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Home My WebLink About10/01/2024 09.E. 2025-2026 Preliminary Priority Based Budget presentation i4 e+ /L440110 i,i • r BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 9.E. For Meeting of: October 1, 2024 ITEM TITLE: 2025-2026 Preliminary Priority Based Budget presentation SUBMITTED BY: *Vicki Baker, City Manager *Viren Mayani, Director of Finance and Budget *Kimberly Domine, Financial Services Director *Jen Paxton, Financial Services Officer SUMMARY EXPLANATION: This is a preliminary budget, which is a statutory requirement, but not a final recommendation for appropriations or for City Council approval. It is the beginning of a process which includes Priority Based Budgets for each City department. These budgets will be reviewed in detail with Council. The proposed 2025-2026 Preliminary Biennial Budget (posted to City website October 1, 2024)will be reviewed with Council in multiple regular and study sessions scheduled as follows: • Tuesday, October 8, 2024 - Study session at 5:00 p.m. • Tuesday, October 15, 2024 - Regular meeting at 5:30 p.m. • Tuesday, October 22, 2024 - Study session at 5:00 p.m. • Tuesday, October 29, 2024 - Study session at 5:00 p.m. ITEM BUDGETED: N/A STRATEGIC PRIORITY 24-25: A Resilient Yakima RECOMMENDATION: No action is required. ATTACHMENTS: 2025-2026 Preliminary Budget Presentation.pdf 206 '.' irsaa=muMmffl aa,il.-4'/;..'.4'i.,^w Mann { ' ' — r -. I,t� �-, ' 2025-2026 II1 _jP‘* iiN1111 i 11-7 Deulopment Teamwork_ Proposed Priority ,141. f_:__.—,.11(11r 111i 1'1MH11I- 1 M 1-M VI I—'- • 77 t __ Pan <pBased 1 O �� Process ,A 20% — Biennial Budget t ... - ? ttw ��"" City Council October Study Session e�� 1 , 2024 Data current through 207 9.25.24 Yakima CityCouncil's Selected Strategic Priorities /� A Safe&Healthy Yakima U+ Pedpw the ren6spl of people Briny in Ills slreels r°tltructnre wli came. Rump inh through coned •Rum an fire prevanpon[hrvuyh Usergn era • A Safe & Healthy Yakima % slender. A Resilient Yakima A Resilient Yakima • "I'o.clty build dmesses l • `� • •ani mlmechyoclulooee _ •expe Wens to del�wr on bWynl°tl City of �VJJ� expect/Wens on oong Know.< es •o dyaonoble°naaem.c derei°pment A Thriving Yakima Bold Mkvereye daM rtyw l • Yakima • `°""'°"' Strategic • An Engaged Yakima Priorities g AThrivin Yakima •Itedpce hanolecsness .Become annterxhv.teundand re gall a l • Mrimux•premele yc current n • a svrnt ascots in the she corranuniln •Improve opoalwee for youth and leml•ne •Become a connectedcanmumty ILEA An Engaged Yakima Coser.ommanl pme.etnp O Remote p°edle communl•...M •oeyww a culture.lwo-wev remmw<Itaten 4 208 Page 2 41 ` Predicted 2025 General Fund REVENUES BY SOURCE EXPENDITURES BY CATEGORY $74,526,814 $81,632,654.85 Utility&Franchise Taxes 29.2% Salaries&Wages 57.9% Sales Tax 40.7% Personnel Benefits Property Tax `' f 22.3% 11.7% Transfers Supplies for Fines&Forf,Transfers, Charges for Services 2 8/ Consumption& Misc j 4.5% Resale ° Debt Service& Services&Pass- 2.7% 5.8/o Inter Intergovernmental Capital Outlays Licenses and Other Taxes g ° Through Payments Permits Assessments Revenues 0.4/0 13.9% 2.4% 2.0% 3.7% 209 Predicted 2026 General Fund REVENUES BY SOURCE EXPENDITURES BY CATEGORY $76,465,497 $85,425,580 Salaries&Wages 58.5% Utility&Franchise Taxes 29.0% Sales Tax 41.4% Transfers 2.7% Property Tax Debt Service& 11 5% Capital Outlays-----„1\,„ 0.4% Fines&Forf,Transfers, Charges for Services Misc j 4.4% Services&Pass- 5.7% `Intergovernmental Through Payments _ _ -_ Personnel Benefits Licenses and Other Taxes& Revenues 13.7% 22.1% Permits Assessments Supplies for 2.4% 3.7% 1.9% Consumption& Resale 210 General Fund Expenditures vs Revenues (General Fund -001, 003, 612) $90,000,000 $80,000,000 $70,000,000 • $60,000,000 2018 2019 2020 2021 2022 2023 2024 2025 2026 Actual Actual Actual Actual Actual Actual YE Est Projected Projected Expenditures -0- Revenues General Fund Forecast General Fund -001, 003, 612 with Transfers -Including Revenue Loss Replacement 2024 2025 2026 YE Est Projected Projected Beginning Balance $ 13,197,529 $ 18,329,940 $ 11,224,099 Revenues Sales Tax 29,023,265 30,368,000 31,635,000 Utility&Franchise Taxes 21,551,207 21,729,567 22,204,342 Property Tax 8,807,406 8,734,049 8,805,702 Charges for Services 3,374,899 3,318,674 3,392,037 Intergovernmental Revenues 5,522,191 2,780,966 2,812,858 Other Taxes&Assessments 1,334,458 1,457,000 1,440,000 Licenses and Permits 1,723,150 1,810,750 1,835,750 Fines&Forf,Transfers,Misc 5,906,269 4,327,808 4,339,808 Total Revenues 77,242,845 74,526,814 76,465,497 Expenditures Salaries&Wages 44,130,606 47,244,977 49,958,741 Personnel Benefits 16,839,598 18,182,746 18,859,133 Supplies-Cons&Resale 2,122,965 2,247,037 2,261,637 Services&Payments 2,473,089 11,361,732 11,720,933 Capital Outlays 934,067 146,000 146,000 Debt Service 166,852 153,978 154,663 Transfers 5,443,257 2,296,185 2,324,473 Total Expenditures 72,110,434 81,632,655 85,425,580 Est End Fund Balance $ 18,329,940 $ 11,224,099 $ 2,264,016 Policy Rsv Amt-16.7% $ 12,042,442 $ 13,632,653 $ 14,266,072 Net Fund Balance $ 6,287,498 $ (2,408,554) $ (12,002,056) 212 Forecast Presented to City Council March 26, 2024 GENERAL FUND ENDING FUND BALANCE vs POLICY RESERVE (Fund 001 Only -With Transfers) *In the 2023-2024 biennium $20,000,000 budget it was our stated goal $15,000,000 - - - - • • to raise the reserve to 25%. $10,006,060 $5,000,000 �- S(5,000,000) $(10,000,000) $(15,000,000) - - - 2024 2025 2026 2027 2028 2029 YE Estimate Projected Projected Projected Projected Projected +GF End Balance —a •Poliry Rev Amt-167% Pg.25•City Council Study Session.2023 Year-End Budget Review and 2025—2029 Five-Year Forecast.March 26.2024 213 Page 7 2025 Proposed Biennial Budget Presentation•October 1,2024 General Fund EndingFund Balance vs PolicyReserve (Fund 001 Only-With Transfers) With ARPA Revenue Replacement $30,000,000 $20,000,000 • • • $10,000,000 _ § $— ($10,000,000) ($20,000,000) ($30,000,000) ($40,000,000) ($50,000,000) 2023 2024 2025 2026 2027 2028 2029 Actual YE Est Budget Budget Projected Projected Projected +GF End Balance f Policy Rsv Amt-16.7% 214 General Fund EndingFund Balance vs PolicyReserve (Fund 001 Only-With Transfers) Without ARPA Revenue Replacement ---.../� $30,000,000 $20,000,000 • • • • $10,000,000 $— ($10,000,000) ($20,000,000) ($30,000,000) ($40,000,000) ($50,000,000) 2023 2024 2025 2026 2027 2028 2029 Actual YE Est Budget Budget Projected Projected Projected f Policy Rsv Amt-16.7% f GF End Bal without Rev Replacement 215 Property Tax Levy Rates City of Yakima 4.0000 - I 3.0000 m 1i1iItIii , pi 1.0000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 City of Yakima City of Yakima Bonds 216 PropertyTax State School Levy Part 2 Yakima County Yakima County Tax District Levy $0.7710 $0.9780 9.1% 11.6% (334) 2024 County Flood Control $0.0551 0.7% State School Levy $1.437310 County EMS Total Levy: $8.4337 17.0% $0.2500 3.0% / Yakima City Yakima Valley $1.8553 Regional Library 22.0% $0.2932 3.5% i'lliimiNeN. Yakima School f' I I I I I Bonds $0.9016 10.7% PROPERTY TAX Yakima Schools $1.8922 22.4% 217 Page 11 Property Tax • As Yakima's property tax base grows, the allowed levy rate decreases from the maximum statutory rate of $3.10. • In 2005 The City's share of property tax was $3.44, the 2024 rate was $1.85. • Dedicated street overlay and reconstruction fund: $2,000,000 increases by annual CPI. 2025 - $2,824,930 2026 - $2,905,155 • Dedicated public parks and recreation capital fund: $750,000 increases by annual CPI 2025 - $1,035,721 2026 - $1,065,134 218 Page 12 2025 Proposed Biennial Budget Presentation•October 1,202 PriorityBudgetBased Model 6. • •J, Priority Level Program Name Justification of Priority Level A Safe&Healthy Yakima A Resilient Yakima A Thriving Yakima An Engaged Yakima Domestic Violence City of Yakima has the greatest#of victims in the 3 Advocacy Program county $xxx Communication to Yakima Public meetings are broadcast for all residents to 1 Residents view live. $xxx Any coverable expense over the$1M retention and 1 Liability Insurance under the approved limits are covered by the carrier. $xxx 2 Airport Growth Implementation of third flight $xxx 3 Airport Parking #1 source of airport revenue $xxx Total of all priorities: When categorizing program priority budgeting,especially for city departments,it's essential to break down the categories based on the impact of the program,legal or legislative requirements,and Please add program name, budget,and priority level in the respective priority column. (including but not limited to:salaries&benefits,supplies and equipment,and professional services.) Prioritize your department's programs based on the following: Priority 1:Dire and loss of the program would leave the City liable for an immediate legal or financial consequence. Priority 2:Urgent but not catastrophic,loss of funding would lead to major disruption in essential services.This would not result in immediate legal or financial consequences. Priority 3:Important but can be delayed temporarily.Delays can lead to inefficiencies and increase the risk of breaches,but it would not have an immediate catastrophic impact. Priority 4:Necessary but not urgent. Priority 5:This is a want for the department that would make the day to day business easier. 219 PriorityBudgetBased Model - Value Add Sheet 2 2025-2026 Biennial Budget Budget Year: 2025 Department: 17_,A Manager: ,'. k. Budget: Year: Program Name Non-monetized services provided by the department that appear critical but are not budgeted: Domestic Violence Domestic Violence Victims are handled by trained staff and guided through the rehabilitation process apart from processing the Advocacy Program case. Communication to Yakima Residents Public meetings for neighboring cities and the county are recorded and broadcast for free. Airport 2nd flight is currently being supported by minimum revenue guarantee inclusive of the General Fund and Private Public Airport Growth Partnerships.The full$500K was exhausted in the year 2024. 220 Page 14 — 2025 Proposed Biennial Budget Presentation•October 1,2024 Certain Exposure without Cost Allocations • Liability Insurance Rates (High Risk Pool) • Unsettled Collective Bargaining Agreements - Retro Payments • Inflation (COLA & Other Market Adjustments) • Accrued Liability - Payroll • LEOFF 1 (LEOFF 1 Retiree's Health Care Costs) • Probation (Cost of Outsourcing to Yakima County) • Indigent Defense (Legislated reduction in workload per capita, thereby increasing costs per capita) • YMCA Operating Costs (slated to begin year 2030) • Disqualified use of $1M of booked expense from CDBG funds to be used on MLK Jr. Aquatic Center 221 Page 15 2025 Proposed Biennial Budget Presentation•October 1,2024 Schedule of Budget StudySessions by Departments • October 8, 2024 • October 15, 2024 • October 22, 2024 • October 29, 2024 222 Page 16 2025 Proposed Biennial Budget Presentation•October 1,2024