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Home My WebLink About11/04/2024 09.C. 2025 -2026 Budget Discussion i4 /A 4.'41IgN �e+ i,i i \C.;:Liiiiw..:+>1 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 9.C. For Meeting of: November 4, 2024 ITEM TITLE: 2025 -2026 Budget Discussion SUBMITTED BY: Vicki Baker, City Manager *Viren Mayani, Director of Finance and Budget SUMMARY EXPLANATION: Staff has reviewed the budget with Council at study sessions in October. This is a follow-up to the 2025 - 2026 priority-based budget wrap-up session. ITEM BUDGETED: N/A STRATEGIC PRIORITY 24-25: A Resilient Yakima RECOMMENDATION: For review only ATTACHMENTS: 11.4.24 Revenue Discussion.pdf 163 1 Z-rikl. h 4 J - f f o- . - 2025-2026 .......,,, ,,,,„_„_______„...-----..,-.=-,_ , ; a*:‘ r Priority Based 4._ ii. 't.' -- lyto‘a t Biennial Budget a 9 1_ .. ghS�S 7 6 - _ �I Council Discussion \ ", 5 3- \ 2 November 4, 2024 it o -4 - -- 164 Yakima Cit Council's Selected Y Strategic Priorities A Safe&Healthy Yakima SI •Feor h/„a„Weiolp°ogei:Ln tea nueets oeyemp in aama�+ara m,megtan mm oap •Focus an M1ra provemion[h haes,gn • A Safe & Healthy Yakima standar. A Resilient Yakima n •De,n.build.and ma.,ram rahm, A Resilient Yakima C7 mlr..,r°,°r. • •Stfwal•ng city proceeaos �� .Bold capacity rodelnm on bodge tan <luvJJ •naroi<°l.wmevne pfdam. City of ay amend tow*on xo mm< . . . •Balm leverage local and re... • A Thriving Yakima Yakima C OSIIINO, Strategic • An Engaged Yakima Priorities A Thriving Yakima un x .p.auc.Mrrdeune.a .hecomo an.Uaboon mvnt and ewaK..aeuwnan mall . I •Preemie yakime'aWqu aatura •Meninx current amity in the •bnprow opparturatpn for youth and Man •Became a connecteacanmunnv IL84, An Engaged Yakima =A .P.p..PromoteaiM:a mmonPy image - , s l trea-olaY .am .r,mK,tmn j\� ``i 165 Page 2 General Fund Forecast General Fund - 001, 003, 612 with Transfers -Including Revenue Loss Replacement 2025 2026 Projected Projected Beginning Balance $ 18,328,640 $ 11,476,129 Total Revenues 74,778,730 76,779,080 Total Expenditures 81,631,241 85,425,580 Est End Fund Balance $ 11,476,129 2,829,629 2025 Policy Rsv Amt-14.1%(Actual) 11,476,129 2026 Policy Rsv Amt-3.3(Actual) 2,829,629 Net Fund Balance $ — $ — 2025 Current ending balance of$11,476,129 is at 14.1%,burn rate is less than 2 months 2026 Current ending balance of$2,829,629 is at 3.3%,burn rate is less than a month 166 Unfunded but Certain Expenditures Impacting Reserve Expenditures Needed added to the budget MLK Pool $ 1,000,000.00 Chamber Building Demolition $ 200,000.00 NeoGov $ 104,284.00 Microsoft 365 $ 350,000.00 MLK Pool FF&E * Move police pension $ (712,800.00) Will also reduce Revenue by 800,000 Flock Cameras $ 70,000.00 Jail Costs $ 250,000.00 Total $ 1,261,484.00 167 Page 4 General Fund Forecast General Fund- 001, 003, 612 with Transfers -Including Revenue Loss Replacemeni 2024 2025 2026 YE Est Projected Projected Beginning Balance $ 13,197,529 $ 18,328,640 $ 11,476,129 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 8,985,965 9,119,285 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 74,778,730 76,779,080 Expenditures Salaries&Wages 44,032,906 47,244,977 49,958,741 Personnel Benefits 16,839,598 18,181,332 18,859,133 Supplies-Cons&Resale 2,133,165 2,247,037 2,261,637 Services&Payments 2,561,889 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 72,111,734 81,631,241 85,425,580 Est End Fund Balance $ 18,328,640 $ 11,476,129 $ 2,829,629 Policy Rsv Ault-16.7% $ 12,042,660 $ 13,632,417 $ 14,266,072 Net Fund Balance $ 6,285,980 $ (2,156,288) $ (11,436,443) 168 Levy Lid Lift - Council / Vote Timeliness: Varies based on 1-year or multi-year and election cycle. Impact to GF: $14 M $ Impact on residents: See below Assessed Tax Assessed Tax Value Rate Amount Value Rate Amount $875,000 3.307 $2,894 $327,000 3.307 $1,081 $875,000 1.829 $1,600 $327,000 1.829 $598 $1,293.25 Yearly difference $483.31 Yearly difference $107.77 Monthly difference $40.28 Monthly difference $3.54 Daily difference $1.32 Daily difference Based on a single-year permanent lift 169 Page 6 Levy Lid Lift Single-Year SINGLE-YEAR PERMANENT LEVY LID LIFT MULTI YEAR PERMANENT LEVY LID LIFT Levy Increases more than 1%annually(up 1%annual Increase going to limit factor specified In ballot measure) forward,never expires I 1%annual increase going forward,never expires for up to 5 additional years NOne-time"bump" x o n exceeds 1%annual limit I X i ' o "a o Initial"hump exceeds ? c — 1%annual limit O I a as A v c 4 O ° 0 rr y rn IIa ' - x a a 6 W _ yi Con never exceed statutory moxrmum levy rate per$1,000 ossessed vote e Can never exceed statutory maximum levy rate per$1,000 assessed value Without lid lift(1%annual increase plus"add•ons") I.With lid lift .Without lid lift(1%annual increase plus"add-ons") E With lid lift $2.25 $2.50 $2.75 $ 3.10 Illustrative purpose only 170 Remove Charter Directed Inflator (CPI) - Council / Vote -imeliness: General Election Nov 2025 — effective in 2026 Impact to GF: $1,110,651 + Impact on residents: ZERO Total GF Streets Parks Savings 2025 824,930 285,721 1,110,651 2026 905,155 315,134 1,220,289 2027 987,658 345,383 1,333,041 2028 1,072,504 376,491 1,448,995 171 Page 8 In Lieu Increase - Council Increase stormwater In lieu tax current 15% to 20% Designated for aquatic operations Timeliness Immediate Impact to GF: Increase of $217,496 Impact on residents: Increase of $3.88 per month in 2025 Increase of $7.96 per month in 2026 Prior 5% 2025 Proposed New Amount Earmark Base New Rate Amount at 15% Pool Stormwater $4,349,920.00 20% $869,984 $652,488 $217,496 172 Page 9 In Lieu Increase - Council Additional increase In lieu tax by 1 % Designated for General Fund TimeIineF Immediate Impact to GF: Increase of $500,000 per 1 % increase Impact on residents: See below 2025 2026 Increase Increase over 2024 over 2024 21% $5.17 $9.30 22% $6.51 $10.68 23% $7.87 $12.10 Rates based on: 24% $9.26 $13.57 Water usage of 7 ccf WW usage of 5 ccf 25% $10.72 $15.07 6-gal garbage can 173 Page 10 Impact Fees- Council Timeliness Immediate Impact to GF: $1 .5M based on 2023 figures Impact on residents: ZERO Impact on permit applicants only $0.65 per square foot (not including porches, decks, and etc.) based on Union Gap current rate 174 Page 11 Technology Fees - Council Immediate Impact to G F: $100,000 Impact on residents: ZERO 2025 Budget 5% Plan check fees $ 408,000 $ 20,400 Building Permits $ 740,000 $ 37,000 Mechanical Permits $ 105,000 $ 5,250 Plumbing Permits $ 80,000 $ 4,000 Selah-Inspection fee 34240 $ 250 $ 13 Plan Checking Fees $ 475,000 $ 23,750 Plan Checking Fees-Selah $ 10,000 $ 500 Fire Inspection Filing Fees $ 30,000 $ 1,500 Fire Inspect Fees-Other Contr $ 146,000 $ 7,300 $ 99,713 Modeled from City of Tukwila 175 Page 12 EMS Levy - Council / Vote 7 imeliness: An EMS levy may be presented to the voters at any special, primary, or general election. Impact to GF: $2.9M Impact on residents: see below Tax Assessed Value Rate Amount Assessed Value Tax Rate Amount $875,000 0.25 $219 $327,000 0.250 $82 $218.75 Yearly amount $81.75 Yearly amount $18.23 Monthly amount $6.81 Monthly amount $0.60 Daily amount $0.22 Daily amount Requires a 60% supermajority with validation 176 Page 13 Fire District - Council / Vote Timeliness Long-term planning to make the Fire District independent and sustainable including administrative functions. A separate meeting will be required. Impact to GF: Approximately $19M Impact on residents: See below *Simplified Option Assessed Value Tax Rate Amount Assessed Value Tax Rate Amount $875,000 1.50 $1,313 $327,000 1.50 $491 177 Page 14 Business & Occupation Tax— Council / Referendum Subject to referendum Impact to G F: $200 per every $100,000 of gross receipts Impact on residents: ZERO Impact on businesses with gross receipts over $20,000 "tax imposed on or measured by the value of products, the gross income of the business, or the gross proceeds of sales, as the case may be, and that is the legal liability of the business" 178 Transportation Benefit District Fee - Council Timelin Immediate Impact to GF: ZERO Impact on residents: Increase from $20 to $40 Impact on other city funds: Additional $1 .7M Improvements can range from roads and transit service to sidewalks and transportation demand management. Construction, maintenance, and operation costs are eligible. 179 Transportation Benefit District Sales Tax - Council Timeliness: Immediate Impact to GF: ZERO Impact on residents: . 1 % Impact on other city funds (used for streets, sidewalks, ect.): $300,000 180 Page 17 Metropolitan Park District - Vote Timeliness: vote necessary Math does not support execution of this option. 181 Page 18 Increase in Sales Tax Maxed out for Public Safety 182 Page 19 Hire Consultant — Review City Service Charges Deferred: policy is in place and in execution 183 Page 20 Engineering Fees — Grant Reimbursement Currently fully utilized 184 Page 21 ARPA Projects Update Activity I Status/Balance Convention Center Support Completed Domestic Violence Advocate Completed Police Cars (57) Completed 3-Fire Engines, 2-Rescue Vehicles, 3-Command Vehicles, 1-Tech Rescue Vehicle Completed Budgeted in GF (IT)to be Technology completed in 2025 Acquisition of the former BOA building Completed MLK Aquatic Ctr. $1.5M capital fund $719K Aquatic Center at MLK Jr. Park(capital and operating) operating fund PENDING: Acquisition of the Chamber Building Budgeted in General Fund PENDING: YWCA Budgeted Overtime Completed LIFT match for Mill Site Budgeted in fund 323 Former Nelson Dam Phase 1 Unfunded Future City Hall Unfunded Mill Site Phase 2 Unfunded Underserved water&Sewer Unfunded Balance in GF salaries for 2024 Completed 185 Distributed at the #9c Meeting ,1-04-020)4 GENERAL FUND FORECAST (Fund 001 Only-With Transfers) 2023 2024 2025 2026 Actual YE Est Budget Budget 1 Beginning Balance $ 9,534,451 $ 10,527,088 $ 16,451,653 $ 9,838,502 2 3 Revenues 4 Sales Tax $ 25,448,018 $ 25,701,265 $ 26,919,000 $ 28,081,000 5 Utility&Franchise Taxes $ 21,535,506 $ 21,551,207 $ 21,729,567 $ 22,204,342 6 Property Tax $ 8,052,130 $ 8,057,406 $ 8,135,965 $ 8,244,285 7 Charges for Services $ 3,310,876 $ 3,374,899 $ 3,318,674 $ 3,392,037 8 Intergovernmental Revenues $ 3,189,146 $ 5,385,396 $ 2,653,878 $ 2,685,770 9 Other Taxes&Assessments $ 1,334,458 $ 1,334,458 $ 1,457,000 $ 1,440,000 10 Licenses&Permits $ 2,000,113 $ 1,723,150 $ 1,810,750 $ 1,835,750 11 Fines&Forf,Transfers, Misc $ 7,721,644 $ 5,906,269 $ 4,327,808 $ 4,339,808 12 Total Revenues $ 72,591,891 $ 73,034,050 $ 70,352,642 $ 72,222,992 13 Expenditures 14 Salaries&Wages $ 41,290,008 $ 42,388,457 $ 45,548,880 $ 48,168,770 15 Personnel Benefits $ 15,228,865 $ 15,812,591 $ 17,153,139 $ 17,804,701 16 Supplies-Cons&Resale $ 1,893,929 $ 1,586,565 $ 1,690,549 $ 1,694,964 17 Services&Payments $ 10,475,217 $ 777,696 $ 9,977,062 $ 10,295,193 18 Capital Outlays $ 284,098 $ 934,067 $ 146,000 $ 146,000 19 Debt Service $ 259,301 $ 166,852 $ 153,978 $ 154,663 20 Transfers $ 2,167,836 $ 5,443,257 $ 2,296,185 $ 2,324,473 21 Total Expenditures $ 71,599,254 $ 67,109,485 $ 76,965,793 $ 80,588,764 22 Est End Fund Balance $ 10,527,088 $ 16,451,653 $ 9,838,502 $ 1,472,730 0/0 End FB to Expenditures 14.703% 24.51% 12.78% 1.83% Distributed at the#qe Meeting //-o`f do p Unfunded but Certain Expenditures Impacting Reserve Expenditures Needed added to the budget MLK Pool $ 1,000,000.00 Chamber Building Demolition $ 200,000.00 NeoGov $ 104,284.00 Microsoft 365 $ 350,000.00 MLK Pool FF&E Move police pension $ (712,800.00) Will also reduce Revenue by 800,000 Flock Cameras $ 70,000.00 Jail Costs $ 250,000.00 Total $ 1,261,484.00 Ending Fund Balance (001, 003, 612) 2025 YE: 11.5% 2026 YE: 0.5% GENERAL FUND FORECAST (Fund 001 Only-With Transfers) 2023 2024 2025 2026 Actual YE Est Budget Budget Beginning Balance $ 9,534,451 $10,527,088 $16,451,653 $ 9,838,502 Revenues Sales Tax $25,448,018 $25,701,265 $26,919,000 $ 28,081,000 Utility&Franchise Taxes $21,535,506 $21,551,207 $21,729,567 $ 22,204,342 Property Tax $ 8,052,130 $ 8,057,406 $ 8,135,965 $ 8,244,285 Charges for Services $ 3,310,876 $ 3,374,899 $ 3,318,674 $ 3,392,037 Intergovernmental Revenues $ 3,189,146 $ 5,385,396 $ 2,653,878 $ 2,685,770 Other Taxes&Assessments $ 1,334,458 $ 1,334,458 $ 1,457,000 $ 1,440,000 Licenses&Permits $ 2,000,113 $ 1,723,150 $ 1,810,750 $ 1,835,750 Fines&Forf,Transfers,Misc $ 7,721,644 $ 5,906,269 $ 4,327,808 $ 4,339,808 Total Revenues $72,591,891 $73,034,050 $70,352,642 $ 72,222,992 Expenditures Salaries&Wages $41,290,008 $42,388,457 $45,548,880 $ 48,168,770 Personnel Benefits $15,228,865 $15,812,591 $17,153,139 $ 17,804,701 Supplies-Cons&Resale $ 1,893,929 $ 1,586,565 $ 1,690,549 $ 1,694,964 Services&Payments $10,475,217 $ 777,696 $ 9,977,062 $ 10,295,193 Capital Outlays $ 284,098 $ 934,067 $ 146,000 $ 146,000 Debt Service $ 259,301 $ 166,852 $ 153,978 $ 154,663 Transfers $ 2,167,836 $ 5,443,257 $ 2,296,185 $ 2,324,473 Total Expenditures $71,599,254 $67,109,485 $76,965,793 $ 80,588,764 Est End Fund Balance $10,527,088 $16,451,653 $ 9,838,502 $ 1,472,730 %End FB to Expenditures 14.703% 24.51% 12.78% 1.83% Impact Fees- Council Timeliness: Immediate Impact to GF: $1 .5M based on 2023 figures Impact on residents: ZERO Impact on permit applicants only $0.65 per square foot (not including porches, decks, and etc.) based on Union Gap current rate * Impact to GF: $500K if single-family homes and smaller items are excluded.