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HomeMy WebLinkAbout11/05/2019 09 2020 Preliminary Budget - First Public Hearing 't',..an,gtntj ka d E$A AT BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 9. For Meeting of: November 5, 2019 ITEM TITLE: First public hearing on the 2020 Preliminary Budget for the City of Yakima SUBMITTED BY: Cynthia Martinez, Interim City Manager Steve Groom, Director of Finance and Budget SUMMARY EXPLANATION: This is the first public hearing prior to adoption of the 2020 Preliminary Budget. The second hearing is scheduled for November 19, 2020. The revised Preliminary 2020 Budget, for Council's final consideration, incorporates all the direction given by Council during the October 2019 Budget Study Sessions, and adds $526,000 to General Fund reserves. ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR Interim City Manager er SUBMITTAL: STAFF RECOMMENDATION: Conduct the Public Hearing and accept public testimony. BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type L memo 10/31/2019 r Memo Po rP i rat 10/ 4/2019 ( r Mama 2 11 ` r FINANCE DATE: October 31, 2019 TO: The Honorable Mayor and Members of City Council Cynthia Martinez, Interim City Manager FROM: Steve Groom, Finance Director RE: 2020 Proposed Budget Staff respectfully submits the revised Preliminary 2020 Budget for adoption, following the public hearings on Nov. 5th and 19th The revised Preliminary 2020 Budget incorporates all the direction given by Council during the October 2019 Budget Study Sessions. This document presents a balanced General Fund that delivers $526,000 to reserves. Achievements. The City Council made Budget 2020 decisions, enabling Finance to finalize ordinances, reports, narratives and other documents that must all agree with each other at final adoption on December 3rd. Council and staff have worked hard throughout a challenging process, exploring creative options and alternatives, to maintain current service levels. In October, the City Council held public study sessions and made decisions on proposed policy issues achieving the following: ✓ $525,928 to be added to the City's General Fund reserves ✓ $390,000 to address illegal dumping and homelessness encampment code enforcement ✓ $300,000 technology enhancements ✓ $95,000 investment in improved fuel management technology ✓ $87,000 for improved parking enforcement technology ✓ $50,000 additional anticipated election expenses ✓ $50,000 for Pedestrian Master Plan ✓ $50,000 for additional traffic-calming measures ✓ $50,000 for pavement condition index assessment to guide improvements ✓ $44,000 for improved police department cell phone communications ✓ $40,000 community center maintenance ✓ $35,000 for airport closed circuit monitoring ✓ $15,000 for parks field maintenance Priorities. The budget process requires us to evaluate annually the city's priorities, between immediate services and infrastructure, across many funds, being mindful of long-term fiscal sustainability. The goals of the 2020 Budget are: ✓ Achieve a balanced budget in every fund ✓ Assure appropriately-prioritized service delivery ✓ Achieve improvement in General Fund reserves Funding decisions. Proposed new funding sources approved for 2020 are: ✓ $390,000 utility tax increase 3 FINANCE ✓ $50,000 fire inspection filing report fees ✓ $291,000 two-tier hazardous materials fees ✓ $12,250 special event fee increase ✓ $10,000 inspection fee increase ✓ $6,957 airport rate increases Who participated? Staff participates year-round providing service delivery and managing the budget as unforeseen surprises occur. Next year's budget is largely based on what we know about this year's difficulties. City Council exercises governance year round and makes policy decisions. Citizens had the opportunity to speak at study sessions and will have additional opportunities to speak at this hearing and the hearing on November 19th. Property Tax and Sales Tax are the largest sources of revenue for the General Fund. When property owners thrive, property values increase; property tax is a significant funding source for city services. When businesses thrive, our sales tax increases. The City serves the people who, in turn, fund the services provided by city government. Everyone participates in making Yakima a better place. The following table summarizes the proposed budget across all funds. General Fund provides for$525,928 for additional reserves; Enterprise Construction funds are expending over$13 million for current and previous year projects, some of which come from prior year savings in those funds. 2020 RESERVE BALANCE SUMMARY Estimated 2020 2020 Increase in Estimated 2020 Beg. Projected Proposed (Decrease in) 2020 Ending Fund Balance Revenues Expenditures Reserves Balance General Fund S 0,400,255 S 50,600,424 $ 60,173,406 525,02$ S 0,035,213 Parks and Recreation 317,522 5,531,468 5,531,=468 — 377,822 Street Sr Traffic Operations 21,341 S,661,450 5s661,450 . . 28341 General Government Subtotal 8,514,940 83,882,342 83,366,414 525,028 10 340,876 Other Governmental Operating Funds 5,812,002. 1.4,1158567 13,313,344. 270,543 6,033,335 Government Capital Funds. 13,444,401 13,615,426 11,080,203 1,625,133 15,070,037 Enter-prise Operating Funds 14,282,081 61,170,101 62,433,441 (1,26 230) 13 010,741 Enterprise Capital Funds 30,610, 61 13,000,100 25,230,221 (12,2415121) 18,375,140 Internal Service Funds 1,521,003 6,122,344 6,45387 2, (331,434) 1,1 8,540 Employee Benefit.Reserve 1,635,010 16,480,664 16,360,110 120,545 1,756,455. Risk\Iar -genent Reserves 1,857,623 5,037,370 5,042,810 (5,046) 1,052,577 Debt Service Sz Agency Funds 2,477,550 1E00,554 7,302.6Q7 6,85i 2,434,415 Total 31,567,180 $ 221,256,375 $ 232,548,243 $ (11,201,565) $ 70 27 ,32 2 of 3 Yakima.12538.1.MEMO-_Council=_2020_Budget_11-05- 2019.docx 4 FINANCE Levy Lid Lift. The proposed budget seeks to overcome the single biggest problem that all Washington cities share: capped property tax that does not keep pace with property valuations and city costs that typically are more in line with the Consumer Price Index, which was 2.7%. Due to the cap on the city's property tax levy, city residents will see the city's tax rate decrease while their assessed value increases. Given the continued squeeze on service delivery, deferred capital /vehicle replacement, and fund balance restoration that is partially attributable to declining levy rate, Council gave direction to proceed with a Levy Lid Lift resolution for a February election. Where does your tax dollar go? 201?Over p4iiii cr[iF:(Y 1n'Rates .,....., City Cr 3d 5lith :z. au, Cc+' 3th 4.1O[str;ct, x:a`.e�Sthac.L^'a bbrve hshv:x Z} .,.. �� .i}Y5 4ti4;= ?0. d5 '; ?5 3.55•is .. i ppppyy Ti y�.+.yy-��..YYµµr��:Ctt�dyyyy. f�^,.Y{{. {{yy�..{�uy}y: .. IIIIIIH .i tid'x xv.u.xa r.._._J........:.i:a.. t ni.wrz.5ntrGf`. tilt 4J x i9 .= 1 .'. i , .. WA thra F ,,,lit � .....�.n: �. Levy Rate 2 zsc }f't6 l {k4 > •; 10t.; >E}t X ?f;.- Pf^ 2II5 20, .{..3 <..,x tvl, 1i:.:: Every year the budget must balance per state statute. Projected revenues are always outpaced by projected expenditures, which forces difficult prioritizing and decision-making as a part of each budget process. A Levy Lid Lift will ensure funding is available in the future to meet growing public safety demands, on-going public safety vehicle replacement, and technology needs. 3 of 3 Yakima.12538.1.MEMO-_Council__2020_Budget_11-05- 2019.docx 2020 Budget Nov. 5, Public Hearing 0.1 Vs.)47,4 Clear — Reliable — Trustworthy ' : ° ' 2020 Budget Goals 1 . Achieve a balanced budget in every fund 2 . Assure appropriately-prioritized service delivery 3 . Achieve improvement in General Fund's reserve Strategic Priorities ❑ Fiscal sustainability ❑ Main/Arterial street development ❑ Community policing ❑ Safe routes to schools ❑ Youth development ❑ Mill Site Development ❑ Homelessness / Affordable housing ❑ Airport expansion ❑ City facilities ( pools and community centers) ❑ Downtown destination Revised Preliminary Budget 2020 RESERVE BALANCE SUMMARY Estimated 2020 2020 Increase in Estimated 2020 Beg. Projected Proposed (Decrease in) 2020 Ending Fund Balance Rev Expenditures Balame General Fnnd S 9,40028 50 594424 $ e91345 325,323 $ 0,999,243 Parks and Recreation 377,3Mt 3,534163 5,334403 eet Sr ionic Op a_Ions 2t 4i . 664450 8Ac4450 — _ 541 General Government Subtotal 9,314,345 83 92142 53 68,414 525 023 10E43876 Other Governmental Op ating Funds 53312,902 14,1153337 13,34,3,344 27Q543 6083,533 GovernmentCapital Funds 1,444504 13,513,426 44980,203 4623433 13 075 037 Entenrnise Operating F nds 14 252951 eLi 0191 62 475,441 38 13,010,741 Enterprise Capin/ F ds 304 6i� 13,388400 50222 fL,241 L 33 140 Internal ServiceFund 1,324005 61 ,344 6,153,783 a 4 L1. ),549 Employee Benefit Reserve 1,533,313 18,480,554 16240;119 120,545 1,7336,435 Rik MananementR serves r 7>b23 3,337,570 3342216 (,0461 1 952S77 Debt Soo= C Agency Funds 2,477,553 7,508,554 73302,607 S5 2 4844153 Total 5 81,557190 5 221 2 373 $ 272,543,249 3 r11,291,5551 $ 70,275,725 Challenges to overcome : 1 . Restoring General Fund reserves 2 . Property Tax capped vs increase to salaries & benefits in CBAs 3 . Understaffed service departments 4 . Restoring Workers Comp fund 5 . Insurance rate increases 6 . Vehicle Replacement Funding 7 . Prior year budget surprises Accomplishments ✓ 525, 969 added to General Fund reserves . ✓ $390,000 for illegal dumping, code enforcement ✓ $95, 000 improved fuel management technology ✓ $87, 000 parking enforcement technology ✓ $50, 000 additional election expenses ✓ $50, 000 for Pedestrian Master Plan ✓ $50, 000 for additional traffic-calming measures ✓ $50, 000 for pavement condition index ✓ $44, 000 for improved PD communications City of Yakima General Fund Fund Balance as a % f Todd Expenses 25.00% 20 00% „Atr"l* 15.00°A; `, \ 10.00% 5.00% 0.00% 2009 2010 2011 2012 2013 2014 2013 20% 2217 2018 2019 est 2020 2021 2022 2203 2204 cud Steps to Adoption 1 . Rate Hearing Nov. 5th 2 . Budget Hearings . t and 19th 3 . Adoption — Dec . 3rd 2020 Budget Process An increasingly well - managed city yr+tt y�• Y r±i , <g. hh clear — Reliable — Trustworthy %