total Revenues 243,053,093 287,549,874 252,104,373 245,269,439 251,015,152 256,909,390 262,956,471 Expenditures Salaries & Wages 2 61,175,233 64,571,161 71,125,687 73,586,964 78,002,182 82,682,313 87,643,252 Personnel Benefits 2 36,896,845 40,066,509 41,038,408 42,200,089 44,732,094 47,416,020 50,260,981 Supplies - Cons & Resale 3 7,120,799 11,059,264 9,634,115 9,913,410 10,309,946 10,722,344 11,151,238 Services & Payments 3 56,400,951 76,735,619 64,060,900 64,554,691 67,136,879 69,822,354 72,615,248 Custodial Outlays 4 4,911,591 — — — — — — Capital Outlays 5 43,091,731 69,099,309 57,021,733 34,244,400 35,956,620 37,754,451 39,642,174 Debt Service 6 9,737,853 9,127,865 9,128,254 7,597,435 7,749,384 7,904,372 8,062,459 Transfers 7 13,972,221 27,096,786 17,810,700 19,125,588 19,508,100 19,898,262 20,296,227 Total Expenditures 233,307,224 297,756,513 269,819,797 251,222,577 263,395,205 276,200,116 289,671,579 Est End Fund Balance $ 133,145,200 $ 122,938,561 $ 105,223,137 $ 99,269,999 $ 86,889,946 $ 67,599,220 $ 40,884,112 Policy Rsv Amt - 16.7%$ 38,962,306 $ 49,725,338 $ 45,059,906 $ 41,954,170 $ 43,986,999 $ 46,125,419 $ 48,375,154 Net Fund Balance $ 94,182,894 $ 73,213,223 $ 60,163,231 $ 57,315,829 $ 42,902,947 $ 21,473,801 $ (7,491,042) CITYWIDE FORECAST 2021 2022 2023 2024 2025 2026 2027 Actual YE Estimate Budget Budget Projected Projected Projected The Citywide Forecast is basically showing the total loss of any fund balance by the end of 2027. This is mainly attributable to operational costs growing at a higher rate than revenue growth, along with capital funding in the form of future grants that have not yet been applied for or authorized at this time. City of Yakima / February 22, 2023 1 Revenue projections provide for a conservative growth of 2%, in all revenues except for Sales Tax, which is shown at 4% for all years except for 2023-2024, where it is showing 6%. 2 Salaries and benefits are projected at 6% growth to provide for labor contract agreements and minimum wage increases. 3 Supplies and Services & Payments have a growth factor of 4%. 4 Custodial Outlays are not budgeted as they typically involve the collection of receipts and the remittance of the fiduciary resources to individuals, private organizations or other governments. 5 Capital Outlays, projected at 5% growth, provides for a systematic methodology to replace and repair City buildings, vehicles and other equipment in a timely manner. Funds budgeted for the previous year and not spent are brought forward to the next year. 6 Debt Service is projected at 2% growth from 2024 - 2026. 7 Transfers-out to other funds are projected at 2%. 4 Citywide FUND BALANCE VS. POLICY RESERVE AMOUNT Ending Fund Balance Policy Rsv Amt - 16.7% 2016 Actual 2017 Actual 2018 Actual 2019 Actual 2020 Actual 2021 Actual 2022 YE Est 2023 Budget 2024 Budget 2025 Projected 2026 Projected 2027 Projected $— $25,000,000 $50,000,000 $75,000,000 $100,000,000 $125,000,000 $150,000,000 5