HomeMy WebLinkAbout10/03/2019 02 Council Review of Proposed 2020 Budget - 2 of 4 a\'4\lyy bxk ik 1
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEM ENT
Item No. 2.
For Meeting of: October 3, 2019
ITEM TITLE: Council Review of Proposed 2020 Budget-2 of 4
SUBMITTED BY: Cynthia Martinez, Interim City Manager
Steve Groom, Director of Finance & Budget
SUMMARY EXPLANATION:
This is the second of four study sessions on the proposed 2020 Preliminary Budget. The
two remaining study sessions are in the process of being rescheduled.
ITEM BUDGETED: NA
STRATEGIC PRIORITY: Public Trust and Accountability
APPROVED FOR ; Interim City Manager
er
SUBMITTAL:
STAFF RECOMMENDATION:
BOARD/COMMITTEE RECOMMENDATION:
ATTACHMENTS:
Description Upload Date Type
D ses 9/30/2019 ( r Memo
2020 Budget
Oct. 3 Work Session
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Recap from prior
meeting
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2
Revenue Recap
Every funding source has been
forecasted
Utility Tax ( Electricity) decrease
acknowledged
Property Tax up 1 . 9%, AV up 7%
3
Expense Recap
Salaries & Wages
Increasing cost on existing staff number
Insurance issues
Workers Comp — addressing past deficit
General Liability — big rate increase
Enterprise expenses essentially level
x
Today's Agenda
1 . Why Take a Long View?
2 . Fundamentals of Capital Budgeting
3 . Capital Project specifics
Council Process
1 . Staff will present Policy Issue details,
options
2 . Revenue options will then need to be
considered
3 . 3rd and 4th Study Sessions will be for
making decisions, weighing costs, and
getting final budget balancing
6
Policy Issues
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Staff Guidelines
1 . What can be managed within existing
budget, absorbed or traded ?
2 . What can be deferred, at what cost?
3 . What MUST be dealt with now?
Policy Issue
Clean Cities Initiative
• Previously presented
• Revenue and service level options
Policy Issue
Vehicle Replacement
• Departments have had flexibility
• Funding replacement fund has been
deferred
• Charter requires specific budget formulas
Policy Issue
Fire Department
• Fees proposed
• Positions proposed
• Potentially off-setting revenue and
expenses
11
Policy Issue
Police Department
• Communications and data triangulation —
cell phones
• PT Community Response officers
• Data analysis position
12
Policy Issue
Parking Enforcement
• License Plate Reading technology
13
Policy Issue
Code Administration
• Plans examiner position
• Permit volume and associated revenue
has increased substantially
Policy Issue
Community Centers Maintenance
• Added in 2019
• Re-evaluating in 2020
15
Policy Issue
Economic Development
• Airline Service
• Market research study, pursue
partnerships, expand destinations
16
Policy Issue
Parks & Recreation
• Ball Field Maintenance position
• Beyond the Bell program
• Lions Pool Dehumidification system
17
City Manager /
Council Discussion and
Input
11 : 30
20 minutes
Review 4- Day Checklist
• Review placeholders to add to
remaining meetings ?
• Direction to staff?
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Next Study Session
Revenue Options
• Utility Tax options
• Levy Lid Lift options given current
updated Assessed Valuations
• In - lieu rate options
21
2020 Budget Process
Sept — Preliminary Citywide budget
— Final Property Valuation from County
Oct — C uncil stu y sessions
Fun a entals an no n ur les
- licy Issues
avenue o ti ns
- Fin in glance
Nov — Public Hearings
Dec — Adoption 22
2020 Budget Process
An increasingly well - managed city
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Distributed at the
Meeting 10-3- lei
..t("bilk- OFFICE OF THE CITY MANAGER
" 129 North Second Street
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.. City Hall,Yakima,Washington 98901
S' `•'� ' " : ! ` Phone(509)575-6040
TO: Honorable Mayor and Council Members
FROM: Cynthia Martinez, Interim City Manager
DATE: October 1, 2019
RE: 2019 General Fund financial corrective action plan
This memo is a follow up to Steve Groom's presentation last Tuesday, September 24th at the
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Agenda Preview Meeting.
Monthly revenue-monitoring and the quarterly financial review meetings that finance staff have
been conducting with department directors and managers have indicated three negative budget
forecast changes to the 2019 year-end estimate:
Issue Response
Utility Tax —electricity anticipated shortfall Staff contacted PacifiCorp to find out if
($700,000 or 12% by year-end). 2019 budget remittances were being calculated incorrectly
is $5.8 million, a $577,000 increase over and to see if an audit was appropriate. They
2018 actual. confirmed that the 2018 caps had been
eliminated but the 2018 tax reforms more
than offset. They have offered a complete
database of meters for us to compare to but
in all likelihood there is little chance of more
than the usual statistical probability of error.
Fire Department general fund budget's year- Salaries and benefits are estimated to
end estimate exceeds budget by $515,000 or exceed budget by $215,000 and overtime by
4% of total $14.4 million. $287,000. The 2019 budget anticipated a
collective bargaining agreement increase but
under-estimated the amount.
Staff is evaluating opportunities to mitigate by
managing overtime and expenses in the
short-term, and evaluating rate increases to
fee-related revenues, and interlocal
agreements for the long-term.
Yakima
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Workers Compensation contribution (city- Police and Fire departments, simply because
portion) in all General Fund departments their proportional share of General Fund
estimated to exceed budget by $500,000. salaries are the largest, are being impacted
the greatest. The Workers Comp fund was
historically negative, 2018 and prior.
Increasing rates charged to departments
solved the Workers Comp fund deficit and
corrected the actual costs in each department
but was underbudgeted in 2019.
These costs are partially mitigated by the sale of one Tiger Mart property ($300,000) and
increased investment income on city investable cash ($200,000). There are many more
offsetting positive and negative variances that staff characterizes as being essentially off-
setting, so those referenced in the table above are not the only variances. However, those
represent the most material and unforeseeable.
In short, 2019 current projections indicate a $1,092,000 budget deficit. With only one quarter
left in the year, immediate course corrective measures will be initiated.
Summary of financial corrective plan:
1. All general fund expenditures are being evaluated—nothing discretionary will be
approved by Finance or the Interim City Manager the remainder of the year.
2. Overtime and hiring decisions are being reviewed. (Police and Fire positions will
continue to be a priority)
3. Fire overtime usage has been reduced for September and Chief Markham is taking
additional steps to manage overtime.
The 2020 budget accounts for each one of these items—the Preliminary Budget has all current
fire positions with 2020 rates, Workers Comp is being budgeted for 2020 more fully-informed,
and Utility Tax revenue is being forecasted based on current actuals.