Loading...
10/09/2018 02 2019 Budget Preparation #1 1 5l BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 2. For Meeting of: October 9, 2018 ITEM TITLE: 2019 Budget Preparation#1 SUBMITTED BY: Ana Cortez,Assistant City Manager SUMMARY EXPLANATION: Session#1 reviews the preliminary 2019 budget. This session begins with a review of expenses, reserve levels and deficits. The session continues with review of suggested cuts to address the 2019 deficit and ends with discussion on how to address structural deficits by changing the City's business model. Staff will provide updated material no later than October 8, 2018.Also included is the 2019 Preliminary Budget report. ITEM BUDGETED: STRATEGIC PRIORITY: APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type D session 1 10/5/2018 Colder Memo D mrsc 10/5/2018 Omer Memo D prelim budget 10/5/2018 Omer Memo STUDY SESSION # 1 EXPENSES x ** £ Ni, , f �¢yr tt �I fP1 t • kk I f� }STUDY SESSIONS- Prevew . r 01) „ ,....,..„ I Mr a a3 ttr #1- EXPENSES- TODAY #2- REVENUES- TOMORROW 1. GENERAL FUND 1. GENERAL FUND 2. 2019 EXPENSES: 2. RATES: UTILITIES OBLIGATIONS + COUNCIL PRIORITIES 3. FEES: CCP + OTHER + REAL OP 4. TAXES: OPTIONS 3. 2018 VS 2019 5. LEVIES: OPTIONS 4. 2019 EXP ENSES VS 6. BUSINESS MODEL REVENUES CHANGES 5. BALANCING 2 £ iF yA ! 4. r �i �%yn tt I fP What Doesthe2O19 Budgetlell ? g l y a3 r, • A story about what is important in a community • In Yakima our 2019 General Fund tells this story: • Sales, utility and property taxes are important as they provide the three main legs of the revenue stool • 74.8% of General Fund expenditures is for public safety: Police Department, Fire Department, Legal and Courts • Yakima is out of balance- structural deficit • It MAY also tell a new story- we will present a 1M effort • City aesthetic and beauty (another side of safety) iF tt I fP i, xk EXPENSES- General Fund r \ a3 ttr t _ • 2018: $64,879,941 • 2019: $64,012,970 • Good news, we brought you 2019<2018 • HOWEVER, the Revenue for 2019 is $63,226,694 • What is the difference? ($786,276)- yes, minus: Deficit 4 4 µ iF F I f91 i, �xk BIG PICTURE „„,,,t a3 ttr ,tt 1 CURRENT RESERVE BALANCE 2018 2016 2017 Year End 2019 General Fund-001 Only Actual Actual Estimate Projected Change Beginning Fund Balance $ 5,539,189 $ 6,570,959 $ 6,664,551 $ 7,471,176 Revenues 61,374,514 63,018,704 64,161,628 63,226,694 (1.5)% Expenditures 60,342,744 62,925,112 63,355,003 64,012,970 1.0 % Ending Fund Balance $ 6,570,959 $ 6,664,551 $ 7,471,176 $ 6,684,900 (10.5)% Reserve as a % of Expenditures 10.9% 10.6% 13.8% 12.5% 5 µ iF tt I fP i, xk POLICY VS REALITY a3 ,4 ttr ,t t GENERAL FUND RESERVE FORECAST VS POLICY LEVEL REQUIREMENTS 2018 2017 Year End 2019 2020 2021 2022 2023 General Fund-001 Only Actual Estimate Projected Forecast Forecast Forecast Forecast General Fund Reserve Forecast $ 6,570,959 $ 6,664,551 $ 7,471,176 $ 6,684,900 $ 6,581,537 $ 6,410,346 $ 6,301,220 Policy Level Requirements @ 16.7% 10,508,494 10,580,286 10,690,166 10,861,209 11,165,323 11,466,786 11,787,856 Net Increase(Deficit) $ (3,937,535) $ (3,915,735) $ (3,218,990) $ (4,176,309) $ (4,583,786) $ (5,056,440) $ (5,486,636) 6 4 µ iF tt I fP i, xk INCOME/ LOSS g a 3t tr ,t t GENERAL FUND OPERATING INCOME/LOSS ANALYSIS 2018 2017 Year End 2019 2020 2021 2022 2023 General Fund-001 Only Actual Estimate Projected Forecast Forecast Forecast Forecast Operating Revenues $63,018,704 $64,161,628 $63,226,694 $64,933,815 $66,687,028 $68,554,265 $70,473,784 Operating Expenditures 62,925,112 63,355,003 64,012,970 65,037,178 66,858,219 68,663,391 70,585,966 Net Operating(Loss) $ 93,592 $ 806,625 $ (786,276) $ (103,363) $ (171,191) $ (109,126) $ (112,182) 7 '17\ (.1 4.41. • **.e 2019 GENERAL FUND(001)EXPENDITURE BUDGET GENERALIZED CATEGORIES (V4.0,4111.410,1)01; • '1$.:4******11)1f.,(1•() • Personnel Benefits S12,205,716 WHERE IS THE Salaries esr Wages S36,6S31.110 57.3% „;. ...„ .„ ....„ MONEY GOING • •" Supplies,Equip,Misc L482,469 2.3‘.,4 Capital Outlays •• $'65,000 • • 0.1% •• Services&Charges • • $8,591,891 • 13,9% lotergov't Services Transfers $1,9(M8,965 $1,777,040 3.0". Debt Service $998,849 1,h't1 8 % 4-- .4, .:.. .....--i. Expenses --. .-... „.s....,„, „.....,,......,:,..„J„„„„„„,:,,,•• .....„„„„,„.,..,,,,,.,,,,.., by , . i ititillill tit , :•12 Police Operation le 500 . „;„ggttttttytttttttttttttgl99404lgllgtt.s 4205% l „„:„:„2:iiiiititilliiiiiiiiiiiiiiiiligllgiglIglagggri:2•22886 ..3i:ittpppsttttttttttiitttttttttili404040gggglggllggllgg8l9• ,iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiial0404080g8FREREFREER•i:i.•i:i....% ....______.................T....................c..................--------.....------------------••••••••••••••••••• .....................--...............------------------••••••........--....••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••— „;.;„...'..••....••....••...illillig.l...••....••.'..••.'..••....••....••...ill•lill•l•;••....••....••....••.'..••.'..••....••....••...ill•lill•;ll••....••....••....••.'..••.'..••....••....••...ill..illl•;•l•l•l••....••....••....••.'..••.'..••....••....••...ill..illl.cll•l•l•l••....••....••....••.'..••.'..••.'..••....••....••...ill•l•llill•l•l•l•l••....••....••....••.'..••.'..••.'..••....••....••...ill•l•llill•l•l•l•l•l••....••....••.'..••.'..••.'..••....••....••...ill•llill•••••••••l„ff.... ___,,,...........................................4:-------.............--i•i•••••••••••••••••••••••••••••••••••••••••••••---- ....................-75 .......4444444......_____________...................................._____6...................„ .................--------.5 _.„.„.....444.................------;\----•••••••••---------55----• ----------- _..............„4 4 4 444..4.4_.4...........4.4_.4..........____4_3 3_.3;............„._ N.45µ............aa........................................ ....................„...............................................,..................,,,,..................'''....................................................... *****************7................Q.W4W.W********* ,...................,..................................!................................,........................................."........................................................................................' ................'''''''"*"*"*"*"*""'........ ,,,,,,...................,,====',===,....................=,...............................................................................................................................' ..*****************************.W.******************.......................****W'' ..,.....vvvv............v......,,..=............v......==,,,,,=w=,,,..,==.=,,,M=,===m a NM µ.µ.w.w.wp'a,,,,,............WA µ. ......................,.....................,.............................................,...................,...................,.............. NNNWA..........A.A.,............................................ ....................,..................,,,..................................................................................................'................ .4**********************************.'..............4********W.W.W************* ........................................................................................:::::...........................................................................:::::.....................................................................................::::....................................................................................::::..........................................................................................::::..................................................................................:::::::::::::: tttniigttttttiniiptttttttttgtttyttttynttttttyttttttttte04555555666E5555555fgfititiiEEE5555 Fite 04444440.06699966664.65044.6.666itiviiiimie Atitatititi9094555444455504905P94499 61.4. 701 755 1\4i scell alle 0 us tillgalialitilliiiiiiiiiitilliiiiiiiiiiiiiiiiiiiiiiiiim• -42...,egiiiiiiiitissiiiiiiiiii55550555151155541.1 - 55-5-9— ••••••••••••••••••••••••...............----.......-5749lE11146. . ...Yttgdgllpggggilgigilgglglggg 22.8% S477,226 ligligliiiiiiiiiiillgiEllglligl44449.00. ci.it.,council , 0.7%...„, 1.1•815111111iiiirl° ,, 0 9 •••lliigrpgggggggiEEEEEEgiligg 5'205,936 "•°-4..3 °....„ 11211,11lin....94,5' ...,„..9 ; wl'lliliiiiiligillIgniti, °lig— oimi...giggiggilly Code sAicisi6n3insisbt5ration , ......„iffattatitatitaiiittette -0455111111555ANAW 0.5% .5..3 .5, Ilirlfies8 cc °5-032345' .... •siiiiliiiiiir -- _.... Inforrilation Technology ' _5. ... ...........:— ...."- Leeral 1.584,516 • City Martyterne-4 cal.v.lialtracll - -.5T7n74°° S451.971 gent Defense 2.054' S1.250 974 Tratist / ..5 3..Erigiticeririg '9 Planning.....39° S2,040,1960 . 5779;711 .1,050,CCIO 5655,791 , ,1 1.6% .25T\ Ecorltimic3,./ Ft itmarl City Clerk/ Finance cv.' .., Development Resources Records Purchasing S427,846 5774,363 S717,8'57 52,442,199 1.10 3.8% 9 State Auditor's Local Government Financial Ft ryt #, ., t ..„ Reporting System LG F R S for the year 2017 ,3tr 00knxra* TOTAL EXPENDITURES SPENT ON PUBLIC SAFETY, LEGAL& MUNICIPAL COURT !1.3x)a 8 75 __.. 71, % ai: .......................................... `7: rt U {� � w"mw"mw"mw"mwmwmwm r 5 —_. ...nnnn ••• m���s�:, .. � �� � kw�m � .......��,.��,,�. ........www�r�w� �Y....� ���w�• ��.... City of City of City of City of City of City of City of City of City of City of EFi'::::sssss:. Yakima Federal Way Everett Kennewick Spokane Valley Kirkland Kent Auburn Bellingham Renton kwiii;. 1 POLICY A- DO WE WANT TO ADOPT A GOAL OF 65% FOR \ 2020 :10 fw##+ )%! ( iF5yttt NIBRS GROUP A OFFENSES 2012-2017 •v...`a. . • — Eta 5 tt% Fr , r.�t '.s * .�tti F } dC1 t C ............................ ............................. 120.00 t k y kht'k x:::::::::::::::::::::::::::: :::::::::::::::::::::::::::: ............................ National Incident 1°°.°a Based Reporting p g 80.00 -------------- S stem Cityof Yakima Y -- Group A offenses: 60.00 h mi i o c de rape, p a ::.::::::::::::::::::::::::::: robbery, aggravated 4a•°a assault, burglary, 2° w igo motor vehicle theft, larceny/theft °•°0 offenses and arson 2012 Per 1000 2013 Per 1000 2014 Per 1000 2015 Per 1000 2016 Per 1000 2017 Per 1000 NIBRS GROUP A OFFENSES Population: 91,93D Population:92,620 Population:93,080 Population:93,220 Population:93,410 Population:93,900 2012 Reported 2012 Per 1000 2013 Reported 2013 Per 1000 2014 Reported 2014 Per 1000 2015 Reported 2015 Per 1000 2016 Reported 2016 Per 1000 2017 Reported 2017 Per 100{1 11,244 122.32 9,929 107.21 9,291 99.82 10,620 113.93 11,132 119.18 10,361 110.35 HOW ARE WE PAYING FOR STRATEGICy: ; `+ �. .11 PRIORITIES ?- MONEYAND RESULTS ;+itt }tkanx:ra* x-~ CITY STRATEGIC PRIORITY 100 Funds-Restricted 200-Debt 300-Capital 400-Enterprise 500-Transers General Fund YOUTH/CHILD SUPPORTS(Programs) 131,CDBG 331 01,CDBG ARTERIAL/STREETS(Programs and Infrastructure) 141, 142, 161, 163 342,343,344, 421 0.001 COMMUNITY TRUST(Police,Essential 125,150, 151, 154, 153, Services) 152 332,333,303 462,464,471,481 632,612 01,03 422,441,442,472, 473,474,475,476, 123, 124, 144, 162, 170, 322,323,370, 477,478,479,486, CITY ASSETS(Infrastructure) 171, 172, 173, 174, 272,281,287, 392 488,491,493 01,CDBG 512,513,514,515, 516,551, 552,555, ORGANIZATIONAL FUNCTIONING 486 560 0.001 12 Fs - yt BY DEPARTMENT OR DIVISION 174 t G,r 6 *hy 'tJkht'kt? DEPARTMENT YOUTH/CHILD SUPPORTS (Programs) PARKS, STREETS ARTERIAL/STREETS (Programs and Infrastructure) STREETS, COMMUNITY DEVELOPMENT COMMUN ITY TRUST(Police, Essential Services) POLICE, FIRE, CMO, ADMIN, UTILITIES, LEGAL CITY ASSETS (Infrastructure) FINANCE, PW ORGANIZATIONAL FUNCTIONING CMO, FINANCE, ADMIN 13 £ iF r i tic,/ i, xk CHALLENGE FOR TODAY Ps1..4 a3 ttr t _ • DEFICIT: $786,276 • SHORT TERM PROPOSED CUTS: $1.2M • COUNCIL DIRECTION MEANS • ACCEPT CUTS IN ALL CATEGORIES • ACCEPT CUTS IN SOME CATEGORIES • ACCEPT CUTS BEYOND 2019 DEFICIT AND PUT THE REST IN RESERVES • ACCEPT CUTS BEYOND 2019 DEFICIT AND PORTION IN RESERVES AND A PORTION ON THE SIDE FOR LATER CONSIDERATION 14 4yy £ iF11:::'7'''''''I �i f �¢%yn F ii.'0' P0. i, �xkTHE CHALLENGE FOR LONG TERM � � „ ai ttr . ,/ ,t ,,,„,,,ttlt.„..t,.., -, STRUCTU RAL CHANGES KEEP THIS SLIDE 15 o {_� �' v. :---1. "..,to r�M�e' F�k �s '��+t*%'z r Fs - ryt \ NEW BUSINESS MODELS- POLICY # 11.5'£ .. loot 1 • 3 6k *�,,� �'tJkht'kt? J ❑ Further investigate Fire District/Authority ❑ Further investigate Consolidation with Sheriff k ❑ Further investigate Metropolitan Park District ❑ Privatize Information Technology ❑ Privatize Codes ❑ Privatize Yakima Airport RentonProperty Tax 1%+ Benefit Charge(based on property factors such as building size,hazards, RENTON Regional ',�bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb;�bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbblt,. w: „ffi' a a — a ro �gg a: a�,";, i i i�dddddddddddddddddddddddddddddtlyy''d�dtlyyd'dddddddddddddddddtl'tl'tl'tl'tl'tl'tl'tl'tl'tl'tl'tl'tl'tl'tl'tlp ���� ���, � ���� � � �'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'�'� FEDERAL 1!VSouthKing FD 31.6M NA 157 Property Levy 16 $p £ iF ! r i f ¢%yn F I P i, xk FIRE DISTRICTS a3 ttr 0_ • Article XI, Section 11 of the s in t n t t nstit ti n provides general police powers for counties, cities and towns. There actually is not a specific statute that provides that cities must provide fire protection services • However, as a practical matter, a city must provide some measure of fire protection. There are five possible ways for a city to provide fire protection: • Maintaining a fire department run by the city's own personnel • Contracting with another city or fire protection district for fire protection services • Annexing directly to a fire protection district with voter approval • Forming a fire protection district coextensive with the city/town with voter approval (a new provision enacted in 2017 — see ) • Establishing a regional fire protection authority with voter approval • For unincorporated areas, fire protection is provided by special districts and/or through interlocal and mutual aid agreements 17 /--4.- rh16.„1-4./.. ,.,•...'\,, MORE ON FIRE DISTRICTS Fire Protection District Statutes 'Title 52 RCW — Provides for formation of fire protection districts •RCW 52.02.020 — Authorizes formation of fire protection districts for provision of fire protection services, fire suppression services, emergency medical services, and for the protection of life and property in areas outside cities and towns, except where cities and towns have annexed to a fire protection district, or where such existing district is continuing service pursuant to RCW 35.02.202 •RCW 52.02.160 - .180 — Formation of fire protection district by city; must be approved by simple majority of voters. City council may serve as ex officio fire commissioners, or they may relinquish governance to a board of independently elected commissioners (RCW 52.14.140) 18 Metropolitan Park District What Is a Metropolitan Park District? • A metropolitan park district (MPD) , authorized by Ch . 35.61 RCW, may be created for the management, control, improvement, maintenance, and acquisition of parks, parkways, boulevards, and recreational facilities. An MPD may include territory located in portions or in all of one or more cities or counties. • A metropolitan park district may also be formed for a limited purpose that identifies specific public parks and/or recreational facilities (such as specific swimming pools, playfields, or public parks). A limited purpose MPD must establish its levy rate within the initial ballot measure. The rate becomes the maximum levy rate until a future ballot measure is placed before the voters for a levy rate lift. 19 ioaaireaddraoii aoii y %. • ' HOW TO FORM ONE ‘;'ir;r Formation of Metropolitan Park District • There are two ways to initiate the formation of a park district, both of which require approval by a majority of voters within the proposed district: • By petition • By a resolution of the governing body or bodies within which the district is to be located. (RC 35.61.020) • Local Government Resolution Method • A city or county may initiate district formation by adopting a resolution submitting a proposition for its formation to voters within the proposed district boundaries. If the district includes area within the county or other cities and counties, the legislative body of each city and/or county that includes a portion or all of the area in the district must adopt a resolution submitting the proposition to the voters. • Examples • i Ptr istrict Proposition o. 1 (2003) • in. unt Ordinance o. 14505 (2003) - Establishing the date for an election on the formation of an MPD within the city of North Bend and portions of unincorporated King County. • rt - Resolution o. 900 (2003) - Calling for a special election for the purpose of placing on the ballot a proposition regarding the formation of a metropolitan park district. 20 $p 11 %i f , ¢yn % �xk 1 I Citizen Petition Method aittr , • A metropolitan district may be initiated if a petition proposing its creation is submitted to the county auditor of each county in which all or a portion of the proposed district would be located, signed by at least 15% of the registered voters residing in the area to be included. Where the petition is for creation of a district in more than one county, the petition must be filed with the county auditor of the county having the greater area of the proposed district, and a copy filed with each other county auditor of the other counties covering the proposed district. • The petition must meet the requirements of RC 5. 1.005 and include the "warning" language set out in that statute. MRSC recommends that the "warning" language be placed on each signature page of the petition so signers are clearly notified that they must be registered voters of the area proposed to be included within the district. Petition or resolution contents: The petition proposing the creation of a metropolitan park district, or the resolution submitting the question to the voters, must indicate the choice and describe the composition of the initial board of commissioners of the district that is proposed under C 5. 1.05 and must list a name for the district. ( 21 iF ��i CITY OF YAKIMA EMPLOYEE BENEFITS i =J : ¢* µMS Per CBA & Vested Rightsa3 ttr • Health-Shared premium • Deferred Comp- City covers employees prior to 2012 • Pension- State mandated- can't touch • Longevity 90% OF EMPLOYEES ARE COVERED BY • Incentive: UNIONS • Bilingual In 2019, we have • Education four contracts to be renegotiated for • Sign language 2020 • Shift differential 22 „;,,,n ;� µ me ' �,‘ "., POLICY # 1 - Further Consideration of iM�{ .' + �' t+, � 3 3 Structural Cuts ( long term ) t }1k - t.. * ,-,41,---,:._, ❑ Decreases in benefits • Per CBA therefore • Must negotiate with unions x. x .. .. .A.. • There is no re-opener language in CBA's- thus mutual consent required x • SHALL WE??? 4 w • We are negotiating 4 in 2019: Police, Teamsters Sups, Teamsters Corrections, AFSCME/Transit • Take home vehicles ❑ Decreases in Salary • In CBA (needs negotiation) • Salaries set by master pay ordinance (civil service) .., • Salary ranges recommended by CSC but approved by Councildr '....t...} • Yakima is below the average WA compensation as defined by AWC's survey 2 �.;..Tn.;� me {_e�' �� f to / rib*,i+ � F't Fr.....:yt 1,, ,' ski PROPOSED SAVINGS/CUTS :£'w'r ,,, .,,A,,,:' G,p 6 *yt i'RJ:::f? LE V EL OF SERVICE Closure of Lion's Pool I $ (308,000.00) $ (308,000.00) QUALITY OF LIFE 4th of July $ (20,000.00) Battle of the Bands $ (5,000.00) 5 de mayo $ (20,000.00) $ (45,000.00) LOST POSITIONS: -7 ADMINISTRATIVE GAINED POSITIONS: +3 4300 Transportation $ (103,926.12) 4910 Misc. $ (143,076.00) NET IMPACT: -4 FFreserve $ (8,000.00) $ (255,002.12) SALARY SAVINGS Position Cuts $ (546,940.68) Potential Transfers from GF to other Funds $ (117,367.00) $ (664,307.68) TOTAL $ (1,272,309.80) $ (1,272,309.80) 24 $p iF f ¢%yr tt �I � fP� t • '' k Positions Created or Changed N.ht'° 2004. a3 2225522252 CREATED CHANGED • Domestic Violence Victim Advocate (from PSS I) • Rec Leader • Clean City Coordinator under CMO (from Economic Development Manager) • Seasonal Park • Community Development Specialist (from ED Manager) Maintenance • Legal Assistant III from II Worker • Sr. Assistant City Attorney I (from Assistant CA II) — 2 of these • Bilingual • Assistant CA II (from Sr. Assistant CA II) Community • Supervising Traffic Engineer (from Traffic Signal Analyst) • Bilingual Community Relations Assistant for Public Safety Relations Specialist (from PD and FD consolidation) for Public Safety • PSS II (from PSS 1)- three of these • Supervising Engineer from Traffic Signal Analyst 25 $p iF POLICY #3— DIRECTION ON HOW TOf.4 ¢%r }a i 2r a sr ELIMINATE DEFICIT a3 ttr ❑ Do you agree with proposed level of service cuts? ❑ Do you agree with proposed quality of life cuts? ❑ Do you agree with administrative cuts? ❑ Do you agree with salary savings? : v ❑ Do you agree with added positions? ❑ Do you want to allocate a % of cuts to the reserves? £ iF COUNCILPRIORITIES— POLICY #4 i �a3 4� ttr ❑ Leave GENERAL FUND COUNCIL PRIORITIES in budget? • Jurassic Parliament $15,000 • National League of Cities $17,000 • YCDA $50,000 (from $33,000) What about... • Traffic calming- REET • MLK Pool- REET • City Clean Up Strategy-Fee • Alley Paver Project- Enterprise Fund • Port Authority- N/A 27 29 NIP *****1 • ••• Lout Government Sumens List of etropolitan *ark 111 istricts This page lists existing and proposed metropolitan park districts(MPDs) in Washington State,including their governance and the purpose for which they were created. Current Metropolitan Park Districts As of 2017,MRSC is aware of 19 metropolitan park districts within the state.In recent years,voters have only approved about one-third of proposed MPDs(see our Local Ballot Measure Database for results since November 2011). This table lists the existing MPDs in alphabetical order,with links to the MPD website(if available). MPD Election Boundaries Governance Purpose Date Bainbridge Island Sept. Bainbridge Island Elected board Maintain and operate park and Metropolitan Park and 2004 recreation facilities,replacing an earlier Recreation District park and recreation district with less stable funding. bLiekaniItCQrnmijnity Feb. Part of Bellingham Elected board Pay off an interfund loan that Forest and Recreation 2013 Bellingham used to purchase a tract of District forest used as an informal park.Board intends to dissolve district upon repayment. Colfax Metropolitan Park Nov. Colfax City council(ex officio) Operate and'maintain existing District 2016 swimming pool and parks. Des Moines Pool Metropolitan Park Nov. Des Moines Elected board Maintain and operate existing Mt. District 2009 Rainier Pool(with additional funding from Normandy Park MPD and Highline School District). Eastmont Metro Parks And May East Wenatchee and nearby Elected board Maintain existing park services and Recreation 2004 unincorporated areas of facilities,replacing the Eastmont Park Douglas County and Recreation Service Area which lacked adequate funding Fall City Metropolitan Park March Fall City area Elected board Maintain,improve,and acquire park District 2009 (unincorporated King and recreation facilities. County) Greater Clark Parks District Feb. Vancouver unincorporated Elected board Maintain,operate,and construct 2005 growth area(Clark County) neighborhood parks,sports fields,and trails. , Key Peninsula Metropolitan Feb Key Peninsula Elected board Maintain and operate park and Park District 2004 (unincorporated Pierce recreation facilities,replacing the Key County) Peninsula Park and Recreation District. 30 MPD Election Boundaries Governance Purpose Date Metro Parks Tacoma 1907 Tacoma and nearby Elected board First MPD in state.Operates extensive unincorporated Pierce parks,community centers,and County,including Browns zoo/nature facilities. Point&Dash Point Normandy Park Metropolitan Park Nov. Normandy Park City council(ex off icio) Help fund existing Mt.Rainier Pool District 2009 (along with Des Moines Pool MPD and Highline School District). Olvmpia Metropolitan Park Nov. Olympia City council(ex off icio) Improve and expand city park system District 2015 P� ,'nsula Metropolitan Park May Unincorporated Pierce Elected board Maintain and improve park and District 2004 County near Gig Harbor recreation facilities.Replaced earlier p ark and recreation district following series of ballot measures that fell narrowly short of the required 60% approval. Pullman Metropolitan Park Sept. Pullman City council(ex off icio) Maintenance and operation of park District 2002 facilities due to general fund shortfalls 5eattle Park District Aug. Seattle City council(ex off icio) Maintenance and improvement of 2014 existing park facilities to address$267 million backlog � Shelton Metropolitan Park April Shelton City council(ex off cm Fund park and recreation facilities District 2010 owned by the city. 5i View Metropolitan Park Feb, North Bend and nearby Elected board Operate the Si View Park Community District 2003 unincorporated King County Center and Pool,which had been closed due to county budget cuts,as well as other park facilities. Tukwila Pool Metropolitan April Tukwila Elected board Operate the Tukwila Pool,preventing Park District 2011 potential closure following recession and general fund shortfalls. illage Green Met Aug, Kingston area Elected board Pay a portion of the capital costs for rk District 2008 (unincorporated Kitsap the new Village Green community County) center William Shore,Memoriai May Port Angeles School District 2 county commissioners, Operate the William Shore Memorial POOL Park District 2009 No.121(City of Port Angeles 2 city councilmembers, Pool,preventing its closure. and part of unincorporated I resident elected by the Clattam County) board Failed Metro���)Ui �m� ����� Districts � Metropolitan _'— _ '-_ -_- |nrecentyears,votenshavedefeatcdabouttwo-thinbofthe proposed metropolitan park district measures,often 6v � overwhelming margins.TheMRSC which goes back to the 3D11 general election, includes the following examples: ^ Bonney Lake-Would have assumed ownership of some or all of the city's parks and recreational facilities. Received 2096in3013 general election. Ferndale-Would have supplemented existing funding for city parks.Received 41%in 2015 general election. ` Kirkland-Would have paid for a proposed aquatic/community center,as well as park improvements.Received 37Y6in2O1S general.election. 31 ^ Mason County-Wouldhave funded park and trail improvements in the unincorporated county.Received 36%in 2016genera election. • Okanogan County-Submitted by petition to form a new recreation district in Methow Valley. Received 22%in April IO14 special election. ^ Sequim-Would have funded the existing Sequirn Aquatic and Recreation Center(SARC). Received 42%in 2015 primary election and SARC was forced toclose. ^ Skamania County-Would have funded the existing Stevenson Pool.Received 40%in 2014 general election. ` Snohomish-Would have supplemented existing funding for park maintenance and operations.Received 31%in JO1S primary election. ^ University Place-Submitted by petition to stave off elimination of city recreation programs.Received 35%in April 2O16 special election. ^ Vancouver-Would have supplemented existing funding for city parks.Received 34%of vote in 2012 general election. Last Modified:May 24.2018 m2ommoscmWashington.All rights reserved.Privacy, B Terms. 32 • iii ... kx .. x y/'4"4� • Mx i;; ... ..:: ..:.. :a—: f: ,,.. .-. TYOF 4:t:•...a'�'''.v,; 1.1 § �ry fl . •. Yakima :wu ,Q�ti ......:,. ... �X�' :. q r .., x a x.. M":.. EE... October 1,2018 2019 Preliminary Budget lb vor .... :ir . . .. .... If . . ......... M: -s• it I X f i! • 01 a' e }} ail.:: !. ktes i At• 33 „ x �.w nf' xx 34 Gt1 • CITY OF Yakima 2019 BUDGET SUMMARY FOR THE RESIDENTS OF THE CITY OF YAKIMA TABLE OF CONTENTS PAGE Introduction and Executive Summary 1 Financial Health/ Fund Balance 3 General Fund Revenues 5 General Fund Expenditures 7 General Fund Challenges/ Recommendations 9 Appendix Preliminary Budget by Functional Grouping 11 35 ri . 36 INTRODUCTION AND EXECUTIVE SUMMARY On September 20,2018 the City Manager's Office presented the 5-Year Financial Plan to help the City of Yakima understand the revenue and expenditure forecast and its impact on the City's financial reserves. Aprimary purpose of the document was to provide context for present and future budget decisions and to understand the long-term financial impacts. The main points of this document were used as foundations for the 2019 Budget.Specifically,the 2019 Budget is sensitive to: 1. Reserves which are below the City's policy level requirement of 16.7% (2 months of expenditures). 2. Structural problems that have resulted in expenses exceeding revenues.Yet it is important to point out the levels of services(expenses)are negatively impacted by historical funding reductions. The City is currently challenged to provide service levels expected by the community. The following framework was adopted by council on September 11,2018 and has served as the blueprint in the creation of the 2019 Budget: I. Expenses in 2019 should mirror 2018 expenses plus obligations(contracts)plus realistic budgets(needed to deliver minimum level of services). II. Expenses in 2019 may not exceed Revenues in 2019. III. Maintaining level of services is imperative. The Preliminary 2019 Budget shows: 2019 Projected Surplus Revenues Expenditures (Deficit) General Fund $ 66,837,264 $ 67,537,381 $ (700,117) Parks and Streets 10,751,481 10,948,029 (196,548) Restricted Funds(100's) 24,410,502 25,634,737 (1,224,235) Debt(200's) 4,915,159 4,915,609 (450) Capital(300's) 28,414,248 26,259,826 2,154,422 Enterprise Construction(400's) 81,762,945 88,110,576 (6,347,631) Transfers(500's) 26,485,740 27,546,626 (1,060,886) Agency(600's) 655,000 655,000 — Trust(700's) 24,000 12,000 12,000 Total 2019 Projected Budget $ 244,256,339 $ 251,619,784 $ (7,363,445) 2019 City of Yakima Preliminary Budget-1 37 . r fir.. ..................:.. r 2-2019 City of Yakima Preliminary Budget 38 FINANCIAL HEALTH/FUND BALANCE Current and Projected Reserves Over the next five years,the City's revenues and expenditures are forecast to be structurally out of balance. Given the pressure created by the Charter amendments of 2013 and 2014,and the inflationary impact of collective bargaining agreements with the City's ten(nine beginning 2019)bargaining units,absent strategic redirection,the City's revenues are not expected to keep up with the maintenance cost of current service levels,resulting in a fiscal imbalance.The table below depicts the Preliminary Budget projected ending fund balance for 2019 with current budget numbers. CURRENT RESERVE BALANCE-GENERALFUND 2018 2016 2017 Year End 2019 General Fund Actual Actual Estimate Projected Change Beginning Fund Balance $ 6,887,223 $ 8,266,909 $ 8,750,726 $ 9,498,244 Revenues 64,791,138 66,496,492 67,580,600 66,837,264 (1.1)% Expenditures 63,411,452 66,012,675 66,833,082 67,537,381 1.1 % Ending Fund Balance $ 8,266,909 $ 8,750,726 $ 9,498,244 $ 8,798,127 (7.4)% Reserve as a%of Expenditures 13.0% 13.3% 13.8% 12.5% The table below depicts the projected ending fund balance for years 2018 through 2023 reflecting the current budget numbers,and using the percentages from the 5-Year Plan. GENERAL FUND RESERVE FORECAST VS POLICY LEVEL REQUIREMENTS 2018 2017 Year End 2019 2020 2021 2022 2023 General Fund Actual Estimate Projected Forecast Forecast Forecast Forecast General Fund Reserve Forecast 8,266,909 8,750,726 9,498,244 8,798,127 8,822,018 8,777,936 8,803,159 Policy Level Requirements 4 16.7% 11,024,117 11,161,125 11,278,743 11,459,202 11,780,060 12,098,122 12,436,869 Net Increase(Deficit) ($2,757,208) ($2,410,399) ($1,780,499) (2,661,075) (2,958,042) (3,320,186) (3,633,710) The following chart shows that the difference between the annual forecast reserve and the policy level requirement increases over time because revenues are not expected to grow at the rate needed to fund operating expenditures as well as the required reserves. GENERAL FUND OPERATING INCOME/LOSS ANALYSIS 2018 2017 Year End 2019 2020 2021 2022 2023 General Fund Actual Estimate Projected Forecast Forecast Forecast Forecast Operating Revenues 66,496,492 67,580,600 66,837,264 68,641,870 70,495,200 72,469,066 74,498,200 Operating Expenditures 66,012,675 66,833,082 67,537,381 68,617,979 70,539,282 72,443,843 74,472,271 Net Operating(Loss) $483,817 $747,518 ($700,117) 23,891 (44,082) 25,223 25,929 2019 City of Yakima Preliminary Budget-3 39 Key Reminders • The 2019 Preliminary Budget funds all vacant positions. • The 2019 Preliminary Budget fund 001 (excluding 003 and 612) is not balanced by$786K. • The 2019 Preliminary Budget funds realistic operational expenses to provide a minimum level of service. • The 2019 Preliminary Budget funds all obligations and contracts. 4-2019 City of Yakima Preliminary Budget 40 GENERAL FUND REVENUES Revenues are supported by four main revenue streams each represent roughly a quarter of the total General Fund revenues: Property Taxes,Retail Sales &Use Taxes,Utility Taxes,and Other Revenue (business licenses, gambling taxes,and fines and forfeitures). 2019 GENERAL FUND REVENUE BUDGET BY SOURCE Utility Tax Business Tax $10,433,936 S7,984,113 • 15,6«., • • Other Tax,Lic,Permits S2,593,324 . Charges for Services $6,933,957 Retail Sales&Use Tax 21,7 8,510 Interg&ven rnent I $3,873,659 Fines,Forfeitures&Misc S2,6112,OOO Property Ti x $[O,655,766 I5(.r% 2019 City of Yakima Preliminary Budget-5 41 . r fir.. ..................:.. r 6-2019 City of Yakima Preliminary Budget 42 GENERAL FUND EXPENDITURES 2019 GENERAL.FUND EXPENDITURE BUDGET GENERALIZED CATEGORIES Personnel Benefits 513,167,379 19,5% Salaries&Wages $.37,756,581 55.9% ••••••-. Supplies,Equip,Misr (4, • $1.557,469 • • /3% Capital Outlays Iau,000 u • .. services&Charges • $9,903,398 • • 14,7% • Intergov't Services Transfers $2,308,965 51,779,540 1,0% Debt Service $998,849 2019 City of Yakima Preliminary Budget- 7 43 2019 GENERAL FUND CRIMINAL JUSTICE EXPENDITURES BY OPERATIONS Municipal Court Legal $1,713,565 S1,813,403 2.5% Code 2.7% Fire Adm inistration S14,592,725 S1„963,051 21.6% 2.9% Indigent Defense A A A A $1,050,001 All Other Operations $15,564,733 Police S30,839,905 45.7'11, The data utilized in the following comparison was compiled from the State Auditor's Local Government Financial Reporting System(LGFRS) for the year 2017, the most recent year available. This chart includes the categories of Public Safety,Judicial Activities and Legal, and includes comparisons of the top 10 Cities in Washington State with a population between 75,000 and 130,000. While the State Auditor pulls these numbers together slightly differently, the percentages shown are comparable to the above chart. TOTAL EXPENDITURES SPENT ON PUBLIC SAFETY,LEGAL&MUNICIPAL COURT 77.1 . BO 7S 71,8% 70 — 65 5740, 60 514% „.. ty of City of City of C:ity of City of C:ity of C:ity at C:ity of City of C:ity of Yakima Federal Way Everett Kennewick Srokane Valley Kirkland Kent Auburn Bellingham Renton 8-2019 City of Yakima Preliminary Budget 44 GENERAL FUND CHALLENGES/RECOMMENDATIONS The Preliminary 2019 Budget shows a General Fund(001)that is not balanced. 1. Staff will present options including,level of service,quality of life, operational and salary cuts. 2. Council may accept proposed cuts. 3. Council may accept$786K in cuts to balance the General Fund only. 4. Council may accept$786K in cuts to balance the General Fund AND place other funds in reserves. 5. Council may accept$786K in cuts to balance the General Fund AND undo some of the cuts AND keep a portion for reserves. Once the 2019 Preliminary Budget is balanced through short term cuts,the City has to identify long term new revenues that will help address the structural deficit.It is important to understand that the 2019 cuts are bandaid solutions that only accomplish one goal:a balanced budget.No different than the decision to use reserves to balance the budget,these cuts are not long term solutions. A new revenue strategy must begin in 2019 to ensure the sustainability of Yakima's municipal government. There are significant challenges before the City;the regional economy and demographics provide limited growth. Expenses are conservative and levels of services are already impacted. In summary: • The City needs to develop an approach to meet policy reserve requirements for the General Fund. • Zero to little growth in maintenance and operation annual allocations can be done in the short term,but it is not a long-term solution unless levels of services are changed.There are some cases in which the level of service may not be able to be reduced. An example would be contracts for maintenance of computer software. • There is a long term structural deficit in the General Fund.The effect of which is estimated revenues do not cover estimated expenditures. • The City must adopt a Cost Allocation Plan to appropriately reimburse the General Fund. • The City must consider long term salary and or benefit reductions including examination of pension plans and contracts. • The City must consider new revenue options and other business models. 9-2019 City of Yakima Preliminary Budget 45 fir.. .................:.. 2019 City Of Yakima Preliminary Budget-10 46 Appendix 1 y 1k - y \ \ / } T � t p � PRELIMINARY BUDGET BY FUNCTIONAL GROUPING 219 City o Yakima Preliminary Budget-11 47 2019 CURRENT BUDGET BY CITY FUNCTIONAL GROUPING 2017 2018 2018 2019 2019 Actual Amended Year-End Proposed vs 2018 Expenditures Expenditures Budget Estimate Expenditures Est General Government City Management $ 395,581 $ 434,550 $ 434,548 $ 451,971 4.0 % Indigent Defense 1,021,792 1,050,000 1,050,000 1,050,000 - % City Council 253,907 262,650 266,542 295,936 11.0 % City Clerk/Records 636,541 675,267 725,267 717,857 (1.0)% Human Resources 613,633 763,825 763,565 779,363 2.1 % Legal 1,616,593 1,686,272 1,686,879 1,813,403 7.5 % Municipal Court 1,439,477 1,585,265 1,578,629 1,713,565 8.5 % Planning 577,096 629,748 632,747 685,791 8.4 % Code Administration 1,783,601 1,926,299 1,926,297 1,963,051 1.9 % City Hall Facility 550,676 533,319 533,316 602,352 12.9 % Economic Development 595,405 514,138 435,600 427,846 (1.8)% Police 28,657,996 29,388,534 29,358,529 30,839,905 5.0 % Fire 13,436,007 14,080,858 14,080,858 14,592,725 3.6 % Information Technology 3,521,662 3,523,653 3,523,653 3,744,961 6.3 % Intergovernmental 156,361 160,372 160,372 160,372 - % Transfers 4,187,350 3,952,540 2,413,060 2,013,060 (16.6)% Financial Services 1,553,313 1,651,963 1,651,963 1,793,616 8.6 % State Examiner 127,883 130,000 130,000 130,000 - % Police Pension 815,405 927,497 929,497 929,497 - % Firemen's Relief&Pension 1,126,446 1,229,483 1,229,483 1,216,963 (1.0)% Utility Services 1,570,958 1,829,146 1,816,173 - (100.0)% Parking 156,750 178,783 176,582 186,854 5.8 % Purchasing 557,489 624,773 624,771 648,583 3.8 % Engineering 660,751 730,903 704,751 779,711 10.6 % Total General Fund 66,012,673 68,469,838 66,833,082 67,537,382 1.1 % Parks&Recreation 5,473,986 5,626,305 4,944,555 5,048,475 2.1 % Street&Traffic Operations 7,295,657 5,441,133 5,794,821 5,899,554 1.8 % Total General Government Funds $ 78,782,316 $ 79,537,276 $ 77,572,458 $ 78,485,411 1.2 % 12-2019 City of Yakima Preliminary Budget 48 2019 CURRENT BUDGET BY CITY FUNCTIONAL GROUPING 2019 Estimated Increase 2019 Beginning Ending (Decrease) Projected Fund Fund In Fund Revenues Revenue Balance Balance Balance General Fund $ 66,837,264 $ 9,498,244 $ 8,798,127 $ (700,117) Parks&Recreation 5,088,140 370,406 410,071 39,665 Street&Traffic Operations 5,663,341 858,791 622,578 (236,213) Total General Government Funds $ 77,588,745 $ 10,727,441 $ 9,830,776 $ (896,665) 2019 City of Yakima Preliminary Budget-13 49 2019 CURRENT BUDGET BY CITY FUNCTIONAL GROUPING 2017 2018 2018 2019 2019 Actual Amended Year-End Proposed vs 2018 Expenditures Expenditures Budget Estimate Expenditures Est Other Governmental Operating Funds Economic Development $ 118,550 $ 116,400 $ 116,400 $ 116,400 - % Community Development 1,529,075 3,121,636 3,121,623 1,509,331 (51.6)% Community Relations 556,399 640,098 630,135 659,140 4.6 % Cemetery 279,792 268,602 269,571 297,153 10.2 % Emergency Services 1,425,736 1,411,607 1,385,134 1,357,829 (2.0)% Public Safety Communications 3,718,397 4,289,986 4,138,125 4,427,779 7.0 % Police Grants 326,400 406,648 404,777 417,918 3.2 % Downtown Improvement District 94,811 188,127 188,127 193,924 3.1 % Trolley(Yakima Interurban Lines) 22,282 31,699 31,699 31,699 - % Front St Business Impr Area 3,500 3,500 3,500 3,500 - % Tourist Promotion(ConvCtr) 1,659,678 1,731,163 1,677,413 1,768,274 5.4 % Capitol Theatre 443,278 436,587 441,587 442,356 0.2 % PFD Revenue-Convention Center 730,051 733,213 733,213 958,395 30.7 % Tourist Promotion Area 662,949 707,200 675,000 690,000 2.2 % PFD Revenue-Capitol Theatre 661,400 661,400 661,400 683,400 3.3 % Total Other Governmental Operating Funds $ 12,232,298 $ 14,747,866 $ 14,477,704 $ 13,557,098 (6.4)% Government Capital Funds Arterial Street $ 1,247,080 $ 4,902,457 $ 1,342,420 $ 12,077,639 799.7 % C.B.D.Capital Improvement 42,278 10,838,560 2,836,060 10,838,560 282.2 % Capitol Theatre Construction 104,743 60,000 15,000 60,000 300.0 % Yakima Rev Development Area 1,765,377 11,500,142 1,526,645 11,500,142 653.3 % Parks&Recreation Capital 1,921,335 8,224,810 8,291,128 - (100.0)% Fire Capital 1,189,526 80,000 80,000 80,000 - % Law&Justice Capital 823,093 695,000 633,875 570,000 (10.1)% Public Works Trust Construction 510,965 476,495 476,496 838,584 76.0 % REET 2 Capital Construction 700,453 777,646 777,646 775,320 (0.3)% Street Capital Fund 95,775 550,000 550,000 550,000 - % Convention Center Capital Impr 241,209 549,560 466,560 1,013,600 117.2 % Cum.Reserve for Capital Impr 332,565 10,000 150,813 33,620 (77.7)% Total Government Capital Funds $ 8,974,399 $ 38,664,670 $ 17,146,643 $ 38,337,465 123.6 14-2019 City of Yakima Preliminary Budget 50 2018 CURRENT BUDGET BY CITY FUNCTIONAL GROUPING 2019 Estimated Increase 2019 Beginning Ending (Decrease) Projected Fund Fund In Fund Revenues Revenue Balance Balance Balance Other Governmental Operating Funds Economic Development $ 119,356 $ 46,681 $ 49,638 $ 2,957 Community Development 1,681,434 931,793 1,103,896 172,103 Community Relations 659,600 736,865 737,324 459 Cemetery 298,500 84,673 86,020 1,347 Emergency Services 1,412,809 110,463 165,443 54,980 Public Safety Communications 4,209,740 270,794 52,755 (218,039) Police Grants 430,000 1,110,066 1,122,148 12,082 Downtown Improvement District 200,340 111,689 118,105 6,416 Trolley(Yakima Interurban Lines) 31,704 20,957 20,961 4 Front St Business Impr Area 3,735 390 625 235 Tourist Promotion(Cony Ctr) 1,773,250 379,303 384,279 4,976 Capitol Theatre 452,720 17,151 27,515 10,364 PFD Revenue-Convention Center 946,000 1,008,162 995,767 (12,395) Tourist Promotion Area 690,350 79,692 80,042 350 PFD Revenue-Capitol Theatre 711,250 244,617 272,467 27,850 Total Other Governmental Operating Funds $ 13,620,788 $ 5,153,296 $ 5,216,985 $ 63,689 Government Capital Funds Arterial Street $ 10,789,713 $ 2,411,724 $ 1,123,799 $ (1,287,925) C.B.D.Capital Improvement 10,821,250 8,572,362 8,555,052 (17,310) Capitol Theatre Construction 60,000 147,791 147,791 - Yakima Rev Development Area 13,000,000 1,167,480 2,667,338 1,499,858 Parks&Recreation Capital - 266,898 266,898 - Fire Capital 163,000 500,984 583,984 83,000 Law&Justice Capital 586,450 289,807 306,257 16,450 Public Works Trust Construction 1,231,948 2,644,263 3,037,627 393,364 REET 2 Capital Construction 1,147,500 811,508 1,183,687 372,179 Street Capital Fund 600,000 3,827,884 3,877,884 50,000 Convention Center Capital Impr 759,100 922,054 667,554 (254,500) Cum.Reserve for Capital Impr 45,000 467,608 478,988 11,380 Total Government Capital Funds $ 39,203,961 $ 22,030,363 $ 22,896,859 $ 866,496 2019 City of Yakima Preliminary Budget-15 51 2019 CURRENT BUDGET BY CITY FUNCTIONAL GROUPING 2017 2018 2018 2019 2019 Actual Amended Year-End Proposed vs 2018 Expenditures Expenditures Budget Estimate Expenditures Est Enterprise Operating Funds Airport Operating Fund $ 1,236,388 $ 1,278,178 $ 1,323,523 $ 1,390,426 5.1 % Stormwater Operating 3,226,069 3,251,193 3,541,975 3,737,204 5.5 % Transit 8,470,875 9,682,563 9,055,719 9,501,399 4.9 % Refuse 6,674,363 7,193,658 7,193,658 7,607,243 5.7 % Wastewater Operating 21,640,656 23,896,493 23,578,405 25,393,001 7.7 % Water Operating 9,865,200 10,450,868 10,480,239 10,332,928 (1.4)% Irrigation Operating 1,786,666 1,802,753 1,800,962 1,876,517 4.2 % Utility Services 1,871,700 n/a Total Enterprise Operating Funds $ 52,900,217 $ 57,555,706 $ 56,974,481 $ 61,710,418 8.3 Enterprise Capital Funds Airport FAA $ 1,190,622 $ 3,884,193 $ 2,624,193 $ 4,810,000 83.3 % Stormwater Capital 941,617 2,450,000 1,527,547 3,085,000 102.0 % Transit Capital Reserve 2,143,485 500,000 500,000 1,270,000 154.0 % Wastewater Facilities Capital Rsv 193,162 1,250,000 415,000 1,250,000 201.2 % Wastewater Construction 3,067,568 5,560,000 5,034,563 3,560,000 (29.3)% Water Capital 577,489 1,696,500 523,450 2,135,000 307.9 % Wastewater Capital 9,212 2,950,000 950,000 3,025,000 218.4 % Irrigation Capital 352,416 8,367,542 442,542 5,367,542 n/a Total Enterprise Capital Funds $ 8,475,571 $ 26,658,235 $ 12,017,295 $ 24,502,542 103.9 Internal Service Funds Equipment Rental $ 4,745,892 $ 4,746,938 $ 4,705,746 $ 5,618,157 19.4 % Environmental Fund 542,431 422,950 422,950 222,950 (47.3)% Public Works Administration 1,233,464 1,254,593 1,211,092 1,258,251 3.9 % Total Internal Service Funds $ 6,521,787 $ 6,424,481 $ 6,339,788 $ 7,099,358 12.0 Employee Benefit Reserves Unemployment Compensation $ 553,640 $ 182,706 $ 182,406 $ 188,629 3.4 % Employees Health Benefit 11,875,549 12,961,129 12,556,443 13,649,443 8.7 % Workers'Compensation 2,154,260 1,821,376 2,177,370 2,223,444 2.1 % Wellness/EAP Fund 62,432 76,900 76,909 66,900 (13.0)% Total Employee Benefit Reserves $ 14,645,881 $ 15,042,111 $ 14,993,128 $ 16,128,416 7.6 Risk Management Reserve Risk Management $ 3,516,409 $ 4,021,304 $ 3,782,174 $ 4,318,852 14.2 % Total Risk Management Reserve $ 3,516,409 $ 4,021,304 $ 3,782,174 $ 4,318,852 14.2 16-2019 City of Yakima Preliminary Budget 52 2019 CURRENT BUDGET BY CITY FUNCTIONAL GROUPING 2019 Estimated Increase 2019 Beginning Ending (Decrease) Projected Fund Fund In Fund Revenues Revenue Balance Balance Balance Enterprise Operating Funds Airport Operating Fund $ 1,390,502 $ 75,516 $ 75,592 $ 76 Stormwater Operating 3,950,044 1,020,279 1,233,120 212,841 Transit 9,562,225 3,147,583 3,208,408 60,825 Refuse 7,477,946 1,014,814 885,518 (129,296) Wastewater Operating 23,578,045 5,075,635 3,260,679 (1,814,956) Water Operating 10,343,000 1,381,204 1,391,276 10,072 Irrigation Operating 1,859,100 1,003,419 986,001 (17,418) Utility Services 1,871,593 - (107) (107) Total Enterprise Operating Funds $ 60,032,455 $ 12,718,450 $ 11,040,487 $ (1,677,963) Enterprise Capital Funds Airport FAA $ 4,987,150 $ 569,849 $ 746,999 $ 177,150 Stormwater Capital 1,200,000 4,267,773 2,382,773 (1,885,000) Transit Capital Reserve 1,462,000 6,080,664 6,272,664 192,000 Wastewater Facilities Capital Rsv 1,000,000 3,352,165 3,102,165 (250,000) Wastewater Construction 2,900,000 4,862,143 4,202,143 (660,000) Water Capital 565,000 5,392,242 3,822,242 (1,570,000) Wastewater Capital 501,500 3,487,303 963,803 (2,523,500) Irrigation Capital 7,217,060 4,089,842 5,939,360 1,849,518 Total Enterprise Capital Funds $ 19,832,710 $ 32,101,981 $ 27,432,149 $ (4,669,832) Internal Service Funds Equipment Rental $ 4,746,378 $ 2,412,327 $ 1,540,548 $ (871,779) Environmental Fund 145,000 308,106 230,156 (77,950) Public Works Administration 1,240,201 416,535 398,485 (18,050) Total Internal Service Funds $ 6,131,579 $ 3,136,968 $ 2,169,189 $ (967,779) Employee Benefit Reserves Unemployment Compensation $ 221,343 $ 162,044 $ 194,758 $ 32,714 Employees Health Benefit 14,189,179 1,499,389 2,039,124 539,735 Workers'Compensation 1,497,704 (586,505) (1,312,245) (725,740) Wellness/EAP Fund 100,000 21,807 54,907 33,100 Total Employee Benefit Reserves $ 16,008,226 $ 1,096,735 $ 976,544 $ (120,191) Risk Management Reserve Risk Management $ 4,345,936 $ 1,624,217 $ 1,651,301 $ 27,084 Total Risk Management Reserve $ 4,345,936 $ 1,624,217 $ 1,651,301 $ 27,084 2019 City of Yakima Preliminary Budget-17 53 2019 CURRENT BUDGET BY CITY FUNCTIONAL GROUPING 2017 2018 2018 2019 2019 Actual Amended Year-End Proposed vs 2018 Expenditures Expenditures Budget Estimate Expenditures Est Debt Service Public Facility District PFD Debt Service $ 1,029,213 $ 1,029,850 $ 1,029,850 $ 1,030,925 0.1 % General Obligation Misc LTGO Bonds 3,320,582 3,095,992 2,938,299 3,535,614 20.3 % 1996 LTGO Bonds 425,465 425,265 425,265 349,070 (17.9)% Utility Bonds 2008 Water Bond $ 227,917 $ 231,000 $ 231,000 $ — (100.0)% 2008 Wastewater Bond 386,510 413,813 413,813 415,063 0.3 % 2004 Irrigation Bond 263,094 321,341 321,341 320,154 (0.4)% 2003 Wastewater Bond 1,118,583 1,165,300 1,165,300 1,162,400 (0.2)% Total Debt Service $ 6,771,364 $ 6,682,561 $ 6,524,868 $ 6,813,226 4.4 Trust and Agency Funds YakCorps Agency Fund — 655,000 655,000 655,000 — % Cemetery Trust 12,000 12,000 12,000 12,000 — % Total Trust and Agency Funds $ 12,000 $ 667,000 $ 667,000 $ 667,000 — % Total City Budget $ 192,832,242 $ 250,001,212 $ 210,495,538 $ 251,619,784 19.5 18-2019 City of Yakima Preliminary Budget 54 2019 CURRENT BUDGET BY CITY FUNCTIONAL GROUPING 2019 Estimated Increase 2019 Beginning Ending (Decrease) Projected Fund Fund In Fund Revenues Revenue Balance Balance Balance Debt Service Public Facility District PFD Debt Service $ 1,025,795 $ 165,513 $ 160,383 $ 5,130 General Obligation Misc LTGO Bonds 3,535,614 8,735 8,734 (1) 1996 LTGO Bonds 353,750 76,157 80,837 4,680 Utility Bonds 2008 Water Bond — 365,047 365,047 — 2008 Wastewater Bond 414,238 (22,710) (23,535) (825) 2004 Irrigation Bond 317,542 (26,100) (28,712) (2,612) 2003 Wastewater Bond 1,166,000 1,579,632 1,583,232 3,600 Total Debt Service $ 6,812,939 $ 2,146,274 $ 2,145,986 $ 288 Trust and Agency Funds YakCorps Agency Fund $ 655,000 $ (530,293) $ (530,293) $ — Cemetery Trust 24,000 683,296 695,296 12,000 Total Trust and Agency Funds $ 679,000 $ 153,003 $ 165,003 $ (12,000) Total City Budget $ 244,256,338 $ 90,888,729 $ 83,525,283 $ 7,363,446 2019 City of Yakima Preliminary Budget-19 55 56 ............... :.....:.:.:.. .......:.... .............. .. ... r s . r .. 2019 City of Yakima Preliminary Budget-1 57 APPENDIX 1 - GENERAL FUND ONLY FINANCIAL HEALTH/GENERAL FUND (001) BALANCE Current and Projected Reserves Over the next five years,the City's revenues and expenditures are forecast to be structurally out of balance. Given the pressure created by the Charter amendments of 2013 and 2014,and the inflationary impact of collective bargaining agreements with the City's ten(nine beginning 2019)bargaining units, absent strategic redirection,the City's revenues are not expected to keep up with the maintenance cost of current service levels,resulting in a fiscal imbalance.The table below depicts the Preliminary Budget projected ending fund balance for 2019 with current budget numbers. CURRENT RESERVE BALANCE 2018 2016 2017 Year End 2019 General Fund-001 Only Actual Actual Estimate Projected Change Beginning Fund Balance $ 5,539,189 $ 6,570,959 $ 6,664,551 $ 7,471,176 Revenues 61,374,514 63,018,704 64,161,628 63,226,694 (1.5)% Expenditures 60,342,744 62,925,112 63,355,003 64,012,970 1.0 Ending Fund Balance $ 6,570,959 $ 6,664,551 $ 7,471,176 $ 6,684,900 (10.5)% Reserve as a%of Expenditures 10.9% 10.6% 13.8% 12.5% The table below depicts the projected ending fund balance for years 2018 through 2023 reflecting the current budget numbers,and using the percentages from the 5-Year Plan. GENERAL FUND RESERVE FORECAST VS POLICY LEVEL REQUIREMENTS 2018 2017 Year End 2019 2020 2021 2022 2023 General Fund-001 Only Actual Estimate Projected Forecast Forecast Forecast Forecast General Fund Reserve Forecast $ 6,570,959 $ 6,664,551 $ 7,471,176 $ 6,684,900 $ 6,581,537 $ 6,410,346 $ 6,301,220 Policy Level Requirements 416.7% 10,508,494 10,580,286 10,690,166 10,861,209 11,165,323 11,466,786 11,787,856 Net Increase(Deficit) $(3,937,535) $(3,915,735) $(3,218,990) $(4,176,309) $(4,583,786) $(5,056,440) $(5,486,636) The following chart shows that the difference between the annual forecast reserve and the policy level requirement increases over time because revenues are not expected to grow at the rate needed to fund operating expenditures as well as the required reserves. 2-2019 City of Yakima Preliminary Budget 58 GENERAL FUND OPERATING INCOME/LOSS ANALYSIS 2018 2017 Year End 2019 2020 2021 2022 2023 General Fund-001 Only Actual Estimate Projected Forecast Forecast Forecast Forecast Operating Revenues $63,018,704 $64,161,628 $63,226,694 $64,933,815 $66,687,028 $68,554,265 $70,473,784 Operating Expenditures 62,925,112 63,355,003 64,012,970 65,037,178 66,858,219 68,663,391 70,585,966 Net Operating(Loss) $ 93,592 $ 806,625 $ (786,276) $ (103,363) $ (171,191) $ (109,126) $ (112,182) 2019 City of Yakima Preliminary Budget-3 59 Key Reminders • The 2019 Preliminary Budget funds all vacant positions. • The 2019 Preliminary Budget fund 001 (excluding 003 and 612) is not balanced by$786K. • The 2019 Preliminary Budget funds realistic operational expenses to provide a minimum level of service. • The 2019 Preliminary Budget funds all obligations and contracts. 4-2019 City of Yakima Preliminary Budget 60 GENERAL FUND (001) REVENUES Revenues are supported by four main revenue streams each represent roughly a quarter of the total General Fund revenues: Property Taxes, Retail Sales & Use Taxes, Utility Taxes, and Other Revenue (business licenses, gambling taxes,and fines and forfeitures). 2019 GENERAL FUND (001) REVENUE BUDGET BY SOURCE Business Tax Utility Tax S111,433,936 $7,04,113 16.5% 12.6 f • Other Tax,Lic,Permits •• $2,593,324 • 4.1% • Charges for Services $6,935,957 1 1,i3% Retail Saks&Use Tax intergovernmental S19,397,450 $3,775,659 311.7'>it 6.0% Fines,Forfeitures&Vlisc $2,602,000 a.l K.a Property Tax S9,504,255 2019 City of Yakima Preliminary Budget-5 61 GENERAL FUND (001) EXPENDITURES 2019 GENERAL FUND (001) EXPENDITURE BUDGET GENERALIZED CATEGORIES Personnel Benefits Salaries Sr wages ., S12,205,716 S36,683,040 573!l. isiss • • Supplies,Equip,Misc .. I • S1,482,469 • Capital Outlays S65,000 Services Sr Charges sti $8,891,891 AMY. 139% • • M • lntergov't Services Transfers $1,908,965 S1,777,040 3.0% Debt Service $998,849 6-2019 City of Yakima Preliminary Budget