HomeMy WebLinkAbout07/25/2017 00 Distributed at the MeetingDistributed at the
Meetings j 7
City of Yakima
Financial Status Update to Council
General Government and Other Funds of Interest as of June 30, 2017
General Government Reserve Balance Annual
Revenues Expenses Net Rev (Exp) Beginning End/Current % of Exp
78,608,647 78,520,112 88,535 7,305,413 7,393,948 9.4%
2017 Amended Budget
2017 YTD Actual @ 6/30
Percent of Budget
37,709,527 38,400,293 (690,766) 7,933,127 7,242,361 9.4%
48.0% 48.9%
As of June 30, both revenues and expenditures are running at just under 50% of budget. This is not unusual
due to low activity in winter months. Also, the City does not do mid -year accruals for outstanding items such as
unreceived grant revenue or unpaid invoices due. Actually, the savings on the expenditure side is noteworthy.
Included in the Budget is a Vacancy Savings of $675,000 for 2017. General Government has already realized
vacancy savings of this much so far in 2017. Other savings have been achieved through prudent spending
decisions.
Despite the savings, the numbers reflect a deficit of $690,766. This is partly due to revenues that trend upward
in the latter half of the year; and certain annual charges for insurance that were made in the first half of the year
which arbitrarily increase expenditures in this time period. Given these factors, the current deficit is not
problemmatic; we should see revenues trend upward relative to expenditures in the second half of the year.
The Risk Management Fund (discussed below) was entirely depleted in 2016 with the ACLU settlement payout.
To shore up the fund to meet State required minimum reserve levels, the entire 2017 insurance charge plus an
extra surcharge were assessed and are reflected in these expenditure numbers. The impact to General
Government for the extra (unbudgeted) surcharge is $228,500 and the early (budgeted) 2nd half payment is
$635,000. Combined, these entries account for $863,500 of expenditures that should be paid from revenues
received and savings realized in the second half of the year and more than make up the deficit reflected in these
numbers.
Risk Management
2017 Amended Budget
2017 YTD Actual @ 6/30
Percent of Budget
•
Revenues
Reserve Balance Annual
Expenses Net Rev (Exp) Beginning End/Current % of Exp
4,078,528 3,913,381
4,603,720 2,771,008
112.9% 70.8%
165,147
1,403,627 1,568,774 40.1%
1,832,712 (951,265) 881,447 15.9%
During 2016, the ACLU settlement of $1.846 million depleted the Risk Management Fund bringing the Reserve
Balance to negative $951,265. The State requires a minimum Reserve Balance that addresses expected claim
activity as of each year end. The Reserve requirement is estimated by the Legal Department based on pending
claims against the City net of insured amounts. To shore up the fund as quickly as possible, the entire budgeted
insurance charge was administered to each contributing fund early in 2017. Then, an additional 18% surcharge
was administered to bring the reserve balance up to the required minimum.
Continued on back side
Health Benefit Reserve Reserve Balance
Revenues
2017 Amended Budget 12,450,000
2017 YTD Actual @ 6/30
Percent of Budget
6,141,414
49.3%
Expenses
12,308,313
6,510,651
52.9%
Annual
Net Rev (Exp) Beginning End/Current % of Exp
141,687 1,403,627 1,545,314 12.6%
(369, 237) 1,900,393 1,531,156 11.8%
2017 has seen an unusual number (8 to 10) of large claims. Historically the City experiences 3 to 5 unusually
large claims in a year. These claims have caused the expenditures in this fund to increase sharply in the first
half of the year. Additionally, the fund reported an inadequate Reserve Balance at the end of 2016 of just $1.8
million which triggered an inquiry from the State. While the State requires a Reserve Balance of 16 weeks'
expenditures (approximately $3.4 million or 30.8% of annual expenditures), they will accept the City's lower
actuarially determined Reserve requirement of $2.3 million.
This fund began to experience difficulty with rising health care costs several years ago. In response, a reference -
based pricing model was implemented in 2015 which ultimately proved to be unsuccessful. While the initial
appearance of savings seemed to be adequate to reduce premiums to the participating funds and to employees,
ultimately there were no savings and the costs were essentially transfered to future years instead. Those prior
year costs will have to be paid from reserves and cause additional assessments to participating funds in 2017.
Budgeted allocations to vacant positions for healthcare have been transferred to the fund for the first half of
2017. A similar transfer will be done for the second half of the year, and if necessary, an unbudgeted surcharge
will be imposed. The Insurance Board has been monitoring the situation and investigating various options to
deal with the increasing costs. In the short term it is anticipated that assessments to participating funds will need
to be increased. In the longer term it is hoped that incentives and new pricing strategies will curb cost increases
as the comparison to externally run insurance plans continues to prove that our self-insured plan continues to be
more cost efficient, despite recent difficulties.
2018 Budget Process Timeline and Deadlines
July 5
Distribution of City Manager's Budget Guidelines — Available in Shared Budget Folder
Finance emails to all Senior Staff, Division Managers and Department Assistants.
July 10
Distribution of Finance Director's Budget Process and Budget Spreadsheet Instructions
Distributed to all Senior Staff, Division Managers and Department Assistants by
Finance. Saved in shared budget folder.
July 10
New Policy Issue Request Template available in Shared Budget Folder
Open and save a document for all potential 2018 Policy Issue Requests in order
to develop a working list. Only brief summary now. Details can be provided later.
July 10
2017 Payroll Budget Reports available in Shared Budget Folder
Positions and Funding, Budget Distribution & Budget Distribution by Position
July 11
2018 Payroll Budget Staffing Worksheets available in Shared Budget Folder
Divisions should print their section and begin working on 2018 staffing changes.
July 12
2018 Senior Staff Discuss 2018 Staffing Worksheets
Discuss at Senior Staff — Staffing due July 19. Divisions print their section and
make changes. If no changes, please print & submit "no changes" to Finance
July 19
July 20
Budget Training Session at Senior Staff meeting and Division Manager meeting
Discussion and training covering the entire budget process including Payroll
Budgeting, Excel Budget sheets and Policy Issue requests.
July 21
Completed 2018 Staffing Worksheets are submitted to Finance
Finance inputs staffing adjustments to Payroll Budget System by 7/21
July 24
Year -End Estimates Completed including salaries and capital outlay for 2017
Divisions have entered year end estimates into budget worksheets. Finance
prepares summary year end estimate report with Fund Balance estimate
July 31
Excel budget sheets are completed for 2018
All budget data has been input to Excel sheets
July 31
Policy Issue Requests are completed
Requests to be included in the 2018 Preliminary Budget and those that can be
postponed are noted as "future". Cost of request as well as any costs related to
postponement must be estimated and provided in the document.
Aug 1-9
Budget Meetings with Finance for complex budgets or as requested
Please request a meeting if you exceeded your adopted 2017 budget or if you
have a complex budget such as Police, Fire, Parks, Streets
Aug 9
& 16
Administrative Budget Review with Senior Staff
Review Policy Issue Requests, budgeted and unbudgeted, and other areas of
concern.
Aug 30
Preliminary Budget Freeze reviewed by Senior Staff
Finance prepares initial Budget based on 2017 Year End estimates and 2018
data that has been submitted including Policy Issue requests.
Budget Guidelines —1
Sep 1-13
Administrative Budget Reviews and Adjustments
Budget review meetings are held as necessary with City Manager and Finance to
make necessary adjustments and decide Policy Issue Requests.
Sep 20
2018 Preliminary Budget is completed and presented to Senior Staff
Preliminary Budget is completed with optimal Fund Balance result
Optional Policy Issue Requests are finalized to show FB impact
Minimum FB impact is zero or better (Le. Expenditures not allowed above reasonable
revenue projection)
Sep 30
Budget Narratives are developed and first draft is due to Finance
Each department/division will prepare their budget narratives including statistical data
for inclusion in the Adopted Budget document. Updates will be allowed for last minute
changes due to public or Council input.
Oct 10
General Government presentations to Council
City Administration
Community Development (Planning, Codes, LIFT, etc.)
Human Resources including Benefit funds
Legal,
Risk Management, Finance, Debt, REET 1&2
Public Works (Engineering, Arterial Streets, Streets, Parks, Cemetery, Admin)
Oct 12
General Government presentations to Council
Police
Fire and Emergency Preparedness
Public Safety Communications (911 and Dispatch)
Oct 17
Proprietary Funds presentations to Council
Public Works (Equipment Rental, Refuse, Transit)
Wastewater/Stormwater
Water/Irrigation
Airport
Oct 19
Extra Council Budget Review session if required
Nov 1
Publish Preliminary 2018 Budget online (with Clerk) as required by RCW
Finance adjusts Preliminary budget as necessary and publishes online.
Nov 7
Public Hearing on Ad Valorem (Property) Tax
Council takes action on 1°/0 increase and total requested property tax for 2018
Nov 21
Public Budget Hearings
The first of two required public hearings on the Budget
Dec 5
Final Council Budget Review Meeting
Finance prepares final summary of changes from the Preliminary posted budget.
Dec 12
Council Passes Ordinance Adopting the 2018 Budget
This can be done Dec 5 or Dec 12
Dec 15
Final Budget Narratives including all Policy Issues and all statistical data are due!
Final narratives, approved/budgeted Policy Issues and statistics are finalized.
Jan 8
Publish 2018 Adopted Budget online
Budget Guidelines — 2
MINOR CHANGES
Distributed at the
Meeting 7 -as --1 1
ADDRESSING THE
CITY COUNCIL
The City Council welcomes input from citizens community members both -during "Audience -Public CommentsP-articipatien"
So that everyone who wants to address the City Council has the opportunity
to do so, you are asked to follow a few simple guidelines.
1. Please fill out this "Request for Appearance" form and hand it to the City Clerk before you address the City Council.
2. Comments are to be no longer than 3 minutes or no more than 2 minutes if there is a large agenda or multiple
speakers. *If you are part of a group, please select a "spokesperson" to represent your group and assemble behind
the "spokesperson.", An identified "spokesperson" will be allowed up to five 5 minutes to represent your group. Other
d, state her or hisname7-and-say • - • - _ _ .
by the "spokesperson.
3. Up to 30 minutes will be provided for "Audience Participation" near the start of each City Council meeting. Audience
4.
regular -agenda -items, Councilmembers will listen to your concerns and may ask staff to research and report back on
the issue but are unlikely to respond during the meeting.
Gounoil-meetings, Participants are strongly encouraged to aid the Council in maintaining the decorum and orderly
progression of the Council agenda. Engaging in personal attacks, use of profanity, disruptive noise, or comments that
are off -topic detract from the ability of the Council to conduct business and are discouraged.
5. The City Council is a policy making body. Therefore, members cannot take action or investigate employee issues.
Employee matters are the sole responsibility of the City Manager. If you have a complaint about City staff, please
contact the City Manager prior to a Council meeting.
*Note: You are also encouraged to submit comments to the City Council by mail, e-mail or in ways other than
addressing the Council in person at a Council meeting.