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11/19/2019 08 2020 Preliminary Budget - Second Public Hearing a\'4\lyy bxk ik 1 + PP• );-41 PPPPPP+Pd s' lii it tYlltYlA.\ta. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 8. For Meeting of: November 19, 2019 ITEM TITLE: Second public hearing on the 2020 Preliminary Budget for the City of Yakima SUBMITTED BY: Steve Groom, Director of Finance and Budget SUMMARY EXPLANATION: This is the second public hearing prior to adoption of the 2020 Preliminary Budget, and provides members of the public an opportunity to provide input on the 2020 Budget. 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 SUBMITTAL: Interim City Manager STAFF RECOMMENDATION: Conduct the Public Hearing and accept public testimony. BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type r Memo 11/7/2019 r Memo Po erPant 11/7/2019 r Memo 2 • FINANCE MEMORANDUM TO: The Honorable Mayor and Members of City Council Cynthia Martinez, Interim City Manager FROM: Steve Groom, Finance Director DATE: October 28, 2019 RE: 2020 Proposed Budget Staff respectfully submits the revised Proposed 2020 Budget for adoption, following the public hearings on Nov. 5th and 19th The revised Preliminary 2020 Budget, for Council's final consideration, 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. 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 public study session, council decisions on proposed policy issues, achieving: ✓ $525,928 to be added to the City's General Fund reserves. ✓ $390,000 to address illegal dumping and homelessness encampment code enforcement ✓ $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 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's fund balance Who participated? Staff participates year-round providing service delivery and managing within budget as unforeseen surprises occur. Staff input for each budget year is critical. 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 final decisions. Citizens had opportunity to speak at those study sessions and will also at the annual budget hearings. Property Tax and Sales Tax are the largest sources of revenue for the General Fund. When property owners thrive, property 3 FINANCE 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, Paojected Purposed (Decrease in) 2020 Ending. Fund Balance Revenues Expenditures Resettles Balance General Fund 0,400.153 S 60.600,424 S 6Q.173,4% S 523,023 S Q.035.213 377! , s Parksanl Recreatrort a:r;v22: 5,531.463 7,331.365 —. 377,322 Street t'r Traffic Operation 27,5413,61,430 3,661,4i50 — 27,341 General Goa-enunent Subtotal 0,514,04S 33,302,342 53,366,414 525,023 10,340,376 OthelGovernmental Operating Fluids 3,312902 14,1130 7 1.3,345,.44 270,543 6,033,535 Goaeratrrterrt Capital.Funds 13,444s*70 13,615,476 11000.223 ,625,13.3. 15,070037 Enterprise Operating Fonds 14,232,001 61,170401 62,433,=441 11263,230}.. 13,010,741 Enterprise Capital Funds .30,610,261 F3.000,106: 25,250,221 (12,241,121#•• 15,373140• Internal Service Funds 1,521,003 6,122,344 6,433,703 031,434) 1,180,A0 Employee Benefit Resewe I,635010 I6,430,664 16,360,110 120,345 4756,453 Risk Management Reserves 1,03;,623 5,037,370 3,042,016 (.5 G46). 1,052,377 Debt Service&Agency Funds 2,477,553 700,554 7,802,607 6357 2,4 ,415 Total: E 51,567,100 S 221,256,373: 5 232,543,243 S (i1,201,3651 S 70,273,323 2 of 3 MEMO-Council-2020 Budget 11-05-2019 4 FINANCE 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. Where dues your tax dollar go? )„ ,', 2018 Q e,Iapp.ty Propel.ty Tax Pees , ,,., ety of Yxkma, -Otte Sch tO strt, ittz2tzt 2 iz AA tFtzrzOtrit::, Z3074 :c.Jt 34,7" 2 02 3a34. 'i it 11471n a.. . Mat.. .:.>, z,_.,. , .z,.., '.. :'za .,,�...�."�"�". a• ''-. F,oa (mono G.-. `ocaia run�414 t yr { p W. r 2 'a> z;. B ON00d46G r LeuY Rate .,,Y 4. 3950 9930 36 Every year's budget must balance, necessarily, by statute. Projected revenues are always outpaced by projected expenditures, which forces difficult prioritizing and decision-making as a part of each budget process. The end result is a balanced budget at the end of a conversation that includes residents, citizens and taxpayers to deliver the services of highest priority. 3 of 3 MEMO-Council -2020 Budget 11-05-2019 2020 Budget Nov. 19, Public Hearing :r =ram , ��} Clear — Reliable — Trustworthy '..2:•------_ } 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 Nov. 5th and . t 3 . Adoption — Dec . 3rd 2020 Budget Process An increasingly well - managed city yr+tt y�• Y r±i , <g. hh clear — Reliable — Trustworthy %