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Home My WebLink About11/26/2024 03.A. 2025-2026 Budget discussion options i4 /A 4.'41IgN �e+ i,i i \C.;:Liiiiw..:+>1 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 3.A. For Meeting of: November 26, 2024 ITEM TITLE: 2025-2026 Budget discussion options SUBMITTED BY: Vicki Baker, City Manager *Viren Mayani, Director of Finance & Budget SUMMARY EXPLANATION: This will be the final budget discussion prior to the adoption of the 2025-2026 Biennial Priority Based Budget. Staff will provide information and materials at the workshop meeting. ITEM BUDGETED: STRATEGIC PRIORITY 24-25: A Resilient Yakima RECOMMENDATION: ATTACHMENTS: 2 Distributed at Meeting: 2025 - 26 Priority- Based Budget Analysis and Implementation Vicki Baker City Manager Our Story : Yakima City Services ( Population 99, 370 ) Fire Department (no fire district or regional fire authority) Police Department Transit + Dial-A-Ride (.3 sales tax) Municipal Airport (not a port district) City Support Departments — HR, IT, Finance, Facilities Community Development — Planning, Codes, Engineering, ONDS City Owned Utilities (exceptions Nob Hill Water, Yakima Waste, etc) Parks & Recreation (not a district) YPAC/YCTV (dedicated funding franchise fees, etc) Tahoma Cemetery (not privately held) Swimming Pools — Lions, Franklin, YMCA, MLK Sozo sports (Parks paying bond payment) Municipal Court & Community Diversion Program Municipal Jail Executive Total 659 full-time employees. Seasonal and temporary staff are also budgeted, especially in Parks dept. How did we get here ? • Structural Issues: • Property Tax 1% reducing levy rate - $200,000 this year • Not keeping up with cost of inflation • One time money (ARPA) helped through Covid but funds have been obligated and exhausted • Cities across the state grappling with this issue, passing levies, raising rates • Carry forward $8.5M from last year • Started with a negative trajectory as costs rise rapidly • Cuts made in 2023 were mainly to support services and not the main cost drivers, problem pushed to 2025-26 budget Challenges with financial matters • Structural Issues: • 82% of general fund is public safety, they are our primary cost driver but high priority with the community • One time money (ARPA) has been exhausted • Painless budget reductions already implemented • Legacy issues continue to create headwinds • Addressing the $8.5M from previous years • Level off the decline • Actions to control costs have been implemented • Change in approach with Council and Management • Priority Based Budget • Proactive Community Involvement • Mindset change to long term fiscal stability 0 Long Term Road ma p and Vision for Yakima Culture changes — community focus, break down silos Leveraging Technology Enact Sustainable Budgeting Practices Building capacity to deliver on budgeted expectations Investing in our people Streamlining and improving processes and policies Invest in Economic Development and planning for growth Revitalization of neighborhoods Partnership with region to design solutions for homelessness Staff departments to return to 8am-5am at service windows Policy analyst to make things better— contract Robust Comp Plan to create a plan for Yakima's next 10 years Work with partners on regional challenges and find savings for all Charter language and policy update Policy and procedure documentation Capacity to deliver on community expectations *Planning/permitting streamlined and staffed *Infrastructure that meets expectations and fosters growth *Community safety response (:rik6 2025 - 26 Priority- Based Budget Options General Fund Departments for Consideration • Police • Fire • Parks • Municipal Court • Community Development • Finance • Legal • Human Resources • IT • Facilities • Clerks Office • Economic Development • City Manager/City Council Office 4FYD Long Term Road Map Financial • Sustainable Budget Practices • Robust community-based financial plan • Create Council Budget Committee • Robust community outreach on priorities (pop ups and community events) • Community Survey • Polling the community • Consider asking the voters to support their priorities • Example: Public safety is a primary cost driver, does community want spending on this? • Pursue regional solutions • Districts — fire, parks, ports • Impact Fees to support infrastructure • Right size city services based on community expectations • TBD Investments to enhance streets, sidewalks, streetlights • .1% Sales Tax (council decision) • $20 additional increase • Go to voters for .3% :6= Potential Solutions — Short Term 2025 Recommended • Addressing Structural Issues: • Lower policy reserve to 12% like other cities ($3M requirement change) • Adjust stormwater utility tax 5% to support MLK Aquatic Center operations $217,000 • Bond Payoff in Streets $1,650,000 moved to general fund • CDBG Funds to support construction of MLK Aquatic Center $540,000 • Change policy on salary savings funds $2,000,000 • Reductions in Professional Services across all departments $250,000 • Eliminate all non-essential travel except certifications $100,000 • Reduce overtime in Police and Fire and review OT processes $500,000 • Total $5.2M Need $7M to balance 0 Potential Solutions — Short Term Additional Alternatives Addressing Structural Issues: • Lower policy reserve to 12% like other cities ($3M requirement change) • Adjust stormwater utility tax 5% to support MLK Aquatic Center operations $217,000 • Bond Payoff in Streets $1,650,000 moved to general fund • CDBG Funds to support construction of MLK Aquatic Center $540,000 • Change policy on salary savings funds $2,000,000 • Reductions in Professional Services across all departments $250,000 • Eliminate all non-essential travel except certifications $100,000 • Reduce overtime in Police and Fire and review OT processes $500,000 Revisit the gap without adding additional revenue via budget amendments for 2026 • Reductions in Public Safety positions • Parks programs — variable, several programs • Other recommendations for reductions would be developed CI N ext Steps • Create citizen budget committee • Citizen survey and robust outreach • Budget adoption 12/10/24 • Fund Balance policy changes mow.,