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11/20/2012 07 2013 Revenue and Expenditure Budget Public Hearing - Set Date r BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: November 20, 2012 ITEM TITLE: Public Hearing on the proposed 2013 Revenue and Expenditure Budget for the City of Yakima SUBMITTED BY: City Manager and Finance Department CONTACT Tony O'Rourke, City Manager PERSON /TELEPHONE: Cindy Epperson, Director of Finance & Budget SUMMARY EXPLANATION: City management recently submitted the 2013 Preliminary Budget Summary and the related Initiatives to City Council and the public. This budget represents staffs projections of revenues and proposed expenditures for the coming year. The Preliminary Budget was first presented at a Study Session on October 23, 2012, in conjunction with the draft Strategic Plan. Subsequent to that, individual issues have been topics of study sessions for Council review and /or action, such as the proposed changes in the Downtown business improvement area including parking changes in the City lots, and the fire inspection program. The public has already commented on aspects of the budget at a few of these prior meetings. The purpose of the Public Hearing is to formally accept input, comments and /or questions from citizens and other affected parties regarding the proposed 2013 Budget including all program initiatives, proposed rate increases, and other related budget matters for 2013. The last step in the 2013 budget process will be for Council to adopt the final budget at a December meeting prior to year end. Resolution Ordinance Other Public Hearing (specify) Contract: Mail to: Contract Term: Amount: Expiration Date: Insurance Required? No Funding Phone: Source: APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Accept public testimony. No action on the budget required at this meeting. BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download •❑ Copy of Public Notice CITY OF YAKIMA NOTICE OF PUBLIC HEARING ON THE 2013 BUDGET NOTICE IS HEREBY GIVEN that the City Council of the City of Yakima will hold a public hearing on Tuesday, November 20, 2012, at 7:00 p.m., or soon thereafter, in the City Council Chambers at Yakima City Hall, 129 North 2nd Street, for the purpose of fixing the budget for the City of Yakima for the fiscal year 2013. Any taxpayer may appear at said meeting and be heard for or against any part of the budget. The preliminary budget executive summary of the City of Yakima, Washington, for the fiscal year 2013, is now on file in the office of the City Clerk and in the office of the Director of Finance and Budget of the City of Yakima. A copy of said preliminary budget will be furnished to any taxpayer who will contact either office in Yakima City Hall, 129 North 2nd Street, Yakima, Washington. DATED this 7 day of November, 2012. MICAH CAWLEY Mayor of the City of Yakima SONYA CLAAR TEE City Clerk CINDY EPPERSON Director of Finance and Budget CCLERK DD1 i v. Yi{ ` 2013 P 4 u Summag CITY OF Yakima 9 3 - WASHINGTON ...._ .14 , 1i1I I ::r NM i r • _...• , - 11. � , 2: d ul • si 4 ..e. !, .....*- —, ,,,, 1 ili. 1 — . i ' . 1° .. : ' - ‘.... . \ ' .. ♦ II' �a ss -1.-.. - nil .______ illiiillial _ ....r can 2'akima 2013 PRELIMINARY BUDGET SUMMARY TABLE OF CONTENTS SECTIONS PRELIMINARY BUDGET I. INTRODUCTION Transmittal Budget Summary H. GENERAL GOVERNMENT FUNDS Year in. Review Revenue Trends Expenditure Trends HL OTHER FUNDS BUDGET INITIATIVES IV GENERAL GOVE.R1VMENT BUDGET STRATEGY Y. STRATEGICINITL4TIVES EXHIBITS • Three- Year Budget Comparison > What You Pay and What You Get • Supplemental Information arva° `2a kama 2013 PRELIMINARY BUDGET SUMMARY Insurance & Risk $14254,316 Equipment Rental 64% $6,060,302 Police Courts, Fire 29 °% $44,.510197 Water &Irrigation 216 °% $17 244,621 8 4% City Administration $7 098,395 3 4% Comm &Tech & Wastewater Other Svcs $39,847938 $6,837.545 33% 194 °% Other Operating Funds $10,477905 51% Streets, Eng Plan &Codes Refuse N. $4091,819 30 °% $5,520,876 °r6 Transit Parks &Recreation 27 $4516,272 Debt Service $4,059,116 4 1% Stormwater $5,958,945 20 °r6 Capital $2,504,059 Corn &Econ 29 Improvement °% 12 °% $26,130,353 Development 72 7% $1,654,327 0 8 °% ($61 9 Million General Government) $205.8 MILLION Preface— 1 1 . CITY OF (Yakima STRATEGIC PRIORITIES Economic Development Public Safety Improve the Built Environment Public Trust and Accountability Partnership Development Adopted 2012 Preface— 3 INTRODUCTION: TRANSMITTAL oFY� OFFICE OF THE CITY MANAGER I 129 North Second Street City Hall, Yakima, Washington 98901 Phone (509) 575 -6040 MEMO TO: Honorable Mayor and Members of the Yakima City Council FROM: Tony O'Rourke, City Manager DATE: November 1, 2012 SUBJECT: City Manager's 2013 Preliminary Budget Summary I am pleased to submit for City Council review the 2013 Preliminary Budget. This budget is balanced, prudent, and responsive to the City Council's and community's strategic priorities and needs. Providing a balanced budget has proven to be a challenging task given the multitude of issues the City faces compounded by the most prolonged economic downturn since the Great Depression. The current recession continues to present a strong headwind, and the lethargic economic recovery only exacerbates the City's financial pressures. According to most economists, the economy's key bellwether, the Gross Domestic Product (GDP), is forecast to grow only 1% to 1.5% annually, which is too slow for a full economic recovery. Yakima's economy continues to lag behind the state and national economies. Our community is struggling with a 10% unemployment rate, while the state and national unemployment rates are 8.5% and 7.8 %, respectively. In addition, Yakima suffers from a 21% poverty rate compared to a national poverty rate of 15% and state rate of 11.5 %. Finally, public confidence in the local economy is weak, given 85% of the citizen survey respondents rated employment opportunities in Yakima as fair or poor. While our current fiscal challenges have been compounded by the broader economic downturn, the underlying problem the City faces is its projected expenses exceed its projected revenues if we continue to "stay the course," as identified in the Five -Year Financial Plan. Introduction • Section I - If we maintain the status quo, based on existing service levels and revenue streams, we will generate annual deficits ranging from $1.5 million to $4.0 million between 2013 and 2016. Based on the Five -Year Financial Plan, we are confronted with some difficult budget decisions now and in the near future. Simply stated, the City of Yakima must correct this projected financial misalignment and adapt to the "new normal" of living within our means. To that end, we must focus on permanent, long -term structural budget solutions to ensure current and future balanced budgets and financial sustainability The City has taken proactive steps to reduce overall costs, including the elimination of a total of 41 positions between 2008 and 2012, salary freezes, and furloughs. Unfortunately, more needs to be done. It is with this background and understanding we present the Preliminary 2013 Budget. BUDGET STRATEGY The development of the Preliminary 2013 Budget is based on the following core principles and priorities: • Advance the City Council's five (5) Strategic Plan Priorities • Economic Development • Public Safety • Built Environment • Public Trust and Accountability • Partnerships • No tax increases. • Live within our means. • Preserve core services. • Invest in preserving the City's core capital assets to extend their useful life. • Maintain 60 days or 16.6 °0 General Government Fund operating reserves. • Optimize the delivery of services. • Constrain personnel salary and benefit cos • Make budget decisions that eliminate future projected deficits and ensure a balanced budget in future years. PRELIMINARY 2013 BUDGET The proposed Preliminary 2013 City Budget, including all funds, is balanced. The Fiscal Year 2013 expenditure budget is $205.8 million and represents a $28.4 million or 16.0 °0 increase over the projected 2012 year -end expenditures. The $28.4 million increase in the proposed 2013 budget is driven by a $27 million increase in capital projec including the Martin Luther Ding, Jr. underpass ($12.1 million), road improvements ($5 million), sewer industrial line and meter improvements ($3.7 million), and water and wastewater system improvements of over $11 million. Most of these capital improvements are funded by grants and utility enterprise revenues and reserves. The expenditure budget of $205.8 million is supported by revenue of $200.2 million, and $5.6 million of non - General Government reserves (i.e. enterprise and capital). At the end of 2013, citywide reserve levels are projected to be $49.8 million. 2 — Section I • Introduction The Preliminary 2013 General Government fund expenditure budget, which represents most core City services, is balanced at $61.9 million and represents a $1.4 million or 2.4 °° increase over the 2012 year -end projected expenditure budget. The revenue budget is $61.9 million and represents a $1.4 million or 2.4 °° increase over the projected 2012 year -end revenues. General Government operating reserves will not be used to balance the budget. The major elements of the $1.4 million increase in the 2013 General Government Fund expenses are: • Yakima Police Patrolman's Association (YPPA) labor contract settlement $614,000 • International Association of Firefighter's (IAFF) labor contract settlement $385,000 • Medical Plan rate increases $600,000 The General Government budget revenues are based on the following: • Proposed 1°° increase in property taxes plus an estimate of 0.75 °0 new construction. • Modest growth of 1.5 °° in sales tax. • Utility tax increase of 3.6 °° averaged over all utilities. Components include: • Full year of the 6 °0 rate increase authorized in the 2012 budget for public safety — because of timing of implementation, 2012 revenues include about 11 months. • General utility rate changes. BALANCING STRATEGY We have balanced the 2013 General Government Fund budget using the following strategies: • Instituting a 2 °0 vacancy rate. Personnel costs are budgeted at 98 °° to account for a minimum 2 °0 position turnover /vacancy — Savings: $730,000. • Projected wage and benefit concessions from represented and unrepresented employees, subject to collective bargaining and negotiations — Savings. $304,000 (general government). Note: The 2013 preliminary budget was built assuming a negotiated reduction of benefits of $30.4,000. Negotiations are currently in progress, however at this point in time, it does not appear that there are any concessions forthcoming in time to be implemented in 2013. Therefore, for the final budget, there will be five (5) additional personnel attrition /reductions to make up the required $30.4,000. • Attrition /vacancy of three (3) positions — Savings: $163,000 • Administrative Assistant — Community Development • Department Assistant II in Public Works • Delay refill of Information Technology position • Airport fire service will be modified by transferring three (3) firefighters staffing the Airport Rescue Fire Fighting (ARFF) apparatus at the Yakima Airport to three vacant fire station positions, thereby filling three existing vacancies. The ARFF will be covered on an overtime or part -time basis to meet FAA standards, instead of with full time staffing — Savings: $220,000. KEY POLICY ON STRATEGIC PLAN DECISIONS Despite the economic hurdles we face, the City must continue to invest in its core strategic priorities. To that end, the following new initiatives are proposed for funding to address and advance the City Council's five strategic priorities. Introduction • Section 1 - PUBLIC SAFETY STRATEGY a. Expand Police Gang Unit — Given the public's significant public safety and security concerns as represented in the 2012 Yakima Citizen Survey results, we propose creating a second gang unit of five (5) police officers. Instead of incurring the cost of five new officers, we propose transferring two officers from the Community Relations Unit and back filling those positions with civilian community service officers at a cost of $118,000. In addition, we will transfer an existing patrol officer to the new Gang Unit as well as hire two new police officers, with annualized costs of $200,000. The 2013 budget includes $118,000 representing a phased hiring process. The total cost for expanding the Gang Unit is $328,000. This is less expensive than hiring five new police officers and allows us to operationalize the second gang unit once the two civilian community service officers are hired. b Indigent Defense — As the City Council is aware, the Washington Supreme Court has imposed a new caseload limit for attorney's providing public defense for misdemeanor cases. The new caseload limit is 300 cases per year if based on a new case weighting system and 400 cases per year if no case weighting system is used. By comparison, our current City Prosecutors are averaging a 1,500 annual caseload. The full cost impact of the Supreme Court decision will take effect in mid -2013. The City currently contracts for five (5) fulltime public defenders at an annual cost of $475,000 to meet indigent defense needs. To comply with the Supreme Court's new standards, the City will need to secure 7.5 additional fulltime defense attorneys at an incremental annual cost of approximately $700,000. Combined, this would represent an indigent defense annual cost of $1,175,000. If a jurisdiction chooses to utilize a weighting system, some cases will be weighted at values less than or more than an average case. More complex misdemeanor cases, such as domestic violence or DUI, are weighted higher due to their complexity These types of cases constitute a large portion of the City of Yakima's filings. Many jurisdictions have chosen to pursue the case weighted system. Due to the City's heavy DUI and domestic violence caseload, case weighting is not our best option. Accordingly, the annual caseload for a public defender cannot exceed 400. To reduce the cost impacts of the Supreme Court decisions on indigent defense, the City intends to employ a Pre - Filing Diversion program and a Prosecution Charging Unit. These two initiatives will reduce the current misdemeanor caseload of 5,100 annually by almost 40 °°, to 3,200. By employing these two initiatives, the City's Prosecuting staff will need to be increased by one (1) attorney at a cost of $115,000. However, the number of full -time defense attorneys can be reduced from 7.5 to 3.5. The cost of these additional indigent defense services will be $347,500 in 2013. The total annual cost of meeting the Supreme Court indigent defense mandate is $462,500. 4— Section I • Introduction c. Commercial Fire Code Inspectors — This budget includes two (2) Fire Code Inspectors to reinstate the City's inspection of our 4,000 commercial buildings with the objective to reduce fire code violations and fires in the community This initiative will cost $165,000 but will be largely offset by inspection fee revenue. d. Fire Apparatus Purchase — To ensure the timely replacement of Fire department equipment, we propose lease purchase of a fire engine at a cost of $40,000 annually for the next ten years. e. Additional Police Officer —To ensure greater coordination and cooperation with Yakima County, State, and U.S. Marshall law enforcement agencies, one new police position will be needed to serve on the Violent Offenders Task Force. The 2013 cost for the position is $20,000, and the annualized cost in the future is $97,500. ECONOMIC DEVELOPMENT STRATEGY a. Economic Development Manager — In the interest of increasing the City's role in aggressively pursuing economic development opportunities to create a stronger job market and tax base, the City Council in September 2012 agreed to fund an Economic Development Manager position. The annual cost of this new position is $122,500. The primary focus of this new position, led by recently hired Sean Hawkins, will be to foster growth and enhancement of the downtown, the Cascade Mill Site, and the Yakima Airport. b Special Events — A major impediment to downtown prosperity is the public's perception of crime and parking access in downtown. The Police Department will institute bike and foot patrols in downtown to enhance public safety Additionally, the City Council has agreed to expand free parking from two hours to four hours during the day In addition to these measures, we must attract residents and guests downtown through more special events and activities. The downtown needs more energy and animation to create a more vibrant and robust destination for residents and gues We propose budgeting $100,000 to host more City sponsored events and elevate the quantity and quality of events in downtown during 2013. c. Airport Commercial Service — In the interest of expanding the City's current airport commercial service, this budget includes half the funds ($30,000) to retain a commercial air service consultant. The balance of the funds is proposed to be supplied by Yakima County BUILT ENVIRONMENT STRATEGY a. Infrastructure Investment — The City currently has a significant backlog of capital needs. The City's 802 lane miles have an average Pavement Condition Index (PCI) score of 54. Based on a 100 -point scale, the City's PCI is far below average. The City must focus on an asset management and preservation program for existing City streets to extend their useful life and reduce future replacement costs. Unfortunately, the City does not have adequate capital reserves for the renovation and replacement of its $600 million road system. To address this problem, I would propose initiating a $5 million bond program in 2013 to improve our roads and begin the process of reducing our road rehabilitation backlog and improving our Pavement Condition Index. The 2013 road improvement initiative should Introduction • Section I -5 focus on arterial and collector streets throughout the City Rehabilitation techniques should focus on grind and overlay, with additional full depth reconstruction, chip seal and core seal. These road improvements will extend the useful life span of 28 miles of our roads by an average of 7 to 30 years. The annual debt service on a $5 million bond is approximately $350,000. To continue to fund the City's road improvement backlog, I would recommend the City Council place the car tab fee measure on a 2013 election ballot for public consideration. The 2012 Yakima Citizen Survey indicated a 50 °0 level of support for a car tab fee. The car tab revenue should be dedicated exclusively to capital improvements. A $20 car tab would generate $1 million annually, while a $40 car tab would generate $2 million annually If successful, the Council could either use the dedicated funds on a "pay -as- you -go" capital improvement program or leverage the annual funds to issue a $12 million to $25 million bond to frontload improvements. The Council may also want to consider sunsetting the car tab fee after 5 or 10 years and require future public reauthorization of the car tab fee. b Graffiti Abatement — The Citizen Survey underscored the public's dissatisfaction with the overall appearance of Yakima, given 71 °0 rated it fair or poor. To improve that rating, the City proposes to initiate neighborhood -based cleanups as well as implement aggressive eradication of graffiti. To assist in our graffiti abatement efforts, there will be a Volunteer Coordinator at a cost of $15,000. The Volunteer Coordinator will organize and assist community volunteers in cleaning up graffiti sites soon after they are reported in order to diminish the visual blight graffiti creates. FUND BALANCE OPERATING RESERVE The General Government Operating Reserve is at $9,941,466 or 16.1 °0 of annual expenditures which is close to our desired 16.6 °0 or 60 days of working capital standard. This level of operating reserves is sufficient to meet unforeseen, one -time expenditures of an emergency nature, such as a natural disaster, catastrophic occurrence, or excessive liability judgment. LONG RANGE FINANCIAL PLAN Although the 2013 Budget adopts the City's financial plan for one year, it is important that the City Council make the Annual Budget decisions in the context of the City's long -range financial plan. The City Council reviewed the City's Five -Year Financial Plan in September 2012 and is cognizant of the economic challenges of recent and projected revenue stagnation and the continued escalation of costs. Of particular concern is our health plan, which this year alone will increase by $1 million or 13.7 °0. As you know, the Five -Year Financial Plan projects deficits of $2.5 to $4.0 million between 2014 and 2016. Given this, the annual budget must be framed and acted upon based on these long - range trends. We must continue to constrain our operating costs to live within our nominal revenue growth. Upon the adoption of the budget by City Council, we will update the projections of the Five Year Financial Plan for the next four years and review those with the City Council in January 2013. 6 — Section I • Introduction CONCLUSION This budget addresses the City's highest strategic priorities and capital needs for 2013 and will allow us to achieve our key goals. It also puts in place a financing plan that supports our efforts for continued financial stability and sustainability in future years. In presenting the budget to the City Council, I would like to acknowledge and express appreciation to the City Leadership Team and staff for their willingness to submit realistic budget requests and develop alternatives to meet the Council's priorities. I would also like to recognize the Finance Department for its assistance in preparing this budget and its more streamlined but comprehensive presentation. Finally, I would like to thank the City Council for its leadership in adopting the Strategic Plan and Five -Year Financial Plan which have served as the foundation for this proposed 2013 budget and its commitment to move the City forward toward a brighter and a more sustainable future. Sincerely, Tony O'Rourke City Manager Introduction • Section I — 7 INTRODUCTION: BUDGET SUMMARY This Budget Summary Section provides a high -level overview of the 2012 year -end forecast and the preliminary 2013 budget, along with significant issues that have affected the City's fiscal position in the past year and /or anticipated to have a material impact in 2013. 2012 YEAR END ESTIMATE VS. 2013 BUDGET OVERVIEW The charts below show in summary format how the 2012 year -end budget estimate compares to the 2013 budget. 2012 VS. 2013 EXPENDITURE BUDGET COMPARISON 2012 12 vs. 13 Year -End 2013 Budget Fund Estimate Budget °° Change General $51,327,216 $52,435,159 2.2°0 Parks 3,970,318 4,059,116 2.2°0 Streets & Traffic 5,194,342 5,421,180 4.4 General Government TotaP $60,491,876 $61,915,455 2.4 Utilities /Other Operating 65,546,479 64,1:8,115 (2.1 °0) Capital Improvement 27,017,241 54,834,157 103.0° Contingency/Risk Management 3,036,404 3,761,305 23.9 Employee Benefit Reserves 14,094,451 14,601,809 3.6 General Obligation Bond Debt Svc 3,520,336 3,831,384 8.8 Utility Revenue Bond Debt Service 3,181,214 2,127,561 (33.1 °0) Trust and Agency Funds 503,225 517,200 2.8 Total - Citywide Budget' $177,391,226 $205,766,986 16.0 (1) The 2013 General Government expenditure budget is approximately $1.4 million or 2.4 °0 above the 2012 year- end estimate budget. (2) The City wide expenditure budget is approximately $2841 million or 16.0 °0 above the 2012 year -end estimated budget. 8— Section I • Introduction 2013 EXPENDITURE BUDGET BY FUND ($205 8 MILLION) Utility Revenue Employee Trust and Benefit Bond Agency Reserves Debt Svc Funds Contingency/ $14 6 $21 $0 5 Risk 71% 0 0 ° 02% Management General $3 8 $52 4 1 9% 25 5% Capital Improvement $54 8 Parks 26 6% $41 20% Street & Traffic $5 4 26% General Obligation Utilities /Other Bond Debt Svc Operating $3 8 $64 2 1 9% 312% 2013 REVENUE BUDGET BY FUND ($200 2 MILLION) Utility Revenue Trust and Employee Bond Benefit Debt Svc Agency Contingency/ Reserves Funds $2 5 Risk $14 6 $0 5 Management 7 3% 1 2% 0 3% $3 6 General 18% $524 26 2% Capital Improvement $48 5 24 2% Parks $4 1 20% Street & Traffic $5 4 27% General Obligation Utilities /Other Bond Debt Svc Operating $3 8 $64 8 1 9% 32 4% Introduction • Section 1— 9 The proposed 2013 total city -wide expenditure budget of $205.8 million is balanced within existing resources and reflects an increase of $28.4 million from the 2012 year -end estimate of $177 4 million. The 2013 General Government budget of $61.9 million is approximately $1.4 million more than the 2012 year -end estimate of $60.5 million. The General Government budget consists of three separate Funds: the General Fund, the Parks Fund and the Streets and Traffic Fund. Over 70 °° of these tax supported budgets are devoted to public safety services in the 2013 budget; this includes Police, Fire, Courts and support to these departments from the Technology Services, Finance, Legal, and Human Resources divisions, along with code enforcement, animal control, street lighting, traffic control, and snow and ice removal activities. 5 -YEAR FINANCIAL PLAN This summer, the City Council was presented with a preliminary 5 -year financial forecast that was based on existing revenue streams and city services. Those projections were based on an assumption of continuing business as usual — with our current structure, services, operating practices, etc. That report provided a look at the financial consequences of maintaining the status quo, which were annual deficits ranging from $1.5 to $4.0 million between FY 2013 and FY 2016. On August 21st, the official 5 -year financial plan was adopted by the City Council. This was the next step in looking at long -term strategies to balance the General Government (i.e. tax- supported funds, which include General; Streets and Traffic Engineering; and Parks and Recreation) budgets. The Five -Year Financial Plan was designed to focus on the City's General Government given these are core to the City's ability to provide essential services and capital improvements As time goes on, this plan is to be monitored, as economic/business conditions will likely be different from preliminary estimates. Any significant changes in assumptions will require future modifications to the plan. The 5 -Year Financial Plan was meant to assist the City Council in meeting the following key goals: . Ensuring a financially sustainable future. . Preservation of the City's core services. . Commitment to funding infrastructure; facilities and rolling stock. . Addressing Strategic Plan priorities. Revenue Forecast The revenue forecast represents an analysis of the economic factors driving the City's revenue base and specific revenue sources available to the City The City's core General Government revenues are increasingly affected by the economy The financial plan revenue projections reflect various assumptions about the future economic environment based on national, state and local economic forecasts. Over the next five years, the average annual increase in General Government revenue is projected to be 1.3 °°. 10— Section I • Introduction Expenditure Growth The primary costs of the General Government expenditures are for salaries and wages, and personnel benefits, which combined comprises the majority of the General Government expenditure budget. Over the next five years, the average annual increase in General Government expenditure will be 2.8%. Bottom line The following chart summarizes the budget gap identified in the 5 -year Financial Plan. 2012 2013 2014 2015 2016 General Fund (Millions) Forecast Forecast Forecast Forecast Forecast Revenues $59.S $60.6 $61.2 $62.0 $62.9 Expenditures $59.S $62.1 $63.S $65.3 $66.S Net $0.0 ($1.5) ($2.5) ($3.3) ($4.0) Budget Alternatives Based on the results of the preliminary Five -Year Financial Forecast, the City must develop a longer -term strategy for dealing with both the current and future budget reality The following were the proposals to City Council to help bring the next several budgets into balance. Reorganization Plan — Certain areas in the organization were being underserved and needed additional resources allocated to them to better accomplish the City's strategic priorities. Wage and Benefit Concessions — As bargaining units negotiate wages and benefits, the City will be asking for zero cost -of- living wage growth and benefit concessions. This plan assumes termination of the City's deferred compensation benefits program, with a current cost of $1.5 million annually, subject to collective bargaining negotiation. Airport Fire Service — The City has fully staffed the Aircraft Rescue Fire Fighting (ARFF) apparatus at the Yakima Air Terminal without any reimbursement from airport operations. The Fire Department is proposing to staff mandated coverage on overtime, instead of full time staffing. 2 °0 Vacancy Rate — By instituting a 2 °0 personnel vacancy rate in General Government, the City can avoid budgeting about $800,000 in 2013, and up to $1 million in 2016. Health Care Costs — The City is working with the self - insured broker, the Health Benefit board and collective bargaining units to look at benefit design and health care delivery options to lower the steep increase projected in health care costs. Reductions starting in 2013 have been identified, which will be maintained in the Health Benefit fund, as that reserve balance is below required levels. Managed Competition — Departments have been tasked with identifying operations that can be subject to managed competition. This will be pursued on a regular basis. Introduction • Section I-11 . Attrition /Service Reductions — Vacant positions will be critically examined to determine if and when they should be replaced. . Capital Improvements — Council has been studying the need for a stable funding source for major street maintenance and improvements. Two viable revenue options have been discussed in the past few months at various study sessions and public meetings. • Metropolitan Parks District (MPD) — Should the MPD go forward as a funding option for Parks and Recreation, the City would also have an opportunity to use resources currently allocated for that function to street improvements. • Car Tab Fee — The Transportation Benefit District can establish an annual car tab fee of $20 per vehicle. Conclusion Although the City of Yakima is slowly coming out of the worst economic recession in recent history, the Five Year Financial Plan represents a prudent and balanced strategy for meeting its fiscal challenges. The strategy reflected in the Five Year Financial Plan allows the City to eliminate projected budget gaps, and make critical investments in its street infrastructure. Moreover, the strategy will allow the City to continue to provide essential, outstanding cost effective service and capital improvements to our residents and businesses. 2013 BUDGET ADJUSTMENTS General Government Budget Reductions As the 2013 budget was developed, all revenue estimates were reviewed and updated for more recent trends, and known changes were incorporated in the expenditure budget. After all known changes were made, the General Government budget was still out of balance by about $1.4 million. At that point the balancing strategies as outlined in the Five Year Financial Plan were implemented. The following is a summary of the original plan, compared to the elements that were incorporated into the 2013 budget. 12— Section l • Introduction GENERAL GOVERNMENT BUDGET REDUCTIONS 2013 Preliminary Forecast Budget Original 5 -Tear Plan Bridget Gap ($1,500,000) ($1,41:,000) Expenditure Options W age Sr Benefit Concessions 300,000 304,000 Airport Fire Service (AARF) 200,000 220,000 2 Vacancy Rate 800,000 730,000 Attrition /service reduction 200,000 163,000 Net Bridget 1,500,000 1,417,000 Detail of Reductions to Balance W age and Benefit Concessions - Deferred Compensation Non - represented and AFSCME (304,000) 3 Vacant Firefighter Positions Eliminated Airport Rescue vehicle staffed by Overtime (220,000) Attrition /Service Reductions (Vacant) Administrative Assistant - Community- Development (:5,000) DA 11 Public Works (Reduces PW Admin Charges) (45,000) information Technology Position (Keep Vacant 6 months) (40,000) Vacancy Rate-ro of Gen Gov salary and benefits, w /out Med or Dental (730,000) Total Bridget Balancing ($1,41:,000) General Government Program Changes In response to a citizen survey, City Council had a retreat to review the survey results and align its strategic priorities to better address the community's needs. The following chart is a summary of programmatic changes included in the 2012 budget, and the strategic priority being addressed by each initiative. Introduction • Section I — 13 GENERAL GOVERNMENT STRATEGIC INITIATIVES Description Increase Notes Priority City Manager Airport - Consulting Fee $30,000 Intergovernmental PA Olympia/Washington Lobbyist 50,000 City Council Bridget PA 50,000 Legal (Indigent Defense:) Increase Indigent Defense Contract 347,500 State Mandated PS Add One Prosecutor Sr Temporary Hours 115,000 State Mandated PS 462,500 Municipal Court Reinstate Municipal Court Cashier 54,000 Improved Customer Service PT Community Development Dangerous Building Abatement 15,000 BE/PS Graffiti Abatement - Volunteer Coordinator 15,000 Temporary Position BE/PS 30,000 Economic Development Dept Economic Development Manager $122,500 Approved by Council ED Support costs (i.e. phone, training, etc.) 7,500 ED Special Events - Downtown focus 100,000 ED 230,000 Police Gang Unit Enhancement 118,000 2 Civilians Start 4 /1/13 PS/PT 2 Police Officers Start 10/1/13 Dispatch - Public Safety Communications 50,000 Additional Interfund Transfer PS (9 -1 -1 funding for dispatch reduced - see 9 -1 -1 Call Taker) 195,000 Fire Purchase Fire Apparatus ($3:5,000) 40,000 Annual Debt Service - 10 yrs PS 2 Fire Code Inspectors /Supplies 165,000 Supported by New Fee PS 205,000 Streets Sr Traffic Engineering Reinstate Vehicle Replacement to '11 Levels 100,000 From $150,000 to $250,000 BE $5.Om Councilmanic Bond Issue 300,000 Annual Debt Service (Est) - 10 yrs BE/PT 400,000 Total General Gov. Program Changes $1,659,500 Strategic Priority Legend Economic Development ED Public Trust and Accountability PT Public Safety PS Partnerships PA Built Environment BE 14— Section I • Introduction Other Fund Changes Most of the other funds are continuing their specific missions without major changes. The following is a summary of strategic initiatives in the other operating and utility funds. OTHER FUND STRATEGIC INITIATIVES Description Inc /(Dec) Notes Priority Utility Project Coordinator $67,000 W W, Water, Irrigation, Gen Fund BE /PT Director of Engineering Sr Utilities 140,000 W W, Water, Irrigation, Gen Fund BE /PT Housing Specialist (50,000) Attrition Reduction /Federal Grant PT/ED Reduction Reconfigure Franklin Park parking lot 150,000 REET 1 BE /ED Community Relations Bldg Purchase f /Fire 316,250 Transfer from Fund 125 to Fire PS Capital Fund DA 11- Transit 27,000 Add .50 FTE PT/ED Asset Management Software System 200,000 W W Fund Capital (+ $100k in '14) PT/ED W ater /Irrigation Admin (53,000) Attrition Reduction PT 2 9 -1 -1 Call takers 125,000 Frees up Dispatch Function PS Water Service Specialist (60,000) Attrition Reduction PT $862,250 Strategic Priority Legend Economic Development ED Public Trust and Accountability PT Public Safety PS Partnerships PA Built Environment BE PRELIMINARY BUDGET The 2013 Preliminary Budget broken down by Department, as reflected in the following chart, provides a clear picture of the resource requirements of each functional area within the City and how each area compares both to each other and to the total General Government budget of the City — in dollars and staffing levels. Introduction • Section I — 15 2013 GENERAL GOVERNMENT PRELIMINARY BUDGET (By Department) 2012 Dollars in Millions % of Forecast -1 1 3 5 7 9 11 13 15 17 19 21 23 25 Total Organizational Unit Budget p Budget Police $25,300,519 I 40 9% Fire 9,848,295 — 15 9% Streets & Traffic Oper 5,421,180 r—i 8 8% Parks 4,059,115 r 6 6% Transfers 2,477,275 C I 4 0% Information Systems 2,310,463 I I I 3 7% Financial Services 1,456,531 ❑ 2 3% Municipal Court 1,387,541 DI 2 2% Utility Services 1,301,697 ❑ ■ Personnel 2 1% Police Pension 1,297,225 ❑ 2 1% Code Administration 1,279,417 ❑ U Non-Personnel 2 1% Legal 1,258,965 DI 2 0% Indigent Defense 833,500 ❑ 1 3% Engineering 670,639 ❑ 1 1% Planning 614,033 I 1 0% Purchasing 529,702 0 0 8% Records 484,404 m 0 8% Human Resources 449,046 0 0 7% City Manager 363,799 U 0 6% City Hall Maintenance 360,225 Q 0 6% Intergovernmental 291,549 0 0 5% City Council 284,751 I 0 5% Economic Development 229,585 I 0 4% State Examiner 110,000 I 0 2% Hearings Examiner 26,000 I 0 0% 2% Vacancy Rate ($730,000) ® (1 2 %) Total $61,915,456 100 0% The Police Department consumes 40.9% of the $61.9 million General Government budget, while the Fire Department consumes another 15 9% No other single Department utilizes more than 8 8% of the total General Government budget The Streets & Traffic Department budget (8 8 %) and the Parks and Recreation Department budget (6.6 %) come in a distant 3rd and 4th place for the utilization of available resources. This has been the relative utilization of General Government resources for many years, and continues to reflect the Council's strategic priorities for the coming year 16 — Section I • Introduction Projected Ending Cash Balance (Reserve) General Government resources consist of annual revenues and cash reserves (fund balances). Prudent fiscal management dictates that adequate reserves be maintained to help ensure the City is prepared to meet any number of unbudgeted and / or unforeseen circumstances that may arise, without requiring major disruptions to normal business operations. Reserves are typically utilized for many different business purposes, including: provide for emergencies; cover temporary cash flow needs; take advantage of one -time, unanticipated opportunities; provide grant matching funds; cover revenue shortfalls; and accommodate unforeseen expenditures and other contingencies. 2013 GENERAL GOVERNMENT PROJECTED REVENUES, EXPENDITURES AND CASH BALANCES 2013 2013 2013 2013 2013 2013 Exp Estimated Estimated End Bal Projected Proposed as °° of Beginning Ending as °° of Revenue Expenditures Diff Rev Balance Balance Exp General Fund $52,435,635 $52,435,159 $476 0.0 $8,483,190 $8,483,666 16.2 Parks &Recreation 4,058,765 4,059,115 (350) 0.0 363,235 $362,885 8.9 Street &Traffic Fund 5,418,260 5,421,180 (2,920) 0.1 1,097,836 $1,094,916 20.2 Total General Government $61,912,660 $61,915,454 ($2,794) 0.0 $9,944,260 $9,941,466 16.1 The 2013 General Government preliminary budget is balanced with minimal use of reserves and the ending reserve balance is projected to be 16.1 °0. Fund Balance Change The Governmental Accounting Standards Board (GASB) is the organization that sets accounting and financial reporting rules for governments. In recent years, the GASB has issued several proclamations that have had an effect on our financial statement presentation. Several years ago, GASB Statement 33 gave direction on reporting "derived tax revenues ", which addressed the timing of recognizing revenue of assessments on exchange transactions, such as sales tax or utility tax. In general, this new rule stated that revenue should be recognized when the underlying transaction takes place — i.e. when the sale is done. Because there is a 2 month lag in sales tax collected by the City, and a 1 month lag in utility tax collection, the City added 2 months of sales tax and 1 month of utility tax in the year of implementation in the Comprehensive Annual Financial Report (CAFR). However, because there was no change in the underlying economic condition of the City, just the timing of revenue recognition, we conservatively maintained budgeted fund balances at the pre -GASB 33 levels. This resulted in the General Fund balance reported in the CAFR being about $4 million more than the budgeted fund balance. In the City Manager's presentation on the preliminary Business Plan in August, 2012, he pointed out that the Government Finance Officers Association has a "best practice" of maintaining at least a 2 -month reserve of the expected expenditures or revenues. This recommendation presumes that the additional revenue from the accounting change described above is included in the fund balance calculation. Therefore, we have added the additional accrued revenue into the budget system for Introduction • Section I — 17 both 2012 year end estimate and 2013 budget, in the General Fund and all other funds that have "derived tax revenues ", such as gas tax and hotel /motel tax A more recent pronouncement, GASB 54, addressed the designation of the level of restriction on fund balances It specifically directs that general contingency funds cannot be presented in the Financial Statements as a separate fund. Therefore, we are proposing that the Contingency Fund be discontinued as an active fund, and the fund balance of about $240,000 be moved into General Fund (The Contingency Fund balance was built by transfers from General Fund) After these two changes, the General Fund projected fund balance at the end of 2013 is $9 9 million or 16.1% of the budgeted expenditures, which is slightly below the recommended "best practice" of 16 6% Cash reserves are an integral and critical component of responsible fiscal management and business planning Standard and Poor's, a national rating agency, included two references to the City's general fund reserves in explaining the City's credit strengths that influenced their most recent (August 2009) reconfirmation of the City's "A +" credit rating. Standard and Poor's stated in their report that the City has a "track record of very strong general fund balances and good financial policies and practices, including a minimum general fund balance threshold and the use of a financial forecasting model" The following chart reflects several key aspects of the City's General Government fiscal condition. GENERAL GOVERNMENT FUNDS RESERVES USAGE AND BALANCE COMPARISONS (1) (2) (3) (4) (5) 2012 2012 2013 2011 Amended Year -End Preliminary Variance Actual Budget Estimate Budget (4 -2) Beg Reserve Balance $5,954,903 $5,612,257 $9,948,220 $9,944,260 Revenue 57,622,494 59,574,685 60,487,917 61,912,660 Total Resources 63,577,397 65,186,942 70,436,137 71,856,920 6,669,978 Expenditure Budget $57,658,071 $60,740,391 $60,491,876 $61,915,453 1,175,062 End Reserve Balance 5,919,327 4,446,551 9,944,260 9,941,467 % of Annual Expenditures 10 3% 7 3% 16 4% 16 1% Inc/(Dec) in Reserves fl Prior Year ($35,577) (1,165,706) ($3,960) ($2,793) % of Expenditure Budget (0 1 %) (1 9 %) (0 0 %) (0 0 %) Revenues ➢ 2013 projected revenues reflect an increase from the 2012 year -end estimate of 2 3% 18 — Section I • Introduction Expenditures • The 2012 year -end expenditures are projected to be $0.2 million less than the Amended budget. • The 2013 proposed expenditure budget is $1.4 million more than the 2012 year -end estimate and $1.2 million more than the 2012 authorized expenditure level. Reserves • A comparison of the 2011 beginning and ending reserve balances reflects a minimal use of reserves during that year (from approximately $6.0 to $5.9 million). • 2012 year -end projections indicate virtually no utilization of reserves during 2012. • The 2013 budgeted year -end reserve level is approx. 16.1 °0, this is within the reserve guidelines, as noted previously, and expenditures virtually equal revenues. 2013 GENERAL GOVERNMENT BUDGET — HIGHLIGHTS For four years now, staff has been closely monitoring the financial crisis and economic recession that has gripped our entire nation, our State and our local economy Staff has prepared, and updated, 2012 and 2013 revenue projections for the City based on the economic condition of our region. General Government revenues had been flat for the previous 4 years (hovering between $57 4 and $57.6 million from 2008 through 2011), but are now starting to marginally increase. Most of the revenue increase from 2011 actual to the 2012 estimate is the result of City Council's increase of the Water, Wastewater, Refuse and Stormwater utility tax by 6 °o- -this accounts for about $2 million of the $2.9 million increase. This new revenue was earmarked specifically for Public Safety, and is supporting 12 Police Officers, a Firefighter, and other public safety support. Unfortunately, costs of providing the same level of service had also increased over these 4 years, causing an erosion of service levels during that time frame. • From 2008 through 2012, a total of 41 positions have been eliminated in order to balance the budget within available resources. • The 2013 budget returns a net of 6.75 positions to the budget, to address citizen concerns and the City Council's strategic priorities. Cost containment and efficiency improvements continue to be a strong focus and an emphasis in every expenditure decision. Taxes Management has included no new taxes in the proposed 2013 Preliminary Budget. • Sales Tax — The General Government budget includes revenue projections that reflect a 1.5°° increase in sales tax revenues from 2012 to 2013. Through the 9 months ended September 30, the year to date sales tax is 5°° over the prior year. • Property Tax — The 2013 budget is based on a 1°° increase in the property tax levy or about $164,000, as currently allowed by state law, plus a 0.75 °0 increase or $123,000 for new construction for a total increase of $286,000. Brtroduction • Section 1 -19 Budget Reductions /Personnel Changes Since revenues have been "flat ", with minimal growth expected in 2012 and 2013, and the cost of doing business continues to grow, significant budget / service reductions and /or eliminations were necessary in order to balance the 2012 and 2013 budgets within available resources and maintain a minimum reserve level. The City has a budget freeze on salary and wages (0 °0 increase) for all non -union employees for 2013 and is proposing the same to the labor unions except those that are settled going into next year. Management has also challenged employees to reduce costs in accordance with the Five Year Financial Plan, to reach sustainable levels of service. The City is in various stages of negotiations with all other bargaining units. Note: this represents the fifth salary and wage freeze over the past seven years (2007, 2010, 2011, 2012 and 2013) for non union employees. NON - GENERAL GOVERNMENT FUND SUMMARY The following chart depicts a summary of resources and expenditures for major operating and Utility fund operations for 2013, including contingency, operating reserve funds and employee benefit funds. Although Equipment Rental is included on the table above, it is split into an operating component and capital component for charting operating vs. capital budgets. 2013 OPERATING AND RESERVE FUNDS Dollar In Millions 2013 0 2 4 6 8 10 12 14 16 18 20 22 24 Division Projected Reserves, Risk Mgmt, Emp Benefits $18,368,614 Cap Theatre, Cemetery, Trust Rsys $24,437,761 Reserves,Chax,es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . W astetvater $19,392,938 $21,520,651 SewerRates .•rating Reserves W ater/lrrigation $9,981,317 $12,677,826 IMMINIMMINIMMINIMMI Water Rates, Irrigation Fees, Resen-es Transit $7,970,772 .....: .......: $9,592,778 Transit Sales Ta <, Oper Grants, Fare Buy Refuse $5,520,876 $6,004,090 - Refuse Rates Equipment Rental $3,856,657 0 Expenditures .......... $3,885,625 ME Charges 0Resources Storm Water $2,069,059 F $2,998,442 Sturmtrater Fees Special Purpose, Housing, Emer Svs $13,887,501 Public W ks Admin, Cable TV, Misc $17,523,370 Total Expenditures $81,047,734 Total Resources $98,640,543 20— Section I • Introduction The following describes the relationship of resources and expenditures for major capital budgets of the City, including debt service and the capital portion of the Equipment Rental Fund. 2013 CAPITAL AND DEBT SERVICE FUNDS Dollars in Millions 2013 Division Projected 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 Streets $23,170,847 ........ ......... ......... ......... ......... $25,258,022 Reserves, Grants, .5 Gas Ta REET, Bonds W astewater $22,028,357 $27,856,541 ...................... ...................:::::::.Rese rve s Char :.eS:::::::::................ W ater/lrriga tion $:,822,505 $12,539,96: Reserves, Charges,Loans Transit $545,500 $1,696,129 u Reserves, Taxes, Grants 0 Total Expenditures Equipment Rental $2,010,695 ❑ Tutal Resuurces $6,290,769 _" Reserves, Charges Storm W ater $435,000 $ 1 , 273 , 913 DIE Reserves, Charges Sp Purp Cap, Misc G.O. Debt $6,790,891 ................... $9,84:,88: 1111, Reserves, Grants, Taxes, Loans Total Expenditures $62,803,798 Total Resources $85,063,228 CHANGES IN FUNDING AUTHORIZATION Due to a mid -year reorganization approved by Council, 5.0 FTEs were added, and with the changes occurring in the Finance Department, the layoff of a filled position was cancelled. Refer to the following chart for more information regarding these staffing changes. 2012 MID -YEAR GENERAL GOVERNMENT BUDGET POSITION ADJUSTMENTS Base Fund /Department Description Chg # Benefits Remarks City Manager Economic Development Add 1.00 $122,500 Reorganization Manager Fire Fire Code Inspector Add 2.00 153,000 Restore Service Engineering Director of Utilities Sr Add 1.00 146,000 Reorganization Engineering Planning Strategic Project Mgr Net 0.00 0 Reorganization - Replaced Planning Manager Finance Financial Services Spec Add 1.00 63,000 Reinstatement of position. Total Mid -Year Adjustments 5.00 $484,500 Introduction • Section 1 - The following charts summarize the general government (i.e. tax - supported) and non - general government position additions and deletions included in the 2013 budget. 2013 PRELIMINARY GENERAL GOVERNMENT BUDGET POSITION ADJUSTMENTS Base Fund /Department Description Chg F/V # Benefits Remarks Legal Prosecutor Add 1.00 $103,000 Indigent Defense rule changes. Municipal Court Cashier Add 1.00 54,000 Reinstatement of position. Planning Admin Asst /CED Dir Del V (1.00) (54,000) Attrition Reduction Codes Admin Utility Prod Coordinator Add 1.00 67,000 25°0 General Government Funding Police Civilian Support Add 2.00 77,000 Expand gang unit - 4 /1/13 Officers Add 2.00 44,000 Expand gang unit - 10/1/13 Fire Firefighters Del V (3.00) (220,000) ARRF reductions at the Airport. Net addition of overtime. Customer Service Water Service Specialist Del V (1.00) (60,000) Reorganization / Attrition Reduction Total General Government 2.00 ($19,000) Each of these proposals in the following chart has an identified revenue source or other expenditure reduction to support the additional cost. 2013 PRELIMINARY NON - GENERAL GOVERNMENT BUDGET POSITION ADJUSTMENTS Base & Fund /Department Description Chg F/V # Benefits Remarks ONDS Housing Specialist Del (0.75) ($50,000) Unfunded Position Public Safety 9 -1 -1 Call takers Add 2.00 124,000 Relieve the workload of the Communications Dispatchers. Transit DA II Add V 030 26,000 Expand Vanpool Service Irrigation Water 'Irrigation Admin Del V (1.00) 53,000 Attrition Reduction Public Works DA II Del V (1.00) 46,000 Attrition Reduction Total Other Operating Funds (0.25) $199,000 GENERAL STAFFING - ADJUSTMENTS SUMMARY & COMPARISONS In the 2013 budget, management continues to accommodate Federal and State unfunded mandates and provides critical public safety and other essential services. In an effort to minimize costs and increase efficiencies, management has increased, decreased, and reorganized personnel resources in the 2013 budget. Net addition of 6.75 FTE's and approximately $0.7 million dollars between the 2012 adopted and the 2013 proposed budgets. 22— Section l • Introduction > Since the recession started in late 2008, General Government is operating with a net total of 36 fewer FTE's in 2013 (from 478 in 2008 to 442 in 2013) a reduction of 8 1% > The per capita number of General Government employees has decreased over the past decade (per every 1,000 population) from 5 7 FTE's in 2002 down to 5 1 FTE's in 2012 Comparison with other Cities In order to balance the budget within available resources, the City has made numerous reductions in staffing and related programs over the past several years These staff reductions have resulted in favorable cost comparisons with other aties, as reflected in the following charts The data utilized in the following comparisons was compiled from the State Auditor's Local Government Comparative Statistics for 2011 and includes comparisons of comparable Washington State cities with populations between 45,000 and 125,000 PAYROLL COSTS The City of Yakima costs well below the average per capita payroll costs out of the twelve comparison aties ?shins s per capdaexperduult onpayrollt $600whrh 5512 son - ls $ 581as than the average aly per capita of$683 S81,2 S 25 , n MO S5i6 Q610 Fmo 5500 w? ' nm i H C.ix+ :wlk A.x Kcnnc+ »dc Kant Auban Yakima Rantrn Rodlland Kaldand Eater= Evaatt Radmaoud TOTAL EXPENDITURES The City of Yakima had the fourth lowest average per capita total expenditures out of the twelve comparison aties F3,3m 53,50 Wawa. spercapsta tot 31 expaldstuxs are witch e $Fir SZA,s Y� than ke average aty par psi revalue of $2,Ud1 F" ^ 53,00 52,50 $x.or o £2.202 £2.202 S1 � R Seam 51.558 $1.3:7 $1 130 51,50 51233 SLOW 5530 So ism Pao Mary:nEcKc+nevmJc Yakima Kan! Auburn Rankin Evaatt Kakland Ealkvua Maitland Redwood Introduction • Section 1 — 23 TOTAL RESOURCES The City of Yakima also had the fourth lowest average per capita total revenue out of the twelve comparison attes Wp 53,337 S3,3110 - Yakima spercapdatotslrevenuess $1,5$ whchts$660 $27,77 ssthsntle average ntyperespuso!$2,1ffi F2 �1 k 53,1300 - 19l San' Szsaa - 52,W3 nom ' Sl 6J1 it i F_:! ] sum sum - ma- rt Kannavndc Paso, Maysville Yakima Kant Aubmn Rankin Event! Kaki nd Dal via R.dd nd Redmond These comparisons demonstrate that the Qty of Yakima has hinted revenue/tax base compared with most cities of its size in the state and yet provides similar or enhanced services to its atizens (For example, of the 12atLes included in the comparison, only Everett has a transit system, there are no other aty owned irrigation systems, and a few of the aties are members of a Regional Fire Authority, so have no fire expenditures) As reflected on the previous pages of this section, management has closely monitored and maintained a strong fiscal discipline over spending throughout all City departments for years This has preserved the City's reserve position —and a stable credit rating — during some very difficult times The Five Year Financial Plan contains strategies to continue to balance the budget going forward even though projected revenue growth will continue at a rate below inflation 24- Section 1 Introduction GENERAL GOVERNMENT FUNDS: YEAR IN REVIEW 2012 GENERAL GOVERNMENT ESTIMATED REVENUES AND EXPENDITURES General Parks & Rec Street Fund Fund Fund Total Actual Beginning Balance $8,440,130 $296,800 $1,211,290 9,948,220 Estimated Revenue 51,370,276 4,036,753 5,080,888 60,487,917 Total Estimated Resources 59,810,406 4,333,553 6,292,175 70,436,137 Less: Estimated Expenditures 51,327,216 3,970,318 5,194,342 60,491,576 Estimated Ending Balance 2012 $8,483,190 $363,235 $1,097,836 $9,944,261 General Government is the term used to describe basic tax supported activities, which are included in three funds: General Fund Services provided include police, fire, code enforcement, planning, legal, municipal court, city administration, financial services, purchasing, and information technology • 2012 year -end revenue estimate is $51,370,276 — $2,985,662 or 6.2 °° above the 2011 actual, and $2,982,005 or 6.2 °° greater than 2010 actual. • 2012 year -end expenditure estimate is $51,327,216 — $213,321 or 0.4 °° under the authorized, amended budget of $51,540,537 due primarily to salary savings from position vacancies. Parks and Recreation Fund Services include Parks programs and maintenance. • 2012 year-end revenue estimate is $4,036,753 — ($69,357) or (1.7 °°) below the actual levels for 2011, with the primary decrease due to reduced activity in the Senior Center tour program. • 2012 year -end expenditure estimate is $3,970,318 — ($30,379) or (0.8 °°) under the 2012 amended budget. Sheets Fund Services include Street and Traffic operations and maintenance. • 2012 year-end revenue estimate is $5,080,888 — ($50,882)or (1.0 °°) °° less than actual levels for 2011. This decrease is primarily due to property tax reallocation to match expenditure reductions, and the receipt of a one -time traffic safety grant in 2011. • 2012 year -end expenditure estimate is $5,194,342 — ($4,815)or (0.1 °°) under the 2012 amended budget. The effects of the national economic recession have turned around slightly through 2012, and the city is experiencing an increase in Sales Tax for the first time since the recession started in 2008. The 2012 General Government revenue budget was $59,574,685, so the year -end estimate of $60,487,917 is about $913,232 or 1.5°° more than budgeted, with most of this increase coming from sales tax. General GovernnientFunds • Section 77 -1 The 2011 actual revenue for these 3 funds was $57,622,494, so the 2012 estimate is $2,865,423 or 5.0°° above the prior year actual. This is due primarily to the increased utility tax authorized by Council to be effective in 2012 (estimated to generate about $2.0 million in 2012), and the improved sales tax. The annual rate of inflation as measured by the CPI -U (All Urban Consumers) is 1.7 °° in August, 2012 for all cities, and the Seattle index is 2.7 °°. GENERAL GOVERNMENT COMPARISON 2012 BUDGET VS. YEAR -END ESTIMATE 2012 2012 Year -End Est. Amended Year -End as Percent of Fund /Department Budget Estimate Variance Budget Police $24,303,966 $24,229,400 $74,566 99.7° Fire 9,380,495 9,321,562 55,933 99.4 Technology Services 2,447,396 2,355,515 58,575 97.6 Transfers 3,231,275 3,212,275 19,000 99.4 Code Administration 1,208,765 1,211,149 (2,384) 100.2°0 Police Pension 1,186,350 1,263,744 (77,394) 106.5 Legal 1,127,361 1,124,131 3,230 99.7 Financial Services 1,423,065 1,429,750 (6,652) 100.5 Municipal Court 1,256,5S7 1,228,681 27,906 97.8° Engineering 702,274 681,897 20,377 97.1 Utility Services 1,342,110 1,319,890 22,220 98.3° Environmental Planning 622,101 593,153 25,945 95.3 Records 513,172 529,455 (16,253) 103.2 City Manager 367,925 367,336 559 99.5 Human Resources 449,625 445,577 751 99.8 City Hall Maintenance 357,016 357,104 (SS) 100.0 Indigent Defense 481,000 485,000 (4,000) 100.8 Purchasing 527,535 527,195 340 99 9 Intergovernmental 240,299 243,299 (3,000) 1012°0 City Council 235,214 232,500 2,714 9S.S State Examiner 106,000 106,000 0 100.0 Hearing Examiner 31,000 26,000 5,000 S3.9 Total General Fund 51,540,537 51,327,216 213,321 99.6 Parks Sr Recreation 4,000,697 3,97 0,318 30,379 99.2°0 Street Sr Traffic Operations 5,199,157 5,194,342 4,815 99 9 Total General Government $60,740,391 $60,491,876 $248,515 99.6 The preceding table provides a breakdown of the year -end estimate of General Government budgets for 2012. The largest positive variance (expenditure savings) is in the Police Department and relates to salary savings from several vacancies. Most of the other positive variances are also related to position vacancies. Following is a listing of departments projected to exceed budget: Code Administration - the dangerous building abatement is exceeding budget. This is expected to be recouped by billing the property owners. Note: the 2013 budget is being increased by $15,000 to more adequately fund this program. 2 - Section II • General Government Funds • Police Pension — Medicare premium rates increased more than anticipated. Also, the Police settlement affects the pension calculations. • Financial Services — 3 long -term employees left the City, resulting in a significant one -time cashout expense. Most of this additional cost is mitigated by leaving one of the positions vacant for the rest of the year. • Records — A position was unbudgeted in 2012 to cover the cost of the cashout of the retiring City Clerk. Because this division only has 4 positions budgeted, a reduction of 25 °° of the staffing could not be absorbed, and the 4th position was filled in the fall. • Indigent Defense — The budget is based on fixed contracts, and an estimate for appeal services. The variable costs are exceeding estimates. • Intergovernmental — The estimate of the required payment of 2 °0 of the liquor tax revenues to a substance abuse program was lowered for 2012 in response to the projected reductions of this state shared revenue. As the revenue is exceeding estimates, so is this cost. Because the legal level of control for budget authority is the fund level, and General Fund is estimated to be under spent in total, staff is not proposing budget amendments for these overages at this time. GENERAL FUND THREE YEAR COMPARISON 2012 2010 2011 Year -End Actual Actual Estimate Beginning Balance $8,152,009 $8,275,553 $8,440,130 Revenues 48,385 271 48,384,614 51,370,276 Total Resources 56,540 280 56,660,167 59,810,406 Expenditures 48,520,257 48,255,814 51,327,216 Ending Balance $8,020,023 $8,404,353 $8,483,190 Note: The beginning balance for all of the years presented has been restated to include the change in accounting principle to add sales and utility taxes based on the time of the underlying transactions instead of the time the tax is received by the City General Government Funds • Section II -3 GENERAL GOVERNMENT FUNDS: REVENUE TRENDS The City receives revenue from many different sources; some revenue is available for any government purpose and some revenue is restricted in use to a specific fund(s) and /or a specific purpose. The sources of revenue that are available for use within the General Government Funds (for general purposes or for a restricted purpose within General Fund, Parks or Street Funds) are listed in the following charts, along with a three -year comparison of the amount of revenue received from each source. For 2013, total General Government revenues are budgeted to be $61,912,660; $1,424,743 or 2.4 °0 more than the 2012 year -end estimate of $60,487,917 Total beginning cash reserves are estimated to be $9,944,261, ($3,959) or 0.0 °0 less than the 2012 estimate of $9,948,220. This fund balance is about 16.1 °0 of the proposed 2013 budget. Variances in revenues at this combined level are explained briefly below A more detailed explanation follows the chart. • Sales Tax — for 2013 is projected to be approximately $200,000 or 1.5 °0 above the 2012 estimate. Even though it is estimated to grow by 4.4 °0 in 2012 and an additional 1.5 °0 in 2013, it will still be slightly below 2007 levels, and 2.7 °0 below the 2008 high of about $13.7 million. • Property Tax — increased $286,000 or 1.9 °0. This includes the levy limit increase of 1 °0, plus new construction (about 0.75 °0), and a redirection from the Firemen's pension fund in response to the continued savings from transferring LEOFF 1 medical expense of pensioners over age 65 to Medicare and purchased Medicare supplemental insurance. • Franchise and Utility taxes — increase (2013 over 2012) of $498,000 or 3.6 °0 is largely due to the full year implementation of the additional 6 °0 utility tax started early in 2012, coupled with rate adjustments proposed in a few of the major utilities. • Charges for Services — are up by $623,600 or 10.5 °0 primarily because of proposals to implement a fire inspection fee ($165,000); increase engineering fees for construction inspection ($100,000); increase a few Parks and Recreation fees ($43,500). Program usage is estimated to increase in a few areas, while other charges are estimated to remain flat. • State Shared Revenue — is being reduced by ($352,490) or (11.6 °0 mainly because the current state budget includes the complete elimination of Liquor Excise Tax for 3 quarters in 2013. • Other Revenues — are ($3,323) or (0.5 °0 below 2012. This is mainly due to the dropping rate of return on investment interest. • Other Intergovernmental Revenue — is up $99,264 or 8.6 °0 which is largely due to the increased contribution by the Yakima School District for school resource police officers. 4— Section II • General Government Funds GENERAL GOVERNMENT RESOURCES THREE YEAR COMPARISON %of - - 2013 vs 2012 -- 2011 2012 Percent 2013 2013 Increase Percent Source Actual Estimate Change Budget Total (Decrease) Change General Sales Tax $12,590,563 $13,150,000 4 4% $13,350,000 21 6% $200,000 1 5% Crim Justice Sales Tax 2,612,126 2,670,000 2 2% 2,747,000 4 4% 77,000 2 9% Property Tax 14,845,465 15,043,000 1 3% 15,329,000 24 8% 286,000 1 9% Franchise & Utility Taxes 11,544,231 13,897,000 20 4% 14,395,000 23 3% 498,000 3 6% Charges for Services 6,465,872 5,920,605 (8 4 %) 6,544,205 10 6% 623,600 10 5% State Shared Revenue 2,945,617 3,046,390 3 4% 2,693,900 4 4% (352,490) (11 6 %) Fines and Forfeitures 1,569,946 1,555,000 (1 0 %) 1,555,000 2 5% 0 0 0% Other Taxes 1,388,470 1,395,500 0 5% 1,396,500 2 3% 1,000 0 1% Other Revenue 614,179 631,973 2 9% 628,650 1 0% (3,323) (0 5 %) Transfers from other Funds 1,173,438 1,248,308 6 4% 1,290,000 21 % 41,692 3 3% Other Intergovernmental 1,030,315 1,152,441 11 9% 1,251,705 2 0% 99,264 8 6% Licenses and Permits 842,272 777,700 (7 7 %) 731,700 1 2% (46,000) (5 9 %) Total Revenue $57,622,494 $60,487,917 5 0% $61,912,660 100 0% $1,424,743 2 4% Beginning Fund Balance 9,710,900 9,948,220 2 4% 9,944,261 (3,959) (0 0 %) Total Resources $67,333,394 $70,436,137 4 6% $71,856,921 $1,420,784 2 0% (1) Some Criminal Justice sales tax is allocated to the Law and Justice capital fund (a non - general Governmental fund) for capital needs GENERAL GOVERNMENT RESOURCES 2012 YEAR -END ESTIMATE AND 2013 BUDGET FORECAST Sales Tax /Crum Justice $1 Property Tax iii. $15,329,000 Franchise & Util Taxes $14,395,000 Charges for Services IM $6,544,205 State Shared Revenue 2 Fines and Forfeitures III $1,555,000 2013 vs 2012 Estimate Increase Tot al Resources Other Taxes $1,396,500 Amount $1,420,784 Percent 2 0% Other Revenue . $628,650 Transfers from other Funds _ $1,290,000 ■2013 Budget •2012 Y/E Estimate Otherintergovernmental ' 1 1 $1,251,705 Licenses and Permits 3$731,700 Beginning Fund Balance $9,944,261 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 General Government Funds • Section 11— 5 In some instances, certain revenues are dedicated for specific purposes (i.e. grant proceeds). Additionally, certain revenues are generated by operations, so that if the operations are reduced or eliminated, the revenue would also be reduced or eliminated (i.e. Parks recreation program). The following chart summarizes net revenue by Department. NET REVENUE (Includes Dedicated Revenues) Net Department Expenditures Revenue City Management $4,955,547 $1,860,075 Legal 1,258,965 329,013 Municipal Court 1,387,541 303,970 Finance 6,733,979 2,322,172 Community Sr Economic Development 2,279,674 1,343,97 9 Engineering 670,639 721,200 Police 25,300,519 4,499,605 Fire 9,848 295 176,400 Parks Sr Recreation 4,059,115 1,292,165 Streets 5,421,150 1,519,260 $61,915,453 $14,367,842 This demonstrates that about 23.2 °0 of General Government revenue is either dedicated to or generated by certain operations. GENERAL SALES TAX (SINGLE LARGEST REVENUE SOURCE FOR GENERAL FUND) 2013 revenue projection is $13,350,000 —1.5°° above the 2012 year end estimate. After 3 years of sales tax being about $1.1 million or 8 °0 below the 2008 high of $13.7 million, sales tax has picked up in 2012. Through September, 2012 sales tax is about 5 °0 ahead of 2011 year to date, so that the year -end estimate is $13.1 million. 2013 assumes an increase of 1.5 °° over this higher activity, to $13.3 million (still below 2008 levels.) The agricultural sector of our economy is experiencing a relatively good year, and construction sales tax is on the upswing, with the Yakima School District projects slated to continue through 2013. Of the 8.2 °° sales and use tax collected within the City, the City of Yakima receives only 0.85 °0 (or about 10.1 °0 of the total) in general Sales Tax revenue. The General Government Funds receive the full amount of the City's share of general sales tax revenues. (Note: the City also receives 0.3 °° sales tax revenues which are restricted for transit purposes and a portion of the 0.4 °° sales tax revenues which are restricted for criminal justice purposes. The State receives 6.5 °° and Yakima County receives .15 °° of the remainder — refer to Exhibit II for more information.) The following chart identifies Yakima's sales tax revenues as they relate to the total General Fund operating revenues (excluding interfund transfer revenues). This revenue source is very sensitive to economic conditions. As the graph below shows, sales tax receipts have trended downward over the past 10 years as a percentage of total revenue in the General Fund, as other revenue sources 6 — Section II • General Government Funds such as utility tax have generally kept up with inflation and the Qty has been successful in obtaining grants The decrease in the 2010 through the 2012 estimate reflects the deceleration in the sales tax growth rate due to economic conditions PERCENT OF SALES TAX COMPARED TO OPERATING REVENUE GENERAL FUND 34% 32% 3096 ...�.,, 26% _ '... 26% 24% 2003 2004 2005 2006 2007 2006 2009 2010 2011 2012 Criminal Justice Sales Tax 01% Saks Tax - A special 0 1% Criminal Justice Sales Tax was originally approved by the voters of Yakima County in the November 1992, General Election and became effective January 1, 1993 The State allocates this 0 1% criminal justice sales tax revenue between the City and the County based on a predefined formula This revenue is restricted to providing criminal justice related services and is allocated based on operating vs capital needs This tax revenue is affected by the same regional economic factors that affect the General Sales Tax revenue This tax is expected to generate $1,065,000 for the City in 2013 and is allocated in the Qty's budget forecast as noted in the following chart 01% CRIMINAL JUSTICE SALES TAX 2012 2013 2011 Year -End Budget Fund Actual Estanate Forecast General Fund $939,530 $960,000 $1,000000 Law and Justice Capital 41,889 85,000 65,000 Total $981419 $1,045,000 $1,065,000 0 3% Saks Tax - Another speaal sales tax of 0 3% dedicated to Criminal Justice expenditures was approved by the Yakima County voters in November, 2004, and took effect on April 1st of 2005 The tax is on sales inside the County only and the proceeds are divided between the County and Qties on a predefined formula under which the County receives 60% and all aties within the County share the remaining 40% Ant apated revenue is depicted in the table below (Note Public Safety Communications and Law and Justice Capital Finds are not part of General Government) This tax is expected to generate $1,950,500 in 2013, and is allocated in accordance with the following chart General Government Funds • Section II — 7 0.3% CRIMINAL JUSTICE SALES TAX 2012 2013 2011 Year -End Budget Fund Actual Estimate Forecast General Fund (for Criminal Justice Expenditures) $1,672,596 $1,710,000 $1,747,000 Public safety Communications 131,500 156,000 177,500 Law and Justice Capital 27,200 47,500 26,000 Total $1,S31,296 $1,913,500 $1,950,500 Exhibit III contains a summary of how these funds have been spent over the past 5 years. PROPERTY TAX Property tax provides approximately 21.8 °0 of all General Government revenue in the 2013 budget. The 2013 budget is based on a 1 °0 increase in the property tax levy, as currently allowed by state law, or approximately $164,000, plus a conservative 0.75 °0 or $122,000 increase for new construction for a total increase of $286,000 for a total, with Fire pension, of $16,644,000. The 2013 request complies with the levy limit restrictions which cap property tax levy increases to the maximum of 1 °0 or the rate of inflation, whichever is less. (Note: state law defines the rate of inflation as measured by the Implicit Price Deflator for consumer goods). State law also allows the City to increase the levy by more than 1 °0 if approved by the majority of voters. As a point of clarification, the property tax levy restriction limits the change in the dollars levied (1 °0 would generate about $164,000 for 2013) — it does not limit growth in assessed value. The 1 °0 limit affects the total dollars levied, while assessed valuation is the mechanism used to allocate the levy ratably among the property owners. Since most consumer activity (i.e., wages, equipment, etc.) is more closely tied to the Consumer Price Index (CPI), and CPI is greater than 1 °0 in almost all years, the future effect of 1 °0 or less growth in Property Tax is restrictive to the City since Property Tax is one of General Government's primary revenue sources. This restriction was recognized in the Five -Year Financial Plan, and is a component in the projected deficits going forward. For sake of comparison, the Yakima Police Patrolman's Association and the International Association of Firefighters negotiated settlements together amount to almost $1 million in 2013, which is 3.5 times more than the estimated increase in property taxes. The following chart and graph depict the 2013 budgeted allocation of the City's property tax revenues. 8— Section II • General Government Funds 2013 PROPOSED GENERAL PROPERTY TAX LEVY — BY FUND 2012 2012 Est 2011 Amended 2012 2013 vs 2013 Actual Budget Estimated Budget Budget General $9,595,175 $9,934,000 $9,934,000 $10,009,000 0 8% Parks & Recreation 1,725,983 1,578,000 1,608,000 1,457,000 (9 4 %) Street & Traffic 3,524,307 3,456,000 3,501,000 3,863,000 10 3% Sub Total General Government 14,845,465 14,968,000 15,043,000 15,329,000 1 9% Fire Pension 1,406,844 1,315,000 1,315,000 1,315,000 0 0% Total $16,252,309 $16,283,000 $16,358,000 $16,644,000 1 7% 2013 PROPOSED GENERAL PROPERTY TAX LEVY — BY FUNCTION Fire & Police Pension $2,612,225 ‘ii Parks $1,457,000 8 8% General Fund $8,711,775 52 3% Streets $3,863,000 23 2% Note: Property tax is allocated among the General Government funds based on each funds need to balance to available resources FRANCHISE AND UTILITY TAXES Franchise and utility taxes are collectively the third largest category of General Government revenues They comprise 23 3% of 2013 projected General Government revenues and 23 6% of projected 2013 General Fund Revenues General Government Funds • Section II — 9 > 2013 projection is $14,395,000 — $498,000 or 3 6% above the 2012year end estimate of $13,897 000 These revenues are largely a function of weather conditions and utility rates in the Valley In 2011, the lingering rec and conservation education combined to reduce usage so that this category was estimated to be relatively flat for 2012 before Council approved a 6% increase in the Wastewater, Water, Refuse and Stormwater utility tax This was estimated to generate about $2 million in 2012 Since the effective date of the increase was later in January and the billings are after the fact, only about 11 months of this tax was collected in 2012 The 2013 budget includes the full year coupled with anticipated rate increases Franchise and utility taxes combined are the only major revenue source keeping pace with the rate of inflation primarily because of rate increases implemented by utility providers The graphs below depict how the Qty of Yakima compares to other atles of somewhat similar population relative to (a) sales tax, (b) property tax and (c) utility tax per capita These comparisons show that for all 3 of the major tax sources, Yakima is below the state average This data was compiled from the State Auditor's Local Government Comparative Statistics, and includes comparisons of comparable Washington State aties with population between 45,000 and 125,000 SALES & USE TAXES $431 $451 Sass - Yal:una per capsda rax 2$2S, $L3-351.2.3 Sr5 $400 - tbaneyeaeeravcaypacapaa of $26S $350 - Saa 5300 - $2 la $223 $B0 R, 5ra 5250 - 5183 Salo - $139 5151 $150 - $100 - $33 - Sa T Maysville Paz° Kan! Kanmmmdc Rxiland Aub,an Yakima Rands Kirkland Evmald Bellevue Redmond 10 — Section 77 General Government Funds PROPERTY TAXES 91 Sass Yakunaspercaptapoperly tax ss$166,whchis$101 rc' $aga thnthe average alypercapus of $266 5350 Sw1 ?� f S as fizT S25a ft2W e S21a 9144 Elsa 9163 9150 Slav S Ssa Sa Vasco Kennewick Kant Y lama Auburn Marya•x11 Rxdbnd &lkvu Rankin Eva l! Redmond 1Jxldand B & 0 / UTILITY TAXES 9116 S1m - Y i w peresp taB&O /utihlytsxis $161,whchrs $ 661astlnnthe average city percapusof $21)8 Svsu - 5292 S301 £300 - £270 £250 - $191 Stet - F1 a1 S1 SL' Sva S>o2 9135 a931 9193 9100 - $30- 93 Maryavxa Prom name Kennewick Kant Aran Rants Rxdl nd Redmond Kxxkbnd Bveneti Balkvu CHARGES FOR SERVICES This revenue category consists of revenues from various parks and senior citizen programs, plan checking fees and street and traffic engineering fees, etc However, the largest component (more than half) are fees paid by other Qty funds for General Fund services (legal administration purchasing utility billing etc) > 2013 projection is $6,544,205 This is a 10 5% or $623,600 increase from the 2012estimate The lingering recession caused the Qty to critically look at all services being provided, and in a couple instances services were discontinued if they could be provided by the private sector Fire inspections and construction inspections were areas that were eliminated or greatly reduced in the 2012 budget Some of the affected public have asked for these services to be reinstated and have expressed a willingness to pay for these services Therefore this budget includes the implementation of a fire inspection program and related fees of about $165,000, and a fee increase to cover construction inspections 100% which could generate an additional $100,000 depending on volume General Government Funds • Section II — 21 On a similar note, Parks and Recreation reviews its fees about every 3 years, and tries to strike a balance between maintaining comparability with similar facilities in the community, and affordability for program participants. There are adjustments to the Parks and Recreation fee schedule, which are estimated to generate an additional $43,500 in 2013. Other increases are related to usage (such as the Senior Trip program). STATE SHARED REVENUE State shared revenues are the fifth largest category of revenues received for General Government Operations. 2013 projection for all revenues within this category is $2,693,900; a decrease of ($352,490) from the 2012 year -end estimate of $3,046,390. The State Legislature eliminated the Liquor Excise Tax for one year in order to help balance the State's budget. The effective date of the eliminated distributions are quarterly starting in October 2012 going through July 2013, so that we received 3 quarters of the distribution in 2012, but will only receive one quarter in 2013. Other revenues in this category are relatively flat. FINES AND FORFEITURES These revenues come primarily from criminal fines and noncriminal penalties assessed in the City of Yakima's Municipal Court, and parking violations. This revenue category is budgeted to remain flat at $1,555,000 for 2013. OTHER TAXES This category includes Business Licenses, Gambling Taxes and County Road Tax from annexation. The 2013 projection is $1,396,500, up 0.1°° or $1,000 — virtually the same as the 2012 year -end estimate. OTHER REVENUES The balance of revenues supporting the general government funds consists of transfers from other funds (other financing sources) and miscellaneous revenues. For 2013, $628,650 is expected to be generated in this category, a decrease of ($3,323) or (0.5 °°) from the 2012 year end estimate of $631,973, since current market conditions have reduced interest earnings. The largest revenue sources in this category include: Interest income — 2013 projection is $260,000. Operating transfer from other funds — 2013 projection is $1,250,000 and consists primarily of the transfer of 3.5 °° of City owned utility taxes to the Parks and Recreation fund. 12— Section II • General Government Funds OTHER INTERGOVERNMENTAL This category includes revenue received from other Government units other than the per capita distributions from the State of Washington. The 2013 budget of $1,251,705 is up $99,264 or 8.6 °0 from the 2012 estimate largely due to the increased contribution by the Yakima School District for school resource police officers. LICENSES AND PERMITS The 2013 budget is $731,700, (5.9 °0 or ($46,000) less than the 2012 year -end estimate of $777,700. The decrease is in response to challenges currently being faced in the building industry in general as a result of contraction in the new home market and turmoil in the credit markets. REVENUE TRENDS — OVERVIEW Total General Government revenue has remained flat from 2008 to 2011, the average annual revenue is $57.5 million. For 2012 the estimated revenue of $60.5 million shows a growth of 5 °0 mainly due to the 6 °0 increase in utility tax (approved by Council to fund twelve additional police officers), and an upturn in sales tax. Projected revenue for 2013 is $61.9 million, a 2.4 °0 increase — a modest increase resulting from the property tax calculation, a continuation of a rebound in sales tax, growth in utility taxes, and new fees to support specific services. GENERAL GOVERNMENT RESOURCE COMPARISON - BY FUND GENERAL GOVERNMENT THREE YEAR RESOURCE COMPARISON 2012 2012 2013 2011 Year -End vs. 2013 vs. Actual Estimated 2011 Budgeted 2012 Resources Resources °° Change Resources °° Change General Fund $48,384,614 $51,370,276 6.2% $52,435,635 2.1 General Fund Beg Balance 8,275,553 8,440,130 2.0% 8,483,190 0.5 Total General Fund 56,660,167 59,810,406 5.6% 60,918,825 1.9 Parks & Recreation 4,106,110 4,036,753 (1.7 %) 4,058,765 0.5 Parks Beg Balance 385,681 296,800 (23.0 °0 363,235 22.4 Total Parks 4,491,7 91 4,333,553 (3.5 %) 4,422,000 0 0 Street & Traffic Fund Revenue 5,131,770 5,080,888 (1.0 %) 5,418,260 6.6 Street & Traffic Beg Balance 1,285,030 1 211 290 (5.7°0 1,097,836 (9 4 °..) Total Street &Traffic 6,416,800 6,292,175 (1.9 %) 6,516,096 3.6 Total Revenue 57,622,494 60,487,917 5.0% 61,912,660 2.4 Total Beg Bal 9,946 264 9,945 220 0.0% 9,944,261 (0.0 %) Total General Government $67,568,758 $70,436,137 42 $71,856,921 2.0 (1) Resources include both annual revenues and beginning fund cash balances. General Government Funds • Section 77 -13 GENERAL GOVERNMENT RESOURCES BY MAJOR CATEGORY 2012 2012 2013 2013 2010 2011 Amended Year -End Forecast °° Change Actual Actual Budget Estimate Budget f/ 2012 Est. 1 2 3 4 5 4 -5 General Fund Property Tax $9,190,326 $9,595,175 $9,934,000 $9,934,000 $10,009,000 0.S Sales Tax 12,653,993 12,590,563 12,550,000 13,150,000 13,350,000 1.5 Criminal justice Sales Tax 2,553,893 2, 612, 126 2, 575,500 2,670,000 2,747,000 2.9 Franchise Tax 44,520 44,569 42,000 50,000 50,000 0.0 Utility Tax 11,991 269 11,499,662 13,944,000 13,847,000 14,345,000 3.6 Other Taxes 1,367,030 1,388,253 1,392,000 1,395,500 1,396,500 0.1 Licenses and Permits 768,469 842,272 616,700 777,700 731,700 (5.9 %) Intergovernmental Revenue 2,813,157 2,553,306 2,316,230 2,821 246 2,560,105 (9.3° Charges for Services 4,917 225 5,343,249 5,079,930 4,53:,650 5,360,450 10.8 Fines and Forfeitures 1,658,467 1,569,946 1,645,700 1,555,000 1,555,000 0.0 Miscellaneous Revenue 338,922 305,493 333,550 292,150 290,850 (0.4° Capital Lease Financing 51,000 0 0 0 0 n/a Transfers From Other Funds 40,000 40,000 40,000 40,000 40,000 0.0 Total Revenue $48,388,271 $48,384,614 $50,469,610 $51,370,276 $52,435,635 2.1 Beginning Fund Balance 4,612,886 8,040,189 8,440,130 8,440,130 8,483,190 0.5 Total General Fund $53,001,157 $56,424,803 $58,909,740 $59,810,406 $60,918,825 1.9 Parks & Recreation Fund Property Tax 1,665,500 1,725,983 1,578,000 1,608,000 1,457,000 (9.4 °0) Intergovernmental Revenue 139,555 85,374 92,000 101,055 92,000 (9.0 Charges for Services 930,907 907,145 945,965 866,865 967,965 11.7 °0 Miscellaneous Revenues 221,S35 246,260 224,S00 235,S03 236,S00 0.4 °0 Other Financing Sources 0 47,910 55,000 55,000 55,000 0.0 Transfers From Other Funds 1,150,565 1,093,438 1,154,000 1,170,000 1,250,000 6.S °0 Total Revenue $4,105,362 $4,106,110 $4,049,765 $4,036,753 $4,058,765 0.5 °0 Beginning Fund Balance 339,555 385,681 296,S00 296,S00 363,235_"2.4 °° Total Parks & Recreation Fund $4,447,917 $4,491,791 $4,346,565 $4,333,553 $4,422,000 2.0 °0 Street and Traffic Operations Fund Property Tax 3,375,700 3,524,307 3,456,000 3,501,000 3,863,000 10.3 County Road Tax 27,411 217 0 0 0 n/a Fuel Tax Street 1,253,504 1,289,527 1,300,000 1,276,000 1,293,000 1.3 Other Intergovernmental 0 47,725 500 500 500 0.0 Charges for Services 228,007 215,47S 215,760 216,060 215,760 (0.1°..) Miscellaneous Revenue 27,779 13,661 23,050 7,020 4,000 (43.0 %) Other Financing Sources 12,567 S55 20,000 42,000 42,000 0.0 Transfers From Other Funds 40,000 40,000 40,000 38,308 0 (100.0 %) Total Revenue $4,964,965 $5,131,770 $5,055,310 $5,080,888 $5,418,260 6.6 Beginning Fund Balance 1,461 266 1,285,030 1,211,290 1 211 290 1,097,836 (9 4 °..) Total Street & Traffic Ops. Fund $6,426,234 $6,416,800 $6,266,600 $6,292,178 $6,516,096 3.6 Total General Government $63,875,308 $67,333,394 $69,522,905 $70,436,137 $71,856,921 2.0 Total Revenue $57,461,601 $57,622,494 $59,574,685 $60,487,917 $61,912,660 2.4 Total Beginning Fund Balance 6,413,707 9,710,900 9,948,220 9,945 220 9,944 261 (0.0%) Total Resources $63,875,308 $67,333,394 $69,522,905 $70,436,137 $71,856,921 2.0 14- Section II • General Government Funds GENERAL GOVERNMENT FUNDS EXPENDITURE TRENDS Criminal ustice costs continue to consume an ever increasing share of total General Fund resources J g In order to pay these costs other General Fund programs are necessarily limited/reduced to remain within available resources See Exhibit III for more information The following charts depict the major effect on the General Fund of the increase in criminal justice costs compared to all other cost increases from 2003 to 2013 PERCENTAGE INCREASE OF CRIMINAL JUSTICE COSTS VS OTHER GENERAL GOVERNMENT FUNCTIONS AND CPI 2002 BUDGET TO 2013 BUDGET Criminal lushce $10,723682 j 515°/ Other $22632691 131% Consu mer Prig 272% Index Cumulatively over the past ten years Criminal Justice budgets have increased 53 5% By comparison all other General Government expenses have increased by only 13 1% During this same ten year period the Seattle Tacoma Consumer Price Index increased by 27 2% Crirrnnal justice Bost increases are not quite double what increases are for other cost categories When the increase in population and boundaries are considered over this same time frame, the fact that other services approximate the rate of inflation demonstrates a real reduction in service/costs per capita CRIMINAL JUSTICE FUNDING With the flattening of revenues funding available for criminal justice needs is insuffiaent to offset increases in Criminal Justice costs (The following chart depicts the growth in Law and Justice operations costs for 2011 2012 estimate and 2013 budget) Even with the cost savings assoaated with transferring mandated medical costs for LEOFF 1 retirees over the age of 65 to Medicare and related supplemental insurance this category of expense still increased by $1,789 101 In reviewing the following chart and graph, it should be noted that it includes only General Fund expenditures on criminal justice Another $0 6 million is budgeted in the "Police Grants" speaal revenue fund, which includes the 7 officers funded by a federal COPShiring grant The Law and Justice Capital Fund includes a budget of $0 5 million Also good to review is the Criminal Justice Expenditures as a Percentage of Total General Fund chart below which demonstrates that over half of General Funds budget is dedicated to criminal justice Note The large jump in the percentage General Government Funds • Sechon II — 25 in 2007 was the result of Counal s adoption of the Safe Community Action Plan which allocated a one tine gain in the property tax levy as a result of the library annexation of about $650,000 to fund additional Police officers in a dedicated proactive anticrime unit This ratio keeps spreading as Crirrnnal Justice has received increased allocations of resourc to address the gang issues facing the City In 2012 Council approved an increase of 6 0% in the tax rate for aty owned utilities (Wastewater, Water, Refuse and Stormwater) which added about $2 million in 2012 and $2 2 million in 2013 This additional tax was earmarked to save 6 police officer positions from elimination and add 6 rrore offic The 2013 budget includes a phased proposal to expand the gang unit Also affecting the 2013 budget is the Washington Supreme Court decision setting new rules for indigent defense This one mandate is adding almost $0 5 million annually CRIMINAL JUSTICE EXPENDITURES THREE YEAR COMPARISON Tu Change 2011 2012 2013 2013 from Description Actual YE Estimate Forecast 2012 Police Operations &Administration $18,674,469 $20,373,960 $21413,767 5 1% Outside/Inside Jail Costs 3,737 698 3,855 440 3,884752 08 °% Dasfrict Cour t/Municipal Court & Probation 1,151,934 1,228,681 1,387 541 129 °% Prosecution Costs/Indigent Drfense 1,176,798 1,243,662 1,722.303 38 5 °% Other Related Expenses Police Pension 1471,511 1,263,744 1297225 26 °% Emergency Dispatch Transfer 395,000 370,000 410,000 108 °% Transfer -Law &Justice Center C 156,205 170,000 1 77 000 41 °% Sub total 2,022.716 1,803,744 1,884,225 4.5% Grand Total $26,763,615 $28,505,487 $30294588 63 °% (1) UtilityTaoc fraisft from Genial Fund In the 2 years from 2011 to 2013 crirrnnal justice expenditures are estimated to increase by $3 5 million or 13 2%, keeping in line with the City Council's strategic priority to improve Public safety CRIMINAL JUSTICE EXPENDITURES AS A PERCENTAGE OF TOTAL GENERAL FUND 60.0% 56.0% +s rr`�4 4 52.0% Qt y almO 48.0% or • 44.0% 40.0% , 2004 2055 2006 2057 2008 2059 2010 2011. 2012 2013 Actual Actual Actual Actual Actual Actual ¢dual Actual YE Est Budget ∎••CrimmalTuatrce U AllOther 16 — Section 77 General Government Funds PERCENT OF PER CAPITA TOTAL REVENUE SPENT ON CRIMINAL JUSTICE IN 2011 Comparable Cities between 45,000 and 125,000 in Population 30)3% - Tte percentage of Yakunastotalrevenuespent on crmwnllushoe a 19814 wluchts47 %more than the 25.0% ' average percentage of 151% 18 4% 190% 198% 19 198% 28.0% • 16 1% 164% 16.5% 1 14.7% 13.8% 15.8% • 95% 10.0% ' 50% • Richland Redmond Kant Rod= Ballavuu Kokland Aublan Evezet M rvilk Pzz Yakima (1) Data compiled from the State Auditor's Local Government Comparahve Stahshcs The following chart depicts General government staffing levels per 1,000 population GENERAL GOVERNMENT BUDGETED POSITIONS COMPARISONS 10 FOR THE LAST TEN YEARS 6.20 - 60 59 / 59 600 5.8 5.8 5.90 5 5.60 5 E I,JSPIJJ M 2003 2004 2005 2006 2007 2008 2009 2010 2011. 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Number of Employees 4489 462.3 4711 4767 4973 502.8 5016 4896 4751 47317 Employees per Capita 57 58 58 58 59 60 59 54 52 51 Square Niles 242 242 253 259 259 276 287 287 287 287 Population 79,220 79480 81470 82,867 83,646 83,731 84,850 91,067 91,630 91,930 (1) Does not mdude temporary employees (numbers of employees are stated in full-tune equlvalelts) General Government Funds • Sechon II — 27 The following major events that have had significant effect on General Government staffing levels: . City population has increased 12,710 from 2003 to 2012, or 16.0°° • 2003 through 2004, 12 Fib's were added in Police and Fire to support services to a newly annexed area. • In 2005, 12.75 FTE's in Police, Courts and legal were added as a result of voter approval of a 0.3 °° increase in the sales tax rate for Criminal Justice. • In 2007, 9 positions were added in the Police Department as part of the Safe Community Action Plan (SCAP), paid for by the increase in property tax realized when the City annexed to the Rural Library District, 4 positions were added because of Public Safety grants, and 7 were added for 2 annexation areas. • In 2010, 7 Police Officers were added, funded by a COPS hiring grant, and 2 positions were added for the purchasing consolidation with Yakima County • In 2012, 6 Police Officers were added, funded by an increase in the City -owned utilities. It should be noted that a net of 24.3 new FIE positions have been added since 2003, or 5.4 °° over the past 10 years; compared to the 15.8 °0 increase in population during the same time period. Most of these additions were either in response to criminal justice issues, annexations, or both. This comparison also highlights the large reductions necessitated by the economic downturn starting in 2009 and continuing into 2012. Since 2009, staffing levels have been reduced by another 28.4 net positions. This reduced the ratio to 5.1 employees per 1,000 population —the lowest rate in well over a two decades. GENERAL GOVERNMENT EXPENDITURE SUMMARY The following chart illustrates that the total 2013 General Government budget is $61,915,455 , $1,175,064 or 1.9 °0 more than the 2012 amended budget of $60,740,391 2012 - 2013 GENERAL GOVERNMENT BUDGET 2012 2012 2013 2013 vs. 2012 Amended Est. Year -End Projected Preliminary Amended Budget Expenditures Budget Dollars Percent General $51,540,537 $51,327,216 $52,435,159 $594,622 1.7 Parks & Recreation 4,000,697 3,970,315 4,059,116 58,419 1.5 Street & Traffic Operations 5,199,157 5,194,342 5,421,150 222,023 4.3 Total General Government $60,740,391 $60,491,876 $61,915,455 $1,175,064 1.9 Section IV that follows summarizes the budget reductions being proposed to bring the 2013 General Government Budget within available resources. 18— Section II • General Government Funds OTHER FUNDS 2012 year -end estimates for the City's Other Operating and Enterprise Funds are summarized below• BUDGET STATUS 2012 2012 2012 2012 Amended Est. Actual Estimated Est. Ending Budget Expenditures Variance Resources Balance Economic Development $351,636 $270,443 $51,193 $500,142 $229,699 Neighborhood Development (Housing) 3,590,419 3,520,692 69,727 4,163,891 643,199 Community Relations 594,554 533,298 61,256 1,378,514 545,216 Cemetery 265,699 265,305 394 297,221 31,916 Emergency- Services 1,222,030 1,154,595 37,132 1 275,035 93,140 Public Safety Communications 3,558,224 3,413,756 144,465 3,77 ,3:3 363,617 Police Grants 1,174,399 1,113,015 61,351 1,516,704 403,686 Downtown Improvement District 235 ,962 158,462 77,500 270,474 112,012 Trolley (Yakima Interurban Lines) 75,021 74,581 440 53,511 8,930 Front Street Business Improvement 6,298 6,298 0 10,457 4,159 Tourist Promotion 1,447,373 1,442 237 5,136 1,799,289 357,052 Capitol Theatre 346,200 346,197 3 451,867 105,670 PFD Revenue - Convention Center 719,000 719,000 0 S94,S49 175,849 Tourist Promotion Area 636,000 630,000 6,000 698,722 68,722 PFD Revenue - Capitol Theatre 517,000 517,000 0 556,613 39,613 Recovery Program Grants 73,905 73,905 0 73,905 0 Storm Water Operating 2,243,246 2,129,245 114,001 3,092,6S7 963,442 Transit 7,777,953 7,777,27S 675 9,320,861 1,543,583 Refuse 5,410,763 5,351,335 59,425 5,881,925 530,590 Wastewater 19,437,140 19,292,863 144,277 20,159,595 566,735 Water 8,226,296 8,107,975 118,321 10,013,951 1,905,976 Irrigation 1,444,937 1,431,415 13,522 1,979,465 548,050 Equipment Rental 5,743,729 5,730,510 13,219 10,253,246 4,522,736 Environmental 277,339 277,339 0 551,611 304,272 Public Works Administration 1,185,478 1,179,429 6,049 1,592,820 413,391 $66,560,601 $65,546,479 $1,014,122 $50,627,734 $15,081,255 All Operating and Enterprise Funds are anticipated to end 2012 with positive fund balances. This analysis includes appropriations approved by Council through October. All operating funds are anticipating actual expenditures within authorized levels. 2013 projections for Other Operating and Enterprise Funds expenditures and resources are reflected in the following chart. (Resources include the beginning fund balance plus current year revenue, to arrive at a total available to spend.) Other Fnruis • Section III -1 PROPOSED 2013 BUDGET 2013 2013 2013 Projected Projected Projected Fund Resources Expense Balance Economic Development $458,699 $228,292 $230,407 Neighborhood Development (Housing) 2,054,609 1,426,035 628,574 Community Relations 1,366,966 914,911 452,055 Cemetery 284,466 264,296 20,170 Emergency Services 1,288,166 1,189,923 98,243 Public Safety Communications 3,631,945 3,49:,425 134,517 Police Grants 1,048,397 641,773 406,624 Downtown Improvement District 292,352 150,4:4 111,S 7S Trolley 10,545 3,935 6,610 Front Street Business Improvement Area 7,694 5,000 2,694 Tourist Promotion 1,836,302 1,471,299 365,003 Capitol Theatre 464,847 348,300 116,547 PFD Revenue - Convention Center 876,599 695,000 181,599 Tourist Promotion Area 735,722 667,000 68,722 PFD Revenue - Capitol Theatre 568,113 517,000 51,113 Stormwater Operating 2,998,442 2,069,059 929,383 Transit 9,592,775 7,970,772 1,622,006 Refuse 6,004,090 5,520,S76 483,214 W astewater 21,520,651 19,392,935 2,127,713 Water 10,446,676 8,488,311 1,958,365 Irrigation 2,231,150 1,493,006 738,144 Equipment Rental 10,176,394 5,867,352 4,309,042 Environmental 454,272 192,950 261,322 Public Works Administration 1,560,829 1,132,182 428,647 Total Other Operating and Enterprise Funds $79,910,707 $64,178,115 $15,732,592 See Exhibit I for additional detail of Other Operating and Enterprise Funds. The following chart depicts a summary of resources and expenditures for major operating and Utility fund operations for 2013, including contingency, operating reserve funds and employee benefit funds. Although Equipment Rental is included on the table above, it is split into an operating component and capital component for charting operating vs. capital budgets. 2 - Section III • Other Funds 2013 RESTRICTED OPERATING AND RESERVE FUNDS Dollar In Millions 2013 0 2 4 6 8 10 12 14 16 18 20 22 24 Division Projected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves, Risk Mgmt, Emp Benefits $18,368,614 ............... ............................... ............ .. ............................... Cap Theatre, Cemetery, Trust Rsys $24,437,761 Reserves,Chax.es W astetcater $19,392,938 $21,520,651 SewerRates • -ratin_ Reserves W ater/lrrigation $9,981,317 $12,67 7 ,526 Water Rates, Irrigation Fees, Resen-es Transit $7,970,772 ....................... ............................... $9,592,778 — 1111,,, Transit Sales Tax, Oper Grants, Fare Box Refuse $5,520,876 $6,004,090 — Ref use Rates Equipment Rental $3,856,657 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,885,625 _ Charges 0Resources Storm Water $2,069,059 $2,998,442 Stunmrater Fees Sp ecial Purpose, Housing, Emer Svs $13, 887, 501 ................................................................ ..............................: Public W ks Admin, Cable TV, Misc $17,523,3'0 Char es, Grants Taxes, Reserves Total Expenditures $81,047,734 Total Resources $98,640,543 OPERATING FUNDS For more information on strategic initiatives that affect these funds see the Section V, "Strategic Initiatives" The Economic Development Fund This fund reflects resources of $458,699 and expenditures of $228,292 for 2013. These funds are planned to be used to spur economic development. Expenditures include an allocation of Community and Economic Development positions and the continuation of Federal legislative funding efforts. The Community Development Fund (Office of Neighborhood Development Services - ONDS) This fund contains programs funded by Housing and Urban Development (HUD), including the Community Development Block Grant (CDBG) and Home ownership (HOME) grants. Expenditures are budgeted at $1,426,035 and are subject to the public hearing process. With the uncertainty in Budget allocations at the Federal level, the 2013 budget anticipates a 5°° reduction from 2012 program grants on top of the 17 °° reduction experienced in the 2012 grant awards. Because of the programmatic nature of the Community Development budget, along with differences in reporting time frame for Federal programs, the City budget is annually adjusted to reflect the final outcome of prior year programs. To stay within the administrative cap of the reduced grants, a Housing Specialist position was deleted from the 2013 budget. The 2013 ending balance is projected to be $628,574. Other Fluids • Section 111 -3 The Community Relations Fund The Community Relations fund expects resources of $1,366,966 for 2013. Expenditures are estimated to be $914,911, leaving the balance estimated at $452,055 for year -end, earmarked primarily for capital expenditure on production equipment / cable TV facilities. Included in the 2013 expenditure budget is $316,250 to outright purchase their facility from the Fire Department, which will support the Fire Capital program (see strategic initiative section). Cemetery Fund Resources within this fund for 2013 are projected at $284,466. Expenditures are estimated to be $264,296, and the estimated ending balance is projected at $20,170. The Cemetery Fund is depending on a $90,000 operational subsidy from the Parks and Recreation Fund. The Emergency Services Fund Resources in this fund reflect revenues of $1,288,166 and expenditures of $1,189,923 related to the provision of Emergency Medical Services, and are supported by an allocation of the county -wide special EMS Property Tax Levy The current tax levy will expire in 2013; however, it was approved by voters last fall to be renewed for another 10 years. The 2013 ending balance is projected to be $98,243. The Public Safety Communications Fund This fund expects resources of $3,631,945 and expenditures of $3,497,428 for 2013, leaving a balance of $134,517 at year -end. This fund accounts for 9 -1 -1 Call takers, supported by Yakima County 9 -1- 1 resources in the amount of $1,651,501. General Fund expenditures include a transfer of $820,000 for dispatch, which was increased by $80,000 because of a strategic initiative to increase the number of call takers by 2, so that the dispatch operation could focus more on their primary duty instead of back filling the call taking function. (See the strategic initiative section for an expanded explanation). Police Grants This fund accounts for the Federal / State forfeited narcotics and the COPS Hiring Recovery Program (CHRP), both of which have stringent reporting requirements. CHRP is a three year program grant started in 2010 with a total grant of $1.5 million and is being used to fund seven police officers. As grant funding is depleted, the officers will need to be absorbed back into General Fund. In 2013 about $300,000 was moved into General Fund as about three officers reached the 3 year grant maximum. Resources for 2013 are estimated to be $1,048,397 and expenditures are budgeted at $641,773, leaving an ending balance of $406,624. Downtown Yakima Business Improvement District (DYBID) Fund After a review of the Downtown clean and safe initiative and related parking issues in the downtown core, Council is recommending a restructuring of the DYBID, to cover a smaller boundary and eliminate long -term parking in the city -owned lots, and extend free parking from 2 hours to 4 hours in downtown. The legislative changes being recommended are on a parallel course with the budget review —the 2013 budget assumes these changes are implemented. Resources in this fund are projected to be $292,352, consisting of beginning fund balance of $112,000, and new Business Improvement District assessments of about $180,000, while expenditures are projected at $180,474. The ending balance for 2013 is projected at $111,878. Much of the 2013 budget is targeted toward maintaining the recent downtown revitalization efforts. 4 — Section III • Other Funds The Trolley Fund This fund projects resources of $10,548 and expenditures of $3,938 for a minimal maintenance program in 2013. The year -end balance is projected at $6,610. The Front Sheet Business Improvement Area Fund This fund projects resources of $7,694 and expenditures of $5,000 — leaving an ending balance of $2,694 for 2013. The Tourism Promotion / Yakima Convention Center Fund This fund's budget anticipates resources of $1,836,302 (this includes a transfer of $150,000 from the Public Facility District) and expenditures of $1,471,299, and thus is expected to end 2013 with a balance of $365,003. The budget includes an increase the Center's management fee (See strategic initiative section). The Capitol Theatre Fund This fund is expected to have resources of $464,847 and expenditures of $348,300, leaving an estimated ending balance of $116,547 The Public Facilities District — Convention Center Fund This fund includes resources estimated to be $876,599 for 2013. Expenditures are estimated to be $695,000. Of this amount $460,000 for debt service on the Convention Center bonds issued in 2002 and $150,000 is for supplemental support of Convention Center operations, while $70,000 is for Convention Center Capital Fund. This leaves a fund balance of $181,599 at the end of 2013. The Tourist Promotion Area This fund accounts for a self- assessment imposed by the lodging industry to promote tourism. Resources are estimated to be $735,722, with expenditures programmed at $667,000, leaving a balance at the end of 2013 of $68,722. This is one of the funds that has revenues subject to accrual at year end, so that the fund balance was increased by the accounting change. The Public Facilities District — Capitol Theatre This fund includes resources estimated to be $568,113 for 2013. Expenditures are estimated to be $517,000. Of this amount $448,000 is designated for debt service on the Capitol Expansion bond issued in 2012 and $57,000 for supplemental support for Capitol Theatre operations. This leaves a fund balance of $51,113 at the end of 2013. Stormwater Operating Fund Expenditures in this fund are estimated to be $2,069,059 and resources are projected to be $2,998,442 for 2013 (the budget is developed with the annual current rate of $43 per equivalent residential unit which is unchanged from 2012). An ending balance of $929,383 is currently projected for 2013. The expenditure budget includes a $241,615 final reimbursement to Wastewater Utility for its advanced funding of the Stormwater program, a $200,000 transfer to the streets fund to support the street sweeping program, and $50,000 to the General Fund for code compliance support relating to stormwater drainage systems. Other Fluids • Section III -5 Transit Fund Expenditures in this fund are estimated to be $7,970,772 and resources are projected to be $9,592,778 for 2013. Total Transit sales taxes for 2013 are forecast to be $4,700,000 with the $4.4 million allocated to operations and $0.3 million to capital. This fund also includes an operating grant of $2,394,909 An ending balance of $1,622,006 is currently projected for 2013. The Refuse Fund The expenditure budget in this fund for 2013 is $5,520,876. Total resources are estimated to be $6,004,090, and an ending balance is currently projected at $483,214. No rate adjustments are proposed for 2013. Wastewater Fund Resources for this fund in 2013 are expected to total $21,520,651. Expenditures are budgeted at $19,392,938 and the 2013 year -end balance is currently projected to be $2,127,713. Transfers of about $1.9 million to Wastewater Construction funds and $2.6 million to provide for Wastewater Bond redemption and repayments of Public Works Trust Fund Loans are currently programmed in this budget. The proposed 2013 Sewer budget includes continued implementation of the Sewer Comprehensive Plan and the Wastewater Facilities Plan. Revenues are estimated to increase by 5.1°° in accordance with the second year of a three year rate structure approved by Council in 2012. Water Fund Resources of $10,446,676 are projected for 2013 in this fund. Expenditures are estimated to be $8,488,311 leaving $1,958,365 at the end of 2013. These costs include $600,000 transfer to the Capital Fund, and about $635,000 to provide for Water Bond Debt Service, and repayments of Water Public Works Trust Fund Loans. The preliminary budget includes a rate increase, although further analysis indicates that a rate adjustment is not required in 2013. The final budget will reset revenue back to the 2012 rates, which will reduce the ending fund balance to about $1.5 million, over 17 °° of the 2013 budget, still exceeding the recommended 60 day reserve policy Irrigation Fund Resources for 2013 are projected to be $2,231,150 in this fund, and expenditures are estimated to be $1,493,006. The 2013 ending fund balance is projected to be $738,144. The 2013 projected resources include the rate adjustment of 5.5 °° rate increase (2011 approved policy issue — 5.5 °° annual rate increase from 2011 through 2014. The Equipment Rental Fund The budget for this fund in 2013 is $5,867,352 of which $3.7 million is the maintenance and operations budget, and $2.1 million is the Equipment Replacement budget. Resources are expected to be $10,176,394 while the ending fund balance for 2013 is expected to be $4,309,042, most of which represents capital equipment replacement reserves. The Environmental Fund This fund was created to provide for cleanup of environmental hazards. Funding for the program is from a surcharge on vehicle fuel sales in the Equipment Rental Fund. For 2013, $454,272 in resources is expected to be available and $192,950 is budgeted primarily as a contingency A year- end balance of $261,322 is projected. 6— Section III • Other Funds Public Works Administration Fund Expenditures for 2013 are expected to be $1,132,182 for this fund. Resources for 2013 are expected to be $1,560,829 generated from operating funds located in the Public Works complex, resulting in a year -end balance of $428,647 One Department Assistant II position was eliminated as a cost containment measure. RESERVE FUNDS — ENIPLOYEE BENEFIT RESERVES The Unemployment Compensation Reserve Fund This self insured fund is estimated to end 2013 with a balance of $175,821. Resources are projected to be $468,825 and expenditures for claims and other related expenses are estimated at $293,005, a 37.6 °°increase over the 2012 year end estimate of $212,964. Rates are unchanged for 2013. Employees Health Benefit Reserve Fund Expenditures in this fund for 2013 are projected to be $11,625,339, while resources are $14,202,630, leaving an ending balance projected to be $2,577,292, which approximates the State's minimum reserve and contingency requirements. The 2013 budget includes a rate adjustment of an average of 17.6 °0 for medical and 4.2 °0 for dental, based on an 18 month rolling average of claims history ending in June 2012. The insurance board continues to monitor the plan and review potential cost containment measures, with a goal of reducing the magnitude of future annual premium increases. The next major proposal for reduced costs is to operate our own medical clinic. Incentivized wellness programs are also on the horizon. The Workers Compensation Reserve Fund This fund is estimating a year -end balance of $791,265, the result of resources totaling $2,033,537 and expenditures of $1,242,272. Ongoing efforts in claim management and safety training are in place to slowdown the number of claims /costs. Rates are unchanged for 2013. Wellness /Employee Assistance Program (EAP) Fund Projected total resources for 2013 are $159,316 in this fund, and expenditures are $93,700 with a projected year -end balance of $65,616. The Firemen's Relief and Pension Fund This fund is projecting resources of $2,247,194 and expenditures of $1,347,493, leaving an estimated 2013 year -end balance of $899,701. The Fire Pension property tax allocation for 2013 of $1,315,000 is the same amount as the 2012 year- end estimate. The City is mandated to allocate property tax to fund pension and LEOFF I medical and long -term care requirements. OPERATING RESERVES Risk Management Reserve For 2013, based on personnel costs, claims experience and other insurance /professional services costs, on -going expenditures are estimated to be $3,189,378. Risk Management Fund departmental Other Fnruis • Section III -7 contributions totaling $2,981,000 are programmed from City departments, an increase of 7.0 °° for most operating divisions. The increase helps pay for liability and other insurance coverage and increased claims costs, and to meet reserve requirements. These charges, along with interest earnings of $100,000 combine for projected 2013 revenues of $3,081,000 for normal operations. In addition to on -going operations, the 2013 revenues and expenditures include $0.5 million for anticipated possible mitigation of contamination from the former City landfill at the sawmill site. At this time, mitigation expenses are anticipated to be reimbursed by corresponding insurance recovery revenue. Therefore, total resources and expenditures of the Risk Management Reserve Fund for 2013 are expected to be $4,451,414 and $3,689,378 respectively The year -end 2013 reserve balance is estimated to be $762,037 These reserve levels are still considered marginal in comparison to the existing liability for incurred claims. The reserve balance in this fund will continue to be monitored for adequacy General Contingency Reserve This fund was moved to the General Fund due to GASB 54 which requires the City to classify its fund balance based on spending constraints imposed on use of resources. Capitol Theatre Reserve The Capitol Theatre Reserve projects revenues for 2013 of $500. The annual transfer to the Capitol Theatre Operating Fund Reserve of $71,927 is continuing although interest earnings are at minimum levels because of market conditions and the reduction of the principal balance. The projected 2013 ending balance is $170,995, and will be totally depleted after about 2 years if this program continues at this level. General Fund Cash Flow Reserve General Fund cash flow reserves for 2013 are estimated at $8,483,666. This source is a contingency for unbudgeted policy issues, results of negotiations for unsettled bargaining units, other unknown expenses and potential revenue shortfalls. In summation, the City's 2013 General Reserve position is estimated to be as shown in the following chart. 2013 GENERAL RESERVE POSITION 2011 2012 2013 Fund Actual Estimated Projected General Fund Cash Flow 8,440,130 8,483,190 8,483,666 Capitol Theatre Reserve 313,849 242,422 170,995 Risk Management Reserve 848,892 865,415 762,037 Total $9,602,871 $9,591,027 $9,416,698 The economic downturn has put pressure on the general reserves of the City Because these reserves are at minimum levels, they will be scrutinized for negative trends and adequacy as the City moves forward. 8 — Section III • Other Funds Exhibit I contains additional detail of funds categorized as Contingency /Operating and Employee Benefit Reserves. CAPITAL IMPROVEMENT FUNDS For 2012, a number of capital improvements were programmed for an amended capital budget of $52.4 million. However, capital improvement expenditures for 2012 were estimated to be $27.0 million, a spending level approximately $25.4 million below budgeted levels. These projects are rebudgeted in 2013 along with additional capital improvements. Examples of the projects being rebudgeted include the Railroad Grade Separation; 64th Avenue Nob Hill to Tieton reconstruction; Automated Meter Reading; Congdon wastewater main; New Secondary Clarifier Sr Flow Distribution, Biogas Enhancements; Biosolids Improvement; and Irrigation system refurbishment. (See Exhibit I for a summary of the status of the capital funds.) The following describes the relationship of resources and expenditures for major capital budgets of the City, including debt service and the capital portion of the Equipment Rental Fund. 2013 RESTRICTED CAPITAL AND DEBT SERVICE FUNDS Dollars in Millions 2013 Division Projected 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 Streets $23,17 0,847 ....... ......... ......... ......... ......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,258,022 Reserves, Grants, .5 Gas Tax, REET, Bonds Wastewater $22,025,357 $27,856,541 Resers es,Char: es, Loans W ater/lrrigation $7 Soo 508 ................. ............................... $12,839,967 Reserves, Charges, Loans Transit $545,500 $1,696,129 Reserves, Taxes, Grants ® Total Expenditures Equipment Rental $2,010,695 O Total Resources $6,290,769 -, Reserves, Charges Storm Water $435,000 $1,273,913 Reserves, Charges Sp Purp Cap, Misc G.O. Debt $6,790,591 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,847,887 _,,,,,,,' Reserves, Grants, Taxes, Loans Total Expenditures $62,803,798 Total Resources $85,063,228 For 2013, Capital Fund expenditures of $54,834,157 are estimated as follows, inclusive of carryover projects from 2012. Street /Other Infrastructure Improvement Projects Total projects of $22,482,581 million (including carryover projects and Debt Service). 64th Avenue , Nob Hill to Tieton Street Improvement (carryover, Federal grant) — $925,000 Other Fnruis • Section III -9 • River Road Improvement (State grant, contributions) — 6th Ave. to 16th Ave. - $1,204,421. • City Streets Project Improvement (General Obligation bond) - $5,000,000. • Railroad Grade Separation (State and Federal grants; Public Works Trust Fund loan) — $12,194,500. . Debt Service — $1,293,760 • Other miscellaneous projects — $1,864,900. These projects include: • Project Contingency (for project over runs or emergency repairs) - $105,000 • Citywide Safety Improvements (Federal Grant) - $375,000 • Lincoln Corridor Study (Federal Grant) - $405,000 • North 1Pt St. Revitalization Phase I (Federal Grant) - $279,000 • Franklin Park Parking Lot - $145,000 Arterial Street Gas tax and the Real Estate Excise Taxes are the primary local revenue sources for street projects. These revenues are used to match state and federal grants when possible to maximize funding for projects. Irrigation Improvement Fund Total 2013 projects — $125,000 and Debt Service - $908,304, for a total of $1,033,304. • Fruitvale Canal Diversion System — $75,000 • Pumping Systems Improvement — $50,000 Domestic Water Improvement Fund Total 2013 projects — $6,235,000. • Design Water Treatment Lagoons — $3,000,000 (funded by Public Works Trust Fund Loan) . 2013 Water Main Replacement — $150,000 • Automated Meter Reading System (carry over plus additional project cost / shared with Wastewater, partly funded by Public Works Trust Loan) — $3,000,000 • Other water capital projects — $85,000 Fire Capital Fund Total 2013 projects — $194,896. • Miscellaneous equipment and supplies — $126,500 • Lease payments - $68,396 Wastewater Capital Expenditures Facility projects and other sewer improvements, including sewer line extension rehabilitation and other costs, total $20,455,000. • Congdon Sewer Main (carry over) — $100,000 • Wastewater System Evaluation - $100,000 • Automated Meter Reading System (shared with Water) — $1,165,000 . Dry Storage Building - $200,000 • Speedway /Race Street Interceptor (additional project cost) — $1,700,000 • New Industrial Waste Line (Force main Boise site) - $2,200,000 10 — Section III • Other Funds • Toscana Development Castlevale/Fechter (carry over) - $300,000 • National Pollutant Discharge Elimination System (NPDES) and Total Maximum Daily Load (TMDL) Issues — $1,300,0000 • Industrial Waste Anaerobic (carry over) - $50,000 • Biogas Enhancements (carry over) - $700,000 • Biosolids Improvements (carry over /additional project cost) - $5,000,000 • Yakima Regional Wastewater Treatment Plant UASB Sr electrical improvement - $6,510,000 • Other Wastewater miscellaneous capital needs (including a $600,000 contingency) — $1,130,000 Stormwater Capital Fund Total 2013 budget — $435,000. • Contingency for Capital Facilities projects— $125,000 • J Street Low Impact Development (LID) — $15,000 (state grant — joint project with Yakima County) • Underground Injection Control (UIC) Retrofit project (carry over) - $115,000 (state grant) . Buchanan Lake Filter - $180,000 Transit Capital The 2013 budget of $545,500 is for miscellaneous capital needs and vehicle replacement. . Replace Dial -a -ride vehicles — $240,000 • Vanpool Vans/Trucks/Bus - $247,500 • Other capital needs — $58,000 Parks Improvements Projects The 2013 budget of $25,000 is for miscellaneous capital needs. Yakima Revenue Development Area The 2013 budget of $2,509,240 is for the Yakima Sawmill Redevelopment Area project. Other Capital Projects/Transfers • Law and Justice Capital fund — $532,636 for the Police Station / Legal Center related equipment and projects including: • Vehicle replacement — $300,000 • Technology and Equipment to enhance crime reduction — $51,636 (Federal grant) • Safety and communication equipment for mobile units — $35,000 • Other miscellaneous projects and equipment — $146,000 • Convention Center Capital Improvements — $295,000 is programmed for ongoing capital needs of the Center for 2013. • CBD Capital Improvement - $91,000 for maintenance contract and other services. LID Construction There are no local improvement district projects budgeted in 2013. Other Fluids • Section III —11 Capital Improvement Fund Summary Overall, Capital Fund expenditures in the 2013 Budget Forecast of $54.8 million are $2.4 million above the 2012 Amended budget of $52.4 million. Many areas are in the midst of capital programs such as the utilities and streets (including the major upgrades to the wastewater facility, which is under construction in 2012). In some instances, the "next" phase as included in the 2013 budget is more than 2012, such as automated meter reading and the wastewater industrial waste line. Ongoing pressures on revenues available for General Government Capital funds have pushed spending down in Parks, Fire and Law Sr Justice. The Fire Department has requested an ongoing source of funding for apparatus replacement. Ongoing resources for capital needs have been diminishing, and this topic will likely remain in the forefront of future budget discussions. Because of the major capital projects in the wastewater utility, the startup of the 2 railroad underpass on Martin Luther King Jr. Blvd., and beginning of installation of the automated meter reading system, the 2013 budget is slightly more that the 2012 amended budget. GRANTS The City has been successful in obtaining grants for many different purposes. The following table identifies all of the grants /interlocal revenues budgeted to be received in 2013. Citywide, grants add to over $28.6 million, which is about 15°° of total revenues. This grant summary is included in the Capital Improvement section because Capital grants make up over half of the total grants awarded. Grants make up about 26 °° of revenue in the Capital Improvement funds. 2013 GRANTS (Federal, State Sr Interlocal Subsidies) Amount Department Description of Grant Fe deral/State Capital Grants Law&r Justice Capital JAG Grant $41,636 Arterial Streets River Rd Impr 6th Ave to 16th Ave 639,000 Arterial Streets Fair Ave /Nob I-Iill Intersection Rebuild 34,525 Arterial Streets N 1st Street Revitalization Phase 1 250 ,000 Arterial Streets Citywide Safety Improvements 375,000 Arterial Streets Lincoln Corridor Safety 32nd to 5th 405,000 Arterial Streets 64th Ave - Nob I-Iill to Tie ton 725,000 Cum Re s for Capital Improvement TIB Railroad Grade Separation 3,000,000 Cum Re s for Capital Improvement Federal Highway Admin RR Grade 5,628,000 Cum Re s for Capital Improvement Freight Mobility -RR Grade Separation 2,000,000 Transit Capital Dial -A -Ride Vehicles 192,000 Transit Capital Vanpool Vans 96,250 Stonmwater Capital Department of Energy Grant 50,000 Stonmwater Capital J Stre et LID Demonstration Project 120 ,000 Total Federal/State Capital Grants $13,556,411 12 — Section III • Other Funds Amount Department Description of Grant Federal /State Operating Grants - General Government Police St Criminal Alien Assistance Program Grant $20,000 Police Traffic Safety Commission 40,000 Police OPD Public Defense Grant 145,000 Police ARRA- COPS Grant 290,:11 Parks and Recreation Senior Center - Foot care 30,200 Parks and Recreation State Day Care CFDA 93 044 10,000 Parks and Recreation State Transportation CFDA 93043 500 Parks and Recre ation ALTC Reimbursement SCSA State Res 30,900 Municipal Court Judicial Salary Contribution 45,000 General Fund Property Taxes 6,760 Total Federal /State Operating Grants - General Government $619,071 Fe der at State Operating Grants - Other Funds Community Development Community Development Block Grant $843,202 Community Development HUD HOME Program 373,908 Transit UNITA- Current Tear per Grant 2,394,909 Transit CMAQ DOT Sunday Service 166,786 Transit Commute Trip Pass Thru\VSDOT 10,000 Emergency Services Department of Health - Pre -hospital Grant 1,;26 Total Federal State Operating Grants - Other Funds $3,790,531 Federal Entitlements PFD Capitol Theatre Capitol Theatre - Build America Bond Subsidy $108,896 State Shared Revenue Police Criminal Justice - High Crime $290,000 Police Criminal Justice - Violent 95,000 Police Criminal Justice - Spe cial programs 56,000 Police MVET DUI Payment 17,000 General Fund Liquor Excise Tax 77,000 General Fund Liquor Board Profits 800,000 Economic Development City Assistance 54,000 Parks and Recreation Criminal Justice - Special Programs 20,400 Streets Gas Tax 1,293,000 Arterial Streets Arterial Street Gas Tax 604,000 Firemen Relief & Pension Fire Insurance Premium Tax 65,000 Total State Shared Revenue $3,371,400 Other Fluids • Section III —13 Amount Department Description of Grant Intergovernmental Contract / Se nice Police Police - Fairgrounds $10,000 Police Resource Officers 588,000 Police Yakima Housing Auth Law Enforcement Svcs 58,840 Police Selah Jail Contract 1,500 Police Union Gap Jail Contract 5,000 Fire Fire - EMS District #10 34,500 Fire Fire Investigator Se nice s 500 Fire Fire Training Programs 2,400 Fire Fire Training Se nice 8,000 Traffic Engineering Engineering Services 500 Purchasing Purchasing Se nice 270,105 Emergency Se nice EMS Levy 1,193,000 Public Safety Communications Fire District #10 24,000 Public Safety Communications 911 Se nice Contracts 1,651,501 Public Safety Communications Fire Dispatch Services 216,376 Public Safety Communications Information Technic al Se nice 45,552 Public Safety Communications Police Dispatching Se nice 132,846 Public Safety Communications ET Maintenance - Contract 7,827 Public Facilities District Public Facilities District Revenue 700,000 PFD - Capitol The atre Public Facilities District Capitol The atre 528,000 YAKCORPS IPPS Assessment 511,700 YAKCORPS Intergovt IS Se nice 24,000 Transit Selah Transit Bus 200,000 Transit Selah Transit Dial -a -Ride 50,000 Yakima County SI ED Inte ducal Grant 925,000 Total Intergovernmental Contract / Se nice $7,189,147 Total 2013 Grants and Other Subsidies $28,635,456 14 — Section III • Other Funds GENERAL GOVERNMENT BUDGET STRATEGY As the 2013 budget was developed, all revenue estimates were reviewed and updated for more recent trends, and known changes were incorporated in the expenditure budget. After all known changes were made, and the strategic initiatives were included, the General Government budget was still out of balance by about $1.4 million. At that point the balancing strategies as outlined in the Five Year Financial Plan were implemented. The following is a summary of the original plan, compared to the elements that were incorporated into the 2013 budget. GENERAL GOVERNMENT BUDGET REDUCTIONS 2013 Preliminary Forecast Budget Original 5 -Tear Plan Bridget Gap ($1,500,000) ($1,41:,000) Expenditure Options Wage Sr Benefit Concessions 300,000 304,000 Airport Fire Service (AARF) 200,000 220,000 2 Vacancy Rate 800,000 730,000 Attrition /service reduction 200,000 163,000 Net Budget 1,500,000 1,417,000 Detail of Reductions to Balance Wage and Benefit Concessions - Deferred Compensation Non - represented and AFSCME (304,000) 3 Vacant Firefighter Positions Eliminated Airport Rescue vehicle staffed by Overtime (220,000) Attrition /Service Reductions (Vacant) Administrative Assistant - Community Development (:5,000) DAB Public Works (Reduces PW Admin Charges) (45,000) Information Technology Position (Keep Vacant 6 months) (40,000) Vacancy Rate-ro of Gen Gov salary and benefits, w /out Med or Dental (730,000) Total Bridget Balancing ($1,41:,000) Wage and Benefit Concessions As bargaining units negotiate wages and benefits, we will be asking for zero cost -of- living wage growth and benefit concessions — AFSCME has already discontinued longevity and deferred compensation for new hires, and legislation is being prepared to discontinue these same two benefits for unrepresented new hires. The plan assumes termination of the City's deferred compensation benefits program, with a current cost of $1.5 million annually, subject to collective bargaining negotiation. The reduction is estimated to be $300,000 for General Government operations in 2013 growing to $1.5 million by 2016. The 2013 preliminary budget was built assuming a negotiated reduction of benefits of $304,000. Negotiations are currently in progress, however at this point in time, it does not appear that there Balanced Budget Options • Section IV -1 are any concessions forthcoming in time to be implemented in 2013. Therefore, for the final budget, there will be five (5) additional personnel attrition /reductions to make up the required $304,000. Airport Fire Service (AARF) Decrease cost of providing Aircraft Rescue Fire Fighting (ARFF) to the Yakima Airport. The Fire Department provides a dedicated ARFF person at the airport for aircraft incidents 24 hours a day 365 days per year. This requires 3 full time positions to facilitate (one per shift). The FAA requires ARFF standby 15 minutes prior to take off and after landing of commercial aircraft of the size that use the Yakima Airport. (The Seaport airline is not of size to require ARFF standby). The three personnel that staff the ARFF apparatus would be eliminated through attrition of firefighting personnel. The ARFF coverage would then be provided using overtime to hire off shift personnel but only during the times of landing and departure. This would require 4 hours of overtime per day for 365 days Fiscal Impact: Eliminate 3 Firefighter positions (and daily stipend) ($280,000) Increase in Overtime S60,000 Net Budget Reduction ($220,000) 2% Vacancy Rate Historical vacancy /turnover rate for the City is between 4 and 5 To more accurately budget for salaries and benefits, the Plan stipulates that the budget reflect the estimated savings in personnel expenses attributable to vacancies, attrition, leave of absences and turnover. All authorized positions are generally not filled throughout the fiscal year, reflecting in savings from short -term vacancies, under - filled positions, and newly hired employees starting at lower salaries and benefi By instituting a 2 °0 personnel vacancy rate in General Government, the City can avoid budgeting about $730,000 in 2013, up to $1 million in 2016. The plan originally identified $800,000 savings in 2013. However, the City uses the budgeted medical "premiums" of vacant positions to fund its wellness programs and maintain minimum reserves in the self- insured medical program, if needed. The 2 °0 vacancy rate was conservatively estimated assuming medical premiums are used in this manner. Attrition /Service Reduction The Community Development Office Assistant position in the Department of Community Development is eliminated from the 2013 budget as a budget reduction measure. Core and essential administrative duties of this position will be combined with the Planning Technician position in 2013 to consolidate the responsibilities of these two support positions. The modified position will provide administrative support to the Director of Community Development as well as the technical support to the Planning Division. The Public Works front staff Department Assistant team experienced 3 turnovers in 2012 with the retirement of one, promotion of one to another Department, and one resignation to change careers. One of these positions mainly provides customer service for Tahoma Cemetery but can provide coverage in the event it is needed. The vacancies all came about in relatively the same timeframe. 2 — Section IV • Balanced Budget Options One of the three front desk DA II positions was eliminated accommodating 2013 budget constraints. There is a budgeted temporary position along with the one full time position that remains. With those FTE's and the incorporation of Sports Site internet parks registration and reservation program, we will handle the work as efficiently as possible. Information Technology Services had originally budgeted for three positions; Applications Support, Systems Administrator (both budgeted and unfilled in 2012 due to budget constraints) and a Telephone /network technician (new in 2013). Previously, to assist in maintaining 2012 budget level into 2013 we had deferred the Applications Support position to 2014. Now additionally, we have deferred the filling of one of these two remaining position for 6 months. These positions are part of our continuing effort to reorganize the division with classifications that have the skill sets for current and future technology demands. By deferring the filling of these positions we are slowing down that conversion which does limit progress on our strategic goals and slows the implementation of systems /programs that will make the City's technical operations more efficient and cost effective, but we will be able to maintain with the current staffing and not digress in the initiatives we have already started and /or completed. Balanced Budget Options • Section IV -3 4 — Section IV • Balanced Budget Options STRATEGIC INITIATIVES All Initiatives are Budgeted for 2013 CITY ADMINISTRATION Proposed Personnel Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel S/P Community Relations Fund Purchase YCTV Y- Comm. Rel. Fund $316, 250 PS PAC Building from Fire Fire Capital Fund Revenue 316,250 LEGAL Proposed Personnel Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel S/P Increase Indigent Defense Contract General Fund $347,500 PS Add One Prosecutor Positions and Increase Temporary Salaries 115,000 $14,850 Total 2013 $46 2,500 MUNICIPAL COURT Proposed Personnel Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel S/P Reinstate Cashier Position General Fund $54,000 PS FINANCE Proposed Personnel Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel S/P Implement Governmental Accounting Standards PT Board (GASB) rules into budget a) Adjust the fund balance to include the General Fund $3,837,819 sales tax accrual for the underlying Streets & Traffic 20 2,330 transaction dates Arterial Street 94,603 Tourist Promotion 1_29,617 b) Eliminate separate Contingency Fund City -wide Total $4,264,369 Policy Issues • Section V —1 COMMUNITY AND ECONOMIC DEVELOPNIENT Code Administration Proposed Personnel Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel S/P Add One Project Coordinator Position $67,000 BE. PT Wastewater (50 °°) 33,500 Water ( 20 °°) 13,400 Irrigation (5 °°) 3,400 GF Impact ( 25 °0) $16,700 Increase in Convention Center Management Fee Convention Center $15,300 ED Operating Fund - PFD Revenues POLICE Proposed Personnel Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel S/P Expand Gang Unit - staggered implementation General Fund $118,000 2013 PS Add 2 Officers (101 13) Add 2 Civilians/Transfer 2 Officers (5/1 13) Upgrade Sergeant to Lieutenant (7 1 13) $328,000 Annualized Add One Additional Police Officer — to service on General Fund $20,000 2013 PS Violent Offender Task Force (VOTF) (to be funded in the Final Budget) $97,500 Annualized Replace 12 Police Vehicles General Fund $60,000 PS Law & Justice Cap. 300,000 $360,000 Add Two 9 -1 -1 Call Taker Positions 9 -1 -1 Contract $45,000 PS General Fund 80,000 Transfer for Dispatch $125.000 2 — Section V • Policy Issues FIRE Proposed Personnel Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel S/P Lease /Purchase Fire Apparatus to be repaid over State /Local Program $375,000 PS 10 years — Fire Capital General Fund Debt Svc - $40,000 Reinstate Fire Inspection Program General Fund Expend. $165,000 PS Note: Additional review indicates the total Revenue 165 000 program cost will be $176,000. The final budget $0 will be adjusted for both Revenue & Expend. UTILITIES & ENGINEERING Engineering Proposed Personnel Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel S/P Engineering Plan Review & Inspection Fee General Fund Revenue $100,000 Increase Water/Wastewater/Irrigation Proposed Personnel Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel S/P Asset I\lanagement Software System Wastewater Fund $ 200,000 2013 BE $100,000 2014 Wastewater Proposed Personnel Policy Issue Request /Justification Funding Source Salary / Benefits Non - Personnel S/P WWTP Security Upgrade Wastewater Capital $ 200,000 2013 BE Fund $100,000 2014 Biosolids Screen Project (Not in 2013 budget — Wastewater Capital $ 2,125,000 2014 PS requesting an extension from Dept of Ecology) Fund Policy Issues • Section V — 3 PUBLIC WORKS Parks & Recreation Proposed Personnel Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel S/P Fee Increase Parks & Recreation Revenue $43,500 Fund Transit Proposed Personnel Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel S/P Purchase 8 Dial -A -Ride Replacement Expansion State of WA $19 2,000 Vehicles Transit Cap Fund 48,000 $240,000 Dial -A -Ride Service Reduction WSDOT Expenditure Savings. Transit Oper. Fund $15,000 Equipment Rental Proposed Personnel Policy Issue Request / Justification Funding Source Salary / Benefits Non - Personnel S/P Fleet Vehicle Additions and Replacements Equipment Rental $1,560,000 Streets Replacement Fund 10 Ton Steel Roller w'Trailer $75,000 Self Prop Asphalt Paver w'Trailer 175,000 10 Yard Dump Truck 200,000 Water 2 Small /midsize PU Evt Cab (4\°_) 50,000 Refuse Side Loading Refuse Truck Refit 175,000 Front Loading Refuse Truck 280,000 Flatbed Truck w'TonmlyLift 65,000 2 4 Ton (4>4) PU w'TonmlyLift 90,000 Wastewater Combination Sewer Cleaner 450,000 Total $1,560,000 S/P - STRATEGIC PRIORIT7 LEGEND Economic Development ED Public Trust and Accountability PT Public Safety PS Partnerships PA Built Environment BE 4 — Section V • Policy Issues CITY ADMINISTRATION / COMMUNITY RELATIONS 2013 STRATEGIC INITIATIVE PURCHASE YCTV /Y -PAC BUILDING BUDGETED PROPOSAL In 1998, the City's Community Relations Division offices, including production facilities for Yakima Community Television ( "YCTV ") and Yakima Public Affairs Channel ( "Y- PAC ") relocated from a decommissioned City fire station at 103 South 7'h Avenue, which was an asset of the City Fire Capital Fund at the time, to its current location at 124 South 2nd Street. To facilitate the relocation, the City completed a transaction that resulted in the City assuming ownership of the property and building on 2nd Street (as an asset of the City Fire Capital Fund) and a private developer assuming ownership of the decommissioned fire station and associated property on 7th Avenue. Since that time, the Community Relations Division has been making a monthly lease payment of approximately $1,300 per month to the City Fire Capital Fund for use of the property and building on 2nd Street while also accruing sufficient reserves to ultimately purchase the property and building. This policy issue proposes an interfund transfer from Community Relations Fund reserves to the City Fire Capital Fund in the amount of $316,250, which represents the 2012 assessed value of the 2nd Street property and building, plus 10°° to arrive at an estimated market value. The additional 10 °° of the assessed value has been included in the proposed interfund transfer amount based on advice provided by the Yakima County Auditor's office. Upon completion of the transfer, the property and building on 2 Street would become an asset of the Community Relations Fund and the Community Relations Division budget would no longer include lease payments to the City Fire Capital Fund. In turn, the City Fire Capital Fund would receive a much - needed infusion of resources. IMPACTS 1. Fiscal Impact - One -time interfund transfer of $316,250 from Community Relations Fund reserves to the City Fire Capital Fund. 2. Proposed Funding Source - Community Relations Fund reserves. 3. Public Impact - The City Fire Capital Fund would receive a much - needed infusion of resources which would be used to meet the emergency response needs of the community 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7 Viable Alternatives - The Community Relations Fund could continue to make lease payments to the City Fire Capital Fund. Policy Issues • Section V -5 LEGAL 2013 STRATEGIC INITIATIVE ADD ONE PROSECUTOR POSITION & INCREASE TEMPORARY SALARIES BUDGETED PROPOSAL This proposal is to add an experienced prosecutor position, an entry level prosecutor position and to increase the Prosecution Division temporary salary budget. The experienced prosecutor would manage a Pre - filing Diversion Program and a Charging Unit, the entry level prosecutor position to cover additional court calendars and to provide equity in caseload management, and the increase to the Prosecution Division temporary salaries budget line item by $10,000 would fund a part time temporary legal assistant position to support the new Program and Unit. On June 15, 2012, the Washington Supreme Court adopted a revised CrRLJ 3.1 which sets new standards for the defense of indigent persons (public defenders). Most of the Rule goes into effect on September 1, 2012. However, the portion of the rule that will most significantly and financially affect the City of Yakima, the caseload limits, does not go into effect until September 1, 2013. The new caseload limit standard for attorneys providing indigent defense services in misdemeanor cases on a full time basis is 300 cases per year, if the contracting agency employs a case weighting system, and 400 cases per year, if no case weighting system is used. All Court Rules, including the new revised indigent defense standards, are enforced by the Court and apply to all licensed attorneys who appear in court. This rule will apply to indigent defense providers appearing in the City of Yakima Municipal Court. If the City does nothing to prepare for the Rule, and assuming that the caseloads remain relatively constant (it is anticipated that the YPD officer positions approved by Council last year will increase the Prosecution Division caseload), the City of Yakima would require the services of 15.5 full time indigent defense providers (or a combination of full time indigent defense attorneys and part time indigent defense attorneys equivalent to 15.5). The City currently contracts for the services of 5 full time indigent defense attorneys at the cost of $475,000. To comply with the rule, the City would need to secure the services of at least 10.5 additional full time defense attorneys. The Prosecution Division proposes to reduce the number of indigent defense attorney case assignments using two strategies: 1) the implementation of a Pre - filing Diversion Program, and 2) the implementation of a Prosecution Charging Unit. It is estimated that between these two programs we could reduce the filings; from 5,150 to 3400. If such an overall reduction were accomplished, the potential effect would be a reduction in the number of additional indigent defense attorneys required to handle new cases from 7.5 to 3.5 A charging unit would allow a more thorough review of cases prior to their filing. Poor cases that don't meet the charging criteria, cases that are not viable, low priority cases, and cases in which the defendant would be eligible for the pre- filing diversion program would be sifted out prior to being filed with the court. The County implemented a charging unit in 2010 and experienced a marked reduction in case numbers. Their case filings went from 6077 cases in 2009 to 3571 cases in 2010; a reduction of 2,500 cases. 6 — Section V • Policy Issues This proposal is to add two prosecutor positions; an experienced prosecutor position to manage a Pre - filing Diversion Program and the Charging Unit and an entry level prosecutor position to cover the additional court calendars and equity in caseload management. Each prosecutor is currently handling a caseload of at least 1,700 (not including referrals, dog and car impound hearings and contested infractions). The entry level position could be a temporary position to allow evaluation of the need once the caseload has been reduced and would not be added until later in the year. It will take some time to close out the existing cases and reduce prosecutor caseload. As previously mentioned, prosecutors are carrying heavy caseloads. They will be struggling to meet the workload demands of indigent defense attorneys who will have less than a quarter of a prosecutor's caseload when the Rule changes become effective. There will also be a need for legal assistant support for the Pre - filing Diversion Program and the Charging Unit. However, once the Legal Assistants have mastered the new case management program, I believe a temporary part time Legal Assistant could fill that role, initially, so that we can fully evaluate the need prior to hiring a permanent employee. The Prosecution Division temporary salaries line item would need to be increased by $10,000 to fund the position for a full year. IMPACTS 1. Fiscal Impact — Cost savings: The cost of securing the services 4.5 defense attorneys to handle new case filing. Yearly costs: Salary costs for an attorney are shown below Assistant Attorney II position $100,000 Bar Dues, Training, Computer, Misc. 5,000 Prosecution Division Temporary Salaries 10,000 Subtotal - Legal Prosecution Division 115,000 Indigent Defense Contract Increase 347,500 Total 2013 Increase $462,500 2. Proposed Funding Source — General Fund 3. Public Impact — Overall budget savings, better use of prosecution resources and long term control of indigent defense costs. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — Implement Prosecution Charging Unit and Pre - filing Diversion Programs. YPD Officers will need to receive training on new charging procedures. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — None. Policy Issues • Section V — 7 MUNICIPAL COURT 2013 STRATEGIC INITIATIVE REINSTATE CASHIER POSITION BUDGETED PROPOSAL The Municipal Court seeks to reinstate the Cashier position that was a budget reduction casualty in 2009 Reinstatement of this position will enhance customer service at the payment window of the Municipal Court Clerk's office by expanding the hours of access by the public, while permitting the court clerks to allocate their paraprofessional skills in a more efficient manner. A cashier position was established in the Municipal Court in 2008 dedicated to "front counter customer service duties" in a court setting. Examples of such clerical functions are accepting and receipting payments, recalling bench warrants, criminal and infraction citation data entry, and reporting information to the Washington State Department of Licensing impacting a defendant's privilege to drive. With the deletion of this key position from the court's budget, lack of resources resulted the closure of the payment window for four hours per day to allow court clerks to process court filings and perform other constitutionally mandated time sensitive functions in the administration of criminal justice. The hours for the customer service window have been 9:00 am to 11:00 am and 1:30 pm to 3:30 pm since 2009 These hours severely limit access to justice and cause an extreme inconvenience to the public, as evidenced by the snaking lines congesting the lobby of the Center for Law and Justice as well as interfering with counter traffic at the Police Department. The reduced hours also do not accommodate those who attempt to conduct court business during their lunch hours. Reinstatement of the cashier position will permit the customer service window to remain open continually during regular business hours, including the lunch hour. Reinstatement of the Cashier position will enhance the delivery of court services to the public, and permit the court clerks to dedicate their time to core paraprofessional duties in and out of the courtroom, thereby reallocating human and monetary resources in a more efficient manner. IMPACTS 1. Fiscal Impact — Approximately $54,000 per year. 2. Proposed Funding Source — General Fund. 3. Public Impact — Reinstating this position will have a positive public impact as the public will have greater access to the Municipal Court during the regular business hours. 4. Personnel Impact — Permit reassigning court clerks more consistently to core paraprofessional duties in support of the administration of justice. 8 — Section V • Policy Issues 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — Municipal Court Judges recommend that the City Council reinstate the Municipal Court Cashier position. Policy Issues • Section V — 9 FINANCE 2013 STRATEGIC INITIATIVE IMPLEMENT GOVERNMENTAL ACCOUNTING STANDARDS BOARD RULES BUDGETED PROPOSAL Change Budgeted Fund Balances to match Generally Accepted Accounting Principles (GAAP) The Governmental Accounting Standards Board (GASB) is the organization that sets accounting and financial reporting rules for governments. In recent years, the GASB has issued several proclamations that have had an effect on our financial statement presentation. Several years ago, GASB Statement 33 gave direction on reporting "derived tax revenues ", which addressed the timing of recognizing revenue of assessments on exchange transactions, such as sales tax or utility tax. In general, this new rule stated that revenue should be recognized when the underlying transaction takes place — i.e. when the sale is done. Because there is a 2 month lag in sales tax collected by the City, and a 1 month lag in utility tax collection, the City added 2 months of sales tax and 1 month of utility tax in the year of implementation in the Comprehensive Annual Financial Report (CAFR). However, because there was no change in the underlying economic condition of the City, we conservatively maintained budgeted fund balances at the pre -GASB 33 levels. This resulted in the General Fund balance reported in the CAFR being about $4 million more than the budgeted fund balance. Prior to the change in revenue recognition, the target was to maintain at least 7.5 °0 of the expenditure budget as a reserve balance in the General Fund. In the City Manager's presentation on the preliminary Business Plan, he pointed out that the Government Finance Officers Association has a "best practice" of maintaining at least a 2 -month reserve, or 16.7 °0 of the expected expenditures or revenues. This recommendation presumes that the additional revenue from the accounting change described above is included in the fund balance calculation. Therefore, we have added the additional accrued revenue into the budget system for both 2012 year end estimate and 2013 budget, in the General Fund and all other funds that have "derived tax revenues ", such as gas tax and hotel /motel tax. (see the chart below) A more recent pronouncement, GASB 54, addressed the designation of the level of restriction on fund balances. It specifically directs that general contingency funds cannot be presented in the Financial Statements as a separate fund. Therefore, we are proposing that the Contingency Fund be discontinued as an active fund, and the fund balance of about $240,000 be moved into General Fund. (The Contingency Fund balance was built by transfers from General Fund). After these two changes, the General Fund projected fund balance at the end of 2013 is about 16.1 °0 of the budgeted expenditures, which is slightly below the recommended "best practice" IMPACTS 1. Fiscal Impact — One time increase in fund balance. 10 — Section V • Policy Issues 2. Proposed Funding Source — General Fund $3,837,819 Streets Sr Traffic 202,330 Arterial Street 94,603 Tourist Promotion 129,617 Citywide Total $4,264,369 3. Public Impact — N/A 4. Personnel Impact — N/A 5. Required Changes in City Regulations or Policies — Ultimately, Council would set a new minimum fund balance target for General Fund 6. Legal Constraints, if applicable — N/A 7 Viable Alternatives — None Policy Issues • Section V —11 COMMUNITY & ECONOMIC DEVELOPMENT / CODE ADMINISTRATION 2013 STRATEGIC INITIATIVE ADD ONE PROJECT COORDINATOR POSITION BUDGETED PROPOSAL Add one new full time Project Coordinator position. In 2011, the Plans Examiner I position was vacated and left unfilled due to budget constraints. Most of the primary duties of that position were assigned to others in the division with the intent that we could still maintain a timely response and coordinated permitting process. With the increased duties, the time between plan submittal and permit issuance has increased, and customer satisfaction has decreased. The Project Coordinator position would reestablish a single contact person for the public regarding their project, streamline the communication between City Divisions and the applicant and decrease the current timeframe between plan submittal and permit issuance. All City Divisions involved in the Building Permit process have agreed that this position will greatly benefit both the public and the City IMPACTS 1. Fiscal Impact — Labor and Salary impact: Add Project Coordinator Position $67,000 Funding from other Divisions: Wastewater (50 °°) 33,500 Water (20 °°) 13,400 Irrigation (5 °0) 3,400 Total impact on the General Fund (25 °°) $16,700 2. Proposed Funding Source — 25 °° Water /Irrigation, 50 °° Wastewater, and 25 °° General Fund. 3. Public Impact — Give the public a single contact person for their project, and streamline the communication between City Divisions and the applicant. 4. Personnel Impact — Reduce the current workload for the two Plans Examiner II's and streamline interdepartmental communications. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — Leave the position vacant and continue to struggle with maintaining a viable balance between timely response to customers and time dedicated to plan review 12 — Section V • Policy Issues COMMUNITY & ECONOMIC DEVELOPMENT / CONVENTION CENTER 2013 STRATEGIC INITIATIVE INCREASE IN MANAGEMENT FEE BUDGETED PROPOSAL This proposal consists of a $15,300 (2 °0 increase to the management fee. This line item includes wages for the Convention Center staff increasing it from $513,000 to $528,300. The management fee to the Visitors and Convention Bureau remains the same at $166,000. These increases will assist in covering the costs of wages (including extra hours and staff for peak times), insurance, L &I and taxes. The Convention Center operates at a staffing level much lower than the competition not only statewide but nationally as well, according to PriceWaterhouse Coopers, as shown in the following chart, which compares staffing to the size of the facility for several Convention Centers around the state: FTE PT SO. FT Yakima 8 8 41,000 Tri- Cities 21 54 47,474 Meydenbauer 29 38 55,720 Lynnwood 17 41 34,448 National 32 45 Under 100,000 sq. ft. In addition to operating with less staff than other facilities, the Center does it with professionalism and service that can't be beat. It is because of this service that groups keep coming back to Yakima and the Convention Center, adding to the Economic Impact for the community The Public Facility District Board of Directors recommends approval. IMPACTS 1. Fiscal Impact — $15,300. Increases total management fee from $679,000 to $694,300 2. Proposed Funding Source — Convention Center Operating Account, Fund #170; Hotel /Motel Tax and event revenue. 3. Public Impact — Continue to provide exceptional service. 4. Personnel Impact — Allow adequate staffing resources to maintain the Convention Center facility and provide a high level of service /support to clients and patrons. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — None. Policy Issues • Section V -13 POLICE 2013 STRATEGIC INITIATIVE EXPAND POLICE GANG UNIT BUDGETED PROPOSAL The gang problem in Yakima is significant and pervasive. It is a hurdle to attracting new business and visitors. Currently the Police Department does not have enough officers and supervisors to allow seven day a week gang unit coverage. The Police Department proposes to expand the gang unit by four officers and one supervisor, we have provided two options for this expansion. This expansion will allow the gang unit to cover every day of the week. Seven day a week gang unit coverage allows the Department to keep constant pressure on illegal street gangs, this in turn reduces the gangs abilities to engage in criminal conduct and intimidation. It also allows for a much quicker response to gang activity with a resulting increase in apprehensions. One way to expand the gang unit is to add (4) Police Officers and upgrade one Sergeant to Lieutenant. Because this would cost about $500,000 annually, a second option was developed. The proposed option adds (3) Police Officers (effective 10/1/2013), (2) Civilians and upgrades one existing Sergeant to Lieutenant. This option eliminates a police officer and sergeant from the Community Services section and replaces them with civilian employees. The sergeant and officer position are then transferred to the Gang Unit. This results in less cost while achieving the desired additional officers assigned to the gang unit, but has the trade off of having no police officers in the Community Services Section. IMPACTS 1. Fiscal Impact — $118,000 in 2013; $328,000 Annualized Start Date 2013 Annual Add 2 Community Service Civilian Positions 5 /1/2013 $74,000 $118,000 Add 2 Police Officer Positions 10/1/2013 40,000 195,000 Upgrade Sergeant to Lieutenant 7/1/2013 4,000 15,000 $118,000 $328,000 2. Proposed Funding Source — General Fund. 3. Public Impact — Increases Gang Unit by (4) Officers and (1) Sergeant and increases coverage to 365 days a year. Reduces gang crimes and the fear associated by gang crime and intimidation. 4. Personnel Impact — Adds (2) Police Officers effective 10/1/2013, Adds (2) Civilians to Community Services, and upgrades one Sergeant to Lieutenant. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — None. 14 — Section V • Policy Issues POLICE 2013 STRATEGIC INITIATIVE ADD ONE ADDITIONAL POLICE OFFICER (VOTE) PROPOSAL To add one additional Police Officer to serve on the mufti- agency Violent Offender Task Force (VOTF). This task force is dedicated to the apprehension of violent offenders associated with and /or living within the city of Yakima. The VOTF consists of members from the Yakima Police Department, Yakima County Sheriff's office, Yakima County Department of Corrections, Sunnyside Police Department, Washington State Department of Corrections, Yakima Nation Police Department, the Department of Alcohol, Tobacco and Firearms (ATF), Immigration and Customs Enforcement (ICE) and the US Marshals Service. IMPACTS 1. Fiscal Impact — The proposed 2013 cost for this position is $20,000 and the annualized cost will be $97,500. 2013 costs are less due to the lengthy hiring process. 2. Proposed Funding Source — General Fund. 3. Public Impact — Coordinated criminal justice response. 4. Personnel Impact — Greater coordination and cooperation with other law enforcement agencies. 5. Required Changes in City Regulations or Policies —None. 6. Legal Constraints, if applicable —None. 7 Viable Alternatives —None. Policy Issues • Section V —15 POLICE / COMMUNICATIONS 2013 STRATEGIC INITIATIVE COMMUNICATIONS CENTER PERSONNEL BUDGETED PROPOSAL In 2010 the 911 call taking budget began funding 15 °° of the dispatcher's costs to help augment the call taking functions by answering the overflow 911 calls. Since that time the workload of the dispatchers has increased to the point that this assistance is interfering with their primary duties of dispatching. To relieve this issue, and to shift a majority of the call taking back to the call takers this proposal reduces that contribution to 7 °0 and allows for the hiring of two more call takers in the 911 budget. With this increase we will now be able to have a minimum of three call takers on duty nearly all the time which will allow the dispatchers to concentrate on their primary functions of handling the public safety radio traffic. The total added to the fund is the cost of 2 additional call takers or $125,000. However, because the proposal also reduces the amount eligible to be reimbursed by the 9 -1 -1 board by 8 °0 of the dispatch salaries, the General Fund must increase the transfer to fund the dispatch operation by $80,000, leaving $45,000 to be funded by 9 -1 -1. IMPACTS 8. Fiscal Impact — 2 additional 9 -1 -1 Calltaker positions $125,000 Reduction of dispatchers' allocation for 9 -1 -1 from 15°° to 7 °0 $80,000 (transfer of expense from 9 -1 -1 to City dispatch) 9 Proposed Funding Source — Increase 9 -1 -1 contract from the County $45,000 Increase General Fund Transfer for Dispatch $80,000 10. Public Impact — Improved service to the public safety agencies which will assist in more efficiencies and a safer work environment for those responding officers and firefighter. 11. Personnel Impact — Adds improved service to the public safety agencies which will assist in more efficiencies and a safer work environment for those responding officers and firefighter 12. Required Changes in City Regulations or Policies — None. 13. Legal Constraints, if applicable — None. 16 — Section V • Policy Issues 14. Viable Alternatives — The only other alternative is to continue with the same level of dispatcher augmentation of the call taking functions which would require the addition of at least two dispatchers at a higher cost. Policy Issues • Section V —17 FIRE 2013 STRATEGIC INITIATIVE PURCHASE FIRE APPARATUS BUDGETED PROPOSAL A comprehensive plan for fire apparatus replacement has been developed and was presented to the Council Public Safety Committee in 2011. In 2011, 2 Fire apparatus were replaced in response to the plan and the condition of the rig, leaving 2 apparatus that have been in service for approximately 20 years. Fire command staff are proposing that 1 of these older vehicles be replaced. As capital reserves /replacement funding is not available for an outright purchase, the City can again use the Washington State Local Option Capital Asset Lending (LOCAL) lease /purchase program to take advantage of lower interest rates because of economies of scale the state program can generate. IMPACTS 1. Fiscal Impact — Apparatus is estimated to cost about $375,000: $40,000 annual debt service over a 10 -year term. 2. Proposed Funding Source — 10-year lease /purchase with annual payments funded from General Fund 3. Public Impact — Implementation and maintenance of a realistic, agency - specific fire apparatus replacement plan: • Enhances reliability /reduces out -of- service time • Takes advantage of enhancements in passenger /user safety features • Provides economy in the reduction of maintenance costs for aging fire apparatus 4. Personnel Impact — The new engine will provide safety and reliability to allow firefighters to provide all -risk emergency services to the citizens of Yakima. Preventative maintenance to all fire department apparatus will be enhanced by the new engine as an old maintenance - intensive engine is replaced. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — Ordinance to enter into a debt transaction. 7 Viable Alternatives — None. 18 — Section V • Policy Issues FIRE 2013 STRATEGIC INITIATIVE FIRE INSPECTION PROGRAM BUDGETED PROPOSAL Objective Provide a fee schedule and collection process that is minimal and equitable to business owners and minimal in manpower and cost to the City Primary Points of Consideration • The Council has identified the need to re- institute an annual fire inspection program under the management of the Fire Department. This program will provide required annual fire safety inspections only and not code enforcement practices. The program will use two full time inspectors under the same Civil Service Class Code and Pay Code as the previous inspectors were under. • The cost of running this program inclusive of all salaries, benefits, equipment, fuel, and training is $176,000 per year. This amount is included in the proposed 2013 budget and does not include increases in fuel, wage, and benefit costs for years after that. • Required testing of fire related systems such as automatic sprinklers, alarm systems, hood suppression systems, and extinguishers will remain the obligation of the business owner and performed by a certified testing firm. Methods of fee collection To minimize the cost of this program, a foremost consideration is to design it with as little human involvement as possible. We are only counting on using two inspectors and making all other record keeping and billing a non human process. With this in mind, the fee collection process must operate without paper, stamps, envelopes, money and check handling, or manual billing data entry A fee schedule was calculated and designed for each occupancy, using a two part formula. The plan was to have the fee amount auto populate at the codes department so the fee could be charged when the business license was purchased each year. After meeting with the codes department representatives, legal and financial staff, it was found that the data can not be uploaded into Paladin system without a software upgrade if there is one. After much discussion, it was realized that the most expedient and efficient way to collect the fee was to increase the business license by an amount equal to what the cost would be to the business owner. A preliminary determination by the legal department shows that this "regulatory fee" to be an acceptable practice. This question is going before Council in November Policy Issues • Section V —19 IMPACTS 1. Fiscal Impact — $165,000 in the Preliminary Budget. Note: subsequent to the preliminary budget being frozen, this program was determined to cost approximately $176,000. Both the revenue and expenditures will be adjusted for the final budget. 2. Proposed Funding Source — General Fund, inspection fees for the serviced businesses. 3. Public Impact — More consistent fire protection. 4. Personnel Impact — Two additional Fire Code Inspector positions. 5. Required Changes in City Regulations or Policies — Establishment of a fee structure. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — None. 20 — Section V • Policy Issues UTILITIES & ENGINEERING / ENGINEERING 2013 STRATEGIC INITIATIVE ENGINEERING PLAN REVIEW & INSPECTION FEE INCREASE BUDGETED UNBUDGETED PROPOSAL For several years, the General Fund has been contributing a significant "cost share" to support the City's Engineering Division review of the design documents for, and inspection of, the construction of private development of public infrastructure. The current fee schedule as set forth in YMC 8.72 and 12.20 does not fully cover costs. The "cost share" amounts to approximately $110,000 annually We respectfully submit this request to amend the current fees such that they more equitable cover the expense of this program. The 2012 budget proposed the elimination of one Construction Inspector and the shift of the responsibility of inspection to private contractors (engineers). This proposal was accepted by Council. When this shift to privatization was put in place, it received considerable push -back from the development community The development community expressed their preference for the City to maintain inspection duties and some offered to be willing to pay increased fees to support this reversal. After hearing this testimony, City Council reversed their earlier decision and directed Engineering to re- establish in -house inspection of these projects. This was done without any adjustment to fees. Review of the revenues and expenses of these activities over the past two and one -half years indicates that fees would need to be more than doubled to cover the costs. IMPACTS 1. Fiscal Impact — Revenue would increase by approximately $100,000 annually, depending on volume. 2. Proposed Funding Source — A fee increase will reduce the current fiscal impact on the General Fund to support this program. 3. Public Impact — Increase in fees assessed for development. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — Amend YMC 8.72 and YMC 12.20 to reflect new fees. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — Alternatives include; no change, which would maintain the continued General Fund "cost share" of this program or a partial fee amendment that would reduce, but not eliminate, the cost share. Policy Issues • Section V — 21 UTILITIES & ENGINEERING / WASTEWATER, WATER & IRRIGATION 2013 STRATEGIC INITIATIVE ASSET MANAGEMENT SOFTWARE SYSTEM BUDGETED PROPOSAL As the infrastructure ages and the useful life of the installed equipment begin to fail, it becomes more imperative for the City to engage in "Asset Management." The life expectancy of such equipment needs to be tracked and replacements scheduled prior to failures to avoid major catastrophes that could directly affect the community Such a system provides the City an opportunity to track and increase asset life, prevent and predict equipment failures, and lower the total cost of maintenance; saving public money In order for the Water/Irrigation and Wastewater Divisions (Utilities) to effectively manage and track the value and life expectancies of these assets, an Asset Management software system that links Graphical Interface System (GIS) is necessary The software system would be implemented on the needs of the Utilities, but must also integrate into the City's new Cayenta system for both the General Ledger and Work Order System. IMPACTS 1. Fiscal Impact — $200,000 in 2013; $100,000 in 2014. 2. Proposed Funding Source — Operating Fund 473. 3. Public Impact — Wastewater/Water /Irrigation /Stormwater will be able to improve overall efficiency in tracking assets, save public dollars, and protect the environment. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — Not fully implement asset management to prevent equipment failures or track value of assets. 22 — Section V • Policy Issues UTILITIES & ENGINEERING / WASTEWATER 2013 STRATEGIC INITIATIVE WWTP SECURITY UPGRADE BUDGETED PROPOSAL The City of Yakima's Wastewater Division is in need of upgrading its security to address break -ins at the wastewater treatment plant (WWTP). As the economy continues to be a hardship on many, the number of incidences of theft has significantly increased over the past year To ensure the safety of our staff particularly after hours and on weekends, it is the desire of the Wastewater Division to implement further means of security at the WWTP To complicate matters, as part of the eventual Gap -to -Gap Levee Setback Project, the section of Greenway Trail that extends along the eastern edge of the City's property near the river, is being proposed in the design of the Wastewater Division's Riparian Restoration Project to be relocated closer to the WWTP; removing it from the floodway This will likely increase further break -ins. To enhance the aesthetics surrounding the WWTP for users of the proposed Greenway Trail while increasing security of the WWTP, additional security means must be incorporated along with the usual fencing and increased lighting. These may include the use of vegetation to deter individuals from attempting to crawl under /over the fences and close- circuit cameras. It will be imperative that a balance exist between sufficient security for the WWTP and beautification for Greenway Trail users. IMPACTS 1. Fiscal Impact — $200,000 in 2013; $100,000 in 2014. 2. Proposed Funding Source — Wastewater Facility Capital Fund. 3. Public Impact — Enhanced aesthetics along the Greenway Trail near the WWTP 4. Personnel Impact — Increased security for Wastewater staff. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — Accept the current status of security at the WWTP Policy Issues • Section V — 23 UTILITIES & ENGINEERING / WASTEWATER 2013 STRATEGIC INITIATIVE BIOSOLIDS SCREEN PROJECT BUDGETED PROPOSAL The Department of Ecology initiated a new Biosolids requirement reducing the current biosolids screen size of 1/4 -inch down to 3/8 -inch. The reduction in screen size is to reduce the amount of contaminants (foreign objects) entering into the biosolids process. The regulation is to become effective at the City's wastewater treatment plant (WWTP) on January 1, 2014. The City had a study performed by Brown and Caldwell to evaluate the type and placement of the new screens required that will work with the WWTP's current process set up. One of the requirements of this regulation is that the screens must be installed up stream of any grinders; adding significant costs to the overall project. Estimations place the project at $2,125,000. Due to the significant cost, the City has postponed this project until funding is available. Even though the City is on a compliance schedule for the installation of such screens, the City has been actively working with Ecology and will officially submit a request for an extension. If approved, the City would be in a better position to budget and construct the project in 2014 using revenue from existing rates. The City is also pursuing other options that may satisfy this requirement at a potentially lower cost. Should funds become available, the project may be completed at an earlier date. IMPACTS 1. Fiscal Impact — $2,125,000 (as funds become available). 2. Proposed Funding Source — Wastewater Facility Capital Fund. 3. Public Impact —None. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — None. 24 — Section V • Policy Issues PUBLIC WORKS / PARKS & RECREATION 2013 STRATEGIC INITIATIVE FEE INCREASE BUDGETED PROPOSAL Fees and charges for recreation programs, services and facility rentals were last increased in 2008. Costs to operate the City of Yakima Parks and Recreation Division continue to rise and as part of the efforts to continue to provide park and recreation services to our citizens the following increases are being proposed. Program costs, service fees and rental charges are based on similar fees and charges of other like organizations and are intentionally kept low to allow people to be able to afford to participate in the programs and enjoy the facilities and services. The proposed fee increase was discussed at the July 11, 2012, August 8, 2012 and September 12, 2012 meetings and the Parks and Recreation Commission reluctantly approved the 2013 proposed fee increase. IMPACTS 1. Fiscal Impact — Increase of approximately $43,500 in revenue for the Parks and Recreation Fund. 2. Proposed Funding Source — Increased fees and charges for services, facility rentals and recreation programs. 3. Public Impact — Public will realize an increase in costs for park facility reservations, recreation programs and services — see additional information attached. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — Amend the Municipal Code to reflect the changes in the fee structure. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — Fees and charges for services, facility reservations and recreation programs can remain the same. Policy Issues • Section V — 25 2013 PROPOSED FEE SCHEDULE Yakima Parks and Recreation Division Effective January 1, Program cos, service fees and rental charges are based on comparison with other like organizations and kept low to allow as many people as possible to be able to afford the programs, facilities and services offered. Program Fee Formula A formula has been established for determining the fees for services and programs. The formula is: Staff wages & benefits [5] + total program hours [PH] + facility costs [FC] + special equipment, materials, transportation, etc. [SP] + administrative costs (15 °°) [AC] minimum number of participants [P] = fee per participant S + PH + FC + SP + AC P = Fee Staff wages may be calculated by the hour or by the unit, such as per game, per match, etc. Contracted Services Organizations may contract with the City of Yakima Parks and Recreation Division for services such as facility reservations and scheduling, maintenance, supplies, administration, etc. The contracted organization pays for these services. Taxes Sales or other taxes will be charged where appropriate In some cases, taxes are included in the fee Program Discount for Residents As a benefit to the City of Yakima residents who participate in Parks and Recreation Programs, a discount of approximately 20 °° is provided. Resident discounts may apply to special interest classes, golf lessons, swimming lesson, youth sports and other programs as determined. Additional Adult Sports Fee for Nonresidents For the following Adults Parks and Recreation Sports Programs, all non residents participating in sports leagues will be charged an additional registration fee of $8.00. Additional fees apply to the following areas: Volleyball, basketball, softball, slow pitch softball and soccer. Park Reservations Citizens are welcome to use City park facilities on a drop in basis without charge. Individuals or organizations can make a specific date and time reservations for park facilities. [eg. Franklin Park picnic shelter] An application may be completed online after January 1, 2013 or at the Parks and Recreation Office located at 2301 Fruitvale Blvd, or by mail.A non - refundable application fee of $5.00 must accompany each facility use application when submitted. A $3.00 convenience fee will be charged for online reservations. Picnic Shelter Rental Fees Reservations are accepted up to 11 months in advance Reservations are accepted for 1 2 days (9:00am — 2:00pm or 2:30pm — Dusk) or full days (9:00am — Dusk). Picnic Shelters are available year round. Hours for Picnic Shelter Rentals: Monday - Sunday 9:00am — Dusk Picnic Shelter Fee Type Resident Non - Resident Half Day Rental (9:OOam- 2:OOpm or 2:30pm -Dusk) $50 /per half day $60 /per half day All Day Rental (9:00am -Dusk) $75rper all day $90 /per all day 26 — Section V • Policy Issues Cancellation/Refund Policy - Picnic shelter cancellations must be made at least 14 days in advance of the reservation date to be eligible for a refnd. The amount refunded will be 50% of the reservation fee. Requests made less than 14 days before the rental date will result in the loss of the entire reservation fee. Requests must be made in writing, or in person by the contracted renter at the parks and recreation office. Inflatables - Inflatables are allowed in our parks. If a group wishes to have an inflatable as part of their park reservation they are required to complete a liability waiver and have a certificate of insurance. An additional $50 fee is also required. Inclement IV eather Policy - Sorry, no refunds will be made due to inclement weather. Special Event Fee Citizens or groups wishing to schedule a community or special event in one of the City of Yakima Parks will be required to pay a Special Evenit Fee to cover additional maintenance costs. In addition, groups may be required to pay for additional refuse service and chemical toilets on site. Fees will be based on anticipated attendance. Examples of community or special events could include, but are not limited to community meetings, political events, weddings, reunions, public concerts, and other similar events. 1 — 50 participants No special event fee 51 — 100 participants $57.50 101 — 200 participants 86.00 201 — 300 participants 161.00 Over 300 participants 195.00 The Special Event Fee will be collected before reservations are confirmed. Applicants will be responsible for the condition of the park after the event. Clean up and damage fees will be charged to the applicants as determined by the Parks and Recreation Manager. The Parks and Recreation Manager will have the discretion to limit usage in the Parks based on capacity, parking, neighborhood impact and availability Special Event Service Charge Events requiring clean-up that exceeds routine litter and trash removal by two hours or more than the standard known to be normal for that location or where damage to irrigation, restroom or park equipment requires repair and service beyond normal maintenance will be charged a clean up fee. The Special Event Service Charge will begin the second hour and will be charged in increments of one hour rate at $50 per man hour. Concessionaire Permit Fee Citizens or groups wishing to sell concessions in the Parks will be charged a yearly fee of $ 215 The Parks and Recreation Manager will have the authority to authorize vending in certain parks according to the Parks and Recreation Division policy and procedures. The Parks and Recreation Manager will have the authority to waive the yearly fee in cases of contracted services or a one -time special event. A list of parks that are available for concessionaires will be provided to the applicant. Refund Policy If the Parks and Recreation Division needs to cancel an activity, staff will notify registered participants and provide a 100 refund. If a participant needs a program refund, a receipt must be presented to staff three (3) days prior to the activity registration deadline, unless otherwise stated. If the registration was paid by check or cash, a refund will be given minus a $5 processing fee that will be processed by the City of Yakima Finance Division and a check will be mailed within 30 days. If the fee was paid by credit card, the refund will be credited to the original cardholder minus a $5 processing fee Fees of less that $5 will not be refunded. There are no refunds on team sports. Policy Issues • Section V -27 Park Maintenance 2010 Fee Proposed [includes 2013 Fee Description tax] [incl tax] Soccer Fields Contracted - rate per hour Negotiated Negotiated League Adult League - minimum 2 hours/per hour $5.00 $10.00 Youth League - minimum 2 hours/per hour $5.00 $8.00 Tournaments - per day (50 °0 nonrefundable deposit) Chesterley - per Yield; per day $56.00 $75.00 Field Line Painting - per field (new fee) - $65.00 Special Line Painting- per field (new fee) - $85.00 Baseball /Softball Fields/Tournaments (50 °o nonrefundable dep) Gateway Sports Complex - all fields /one day $450.00 $550.00 Gateway Sports Complex - second day $300.00 $300.00 Gateway Sports Complex - per Yield; per hour (2 hr mut, I\1 -Th) $15.00 I.uwanus Park - new fields /one day (new Yee) - $500.00 I.uwanus Park - new fields /second day (new fee) - $250.00 I.uwanus Park - new fields /per Yield; per hour (2 hr mut, M -Th) $15.00 Gateway and I.uwanus - same date/same user 20 °0 discount 20 °0 discount Elks Park (orange, black, blue, or red field) - per Yield; per day $23.00 $30.00 Elks Park (larger green field) per day (new fee) - $80.00 Gardner Park - per Yield; per day $56.00 $80.00 Gardner Park - per Yield; per hour (2 hr mm) $8.00 $10.00 Special Services - Field Preparation Mowing - per hour $79.00 $100.00 Field Prep - per hour $30.00 $35.00 Sports Field Lights - per hour $23.00 $30.00 Tennis Court Reservations - per court'per hour $8.00 $10.00 28 - Section V • Policy Issues Community Recreation All programmed recreation activities, except summer playgrounds, youth drop in programs and additional programs determined by City Council will follow the "Program Fee Formula" as identified. 2010 Fee Proposed [includes 2013 Fee Description tax] [incl tax] Special Services to Organizations Contract Contract Beyond the Bell after School Program - per child; per day $3.00 Fisher Park Golf Course 2010 Fee Proposed [includes 2013 Fee Description tax] [incl tax] Greens Fees Youth (age 4 to S) - 9 holes $4.75 $4.75 Juniors (age 9-18) & Seniors (62 and over) 9 holes $8.25 $8.25 Juniors (age 9-18) & Seniors (62 and over) 2 9 holes $4.50 $4.50 Adult (over 18 and under 62) - 9 holes $9.25 $9.25 Adults (over 18 and under 62) - 2 9 holes $5.50 $5.50 Family (2 adults, 2 juniors) - 9 holes $26.00 $26.00 Family (2 adults, 1 Junior) - 9 holes $21.00 $21.00 Family (1 adult, 2 Junior) - 9 holes $20.00 $20.00 Passes 20 round - Adult $148.00 $148.00 20 Round - Junior & Senior $130.00 $130.00 Adult - season pass $620.00 $620.00 Junior & Senior - season pass $570.00 $570.00 Couples, Adult - season pass $1010.00 $1010.00 Couples/ Seniors - season pass $915.00 $915.00 Specials Ladies Day, Men's Day, etc. - 9 holes $7.00 $7.00 Moonlight Golf $11.50 $25.00 Rentals Corporate Outings - 1 2 Day (4 hours or less) $800.00 $800.00 Corporate Outings -full day (5 hours or more) $1200.00 $1200.00 Club rental $5.75 $5.75 Pull Cart rental $3.25 $3.25 Lessons Adult Formula Formula Youth Formula Formula The First Tee of Yakima No Charge No Charge Policy Issues • Section V - 29 Aquatics Honored Citizen is defined as a person that is 62 years old or older or has a Yakima Transit Honored Citizen State of Washington Handicapped Parking Placard (wallet card) holder, SSI Disabled or active military with an ID Ages 3 and under may swim for free when accompanied by a paying adult. 2010 Fee Proposed [includes 2013 Fee Description tax] [incl tax] Swim Lessons Tiny Tots — Level 6 $30/$37 $33/$40 Semi - Private — 8 sessions $80/$96 $88/$105 Community Water Safety $31$37 $33/$40 Competitive Stroke Class $31$37 $33/$40 Lifeguard Training $63/$80 $110 /$120 Water Safety Instructor - (not currently taught) $113/$139 $113/$139 Water Exercise Classes Hydro -Fit, Aquacise, etc. 10 Visit punch card $31$40 $35/$44 Drop in $5.50/$6.00 $6.00/$6.50 Zumba — 30 day unlimited (new) - $55/$60 Zumba — 10 visit punch card (new) - $45/$60 Other Services & Classes Program Fee Formula Formula Formula General Recreation Swimming Youth (age 4 -17) $2.00 $2.00 Adult (age 18 -62 $3.75 $3.75 Honored Citizen (over 62) $2.25 $2.25 Family (up to 4 children & 2 adults) $10.00 $13.00 Lap Swimming/Water Walking Adult $3.75 $3.75 Honored Citizen $2.25 $2.25 Passes Youth — 3 Month $46.00 $52.00 Adult — 3 Month $89.00 $98.00 Honored Citizen — 3 Month $53.00 $59.00 Family — 3 Month $190.00 $212.00 Youth Coupon book — 10 swims $16.00 $21.00 Adult Coupon book — 10 swims $30.00 $33.00 Honored Citizen Coupon book — 10 swims $18.50 $21.00 Family Coupon book — 10 swims n, a n, a Pool Rentals Lions Pool 1 to 50 participants - per hour $92.00 $100.00 Each additional 50 participants $28.75 $30.00 30 — Section V • Policy Issues Franklin Pool 1 to 50 participants — per hour $135.00 $135.00 Each additional 50 participants $25.75 $30.00 Party Area — up to 10 children & 2 adults $125.00 $125.00 Additional children $5.00 $5.00 Other Rentals For Profit Agencies 25 °° add 25 °° add Harman Center 2010 Fee Proposed [includes 2013 Fee Description tax] [incl tax] Harman Center Rentals Ballroom — up to 5 hours $1200.00 $1400.00 Ballroom - additional hours $150.00 $175.00 Ballroom - cleaning & damage deposit $500.00 $500.00 Classroom — weekends/evenings, 2 hour mm. $100.00 $100.00 Classroom — normal hours $75.00 $75.00 Weekly & Monthly User Negotiated Negotiated Non Profit — 66 °° of regular fee + tax $600.00 $1050.00 Trips and Tours Formula Formula Classes - Miscellaneous Formula Formula Reserved Activity Space — fee per quarter $12.00 $12.00 Tournaments Formula Formula Sports (Adult & Youth) 2010 Fee Proposed [includes 2013 Fee Description tax] [incl tax] Program Fee Formula Formula Formula Policy Issues • Section V — 31 PUBLIC WORK / TRANSIT 2013 STRATEGIC INITIATIVE PURCHASE 8 DIAL -A -RIDE REPLACEMENT /EXPANSION VEHICLES BUDGETED PROPOSAL Yakima Transit is in need of replacement /expansion Dial -A -Ride vehicles for the paratransit program. A large majority of the older vehicles are down for maintenance too often. Yakima Transit's current fleet consists of 4 sedans, 11 minivans, and 18 15- passenger cutaways (minibuses). Yakima Transit is proposing to replace all four sedans with eight minivans. Minivans are much more agile than the cutaways and should allow for a reduction in the use of the cutaways, which use more fuel. Yakima Transit intends to retain older cutaways in order to use some of them as parts vehicles to keep the other vehicles on the road and to allow for heavy use days on the Dial A Ride program. There are currently only 28 vehicles operable. All of those vehicles were in use at least one day this month. Paratransit services (Dial A Ride) is required in order for Yakima Transit to receive their annual apportionment grant from the Federal Transit Administration (FTA). The FTA requires that the service be adequate to meet the needs of the community within the service area. IMPACTS 1. Fiscal Impact — $240,000. 2. Proposed Funding Source — The funds for this purchase will come 80 °° from the State of Washington ($192,000). The additional 20 °° will come from Yakima Transit's dedicated sales tax ($48,000). There are no anticipated upgrades; however, any upgrades that are built in are typically covered as long as they are anticipated prior to applying for the grant funds. 3. Public Impact — Yakima Transit will be able to save money by running more fuel efficient vehicles, than the cutaways. Yakima Transit will also be able to cut down on maintenance costs and keep newer vehicles operational. 4. Personnel Impact — The only impact is that someone needs to order the vehicles and get them setup to go. No additional F 1 Fs are required. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — The alternative will be to not purchase the vehicles and spend more money on maintaining older vehicles. The problem with not expanding the fleet is that Yakima Transit may not be able to meet the FTA mandated requirements to adequately serve the community 32 — Section V • Policy Issues PUBLIC WORK / TRANSIT 2013 STRATEGIC INITIATIVE DIAL -A -RIDE SERVICE REDUCTION BUDGETED PROPOSAL Yakima Transit provides Dial A Ride (paratransit) services beyond what is required by the Federal Transit Administration. Dial A Ride is required by the FTA to operate when fixed -route service is available. The program is meant to provide complementary paratransit services for individuals who cannot use the fixed -route service. The program is comparatively much more expensive than fixed -route service on a cost per trip basis. Staff is recommending a City Policy that limits paratransit services to only the time that fixed -route services are available. IMPACTS 1. Fiscal Impact — $15,000 savings. Our paratransit contractor may see the majority of any savings, because they will be able to combine more trips when the trips aren't as scattered throughout the day 2. Proposed Funding Source — This program is funded by WSDOT Paratransit Special Needs Formula Funds and Dedicated Local Transit Sales Tax. 3. Public Impact — Yakima Transit will be able to save money by providing fewer trips beyond the normal time that Yakima Transit's fixed -route service operates. Dial -A -Ride users will have more limited times to access the service. 4. Personnel Impact — No additional F 1 Es are required. Our contractor maybe able to use fewer employees to provide the service, because they will be able to combine more trips. 5. Required Changes in City Regulations or Policies — This will change or at least create policy that the Dial -A -Ride program will only operate when fixed -route service operates. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — Continue service as currently scheduled, with few funding options available. Policy Issues • Section V — 33 PUBLIC WORK / EQUIPMENT RENTAL 2013 STRATEGIC INITIATIVE FLEET VEHICLE ADDITIONS & REPLACEMENTS BUDGETED PROPOSAL Replace or increase the Equipment Rental fleet per the included listing below Fire, Police and Transit rolling stock are managed separately by the respective departments. Vehicle replacement is determined by maintenance costs, usage, and technical service need. 2012 Fund Division Description Replacing Budget Total Streets & Traffic 10 Ton Steel Roller w'Trailer ER 6070 $75,000 Self Propelled Asphalt Paver w'Trailer ER 6055 175,000 10 Yard Dump Truck ER 3084 200,000 $450,000 Water & Irrigation Small /nudsize Pickup - Ext Cab (4X2) ER 2152 25,000 Small /nudsize Pickup - Ext Cab (4X2) ER 2271 25,000 $50,000 Refuse Side Loading Refuse Truck Refit ER 3226 175,000 Front Loading Refuse Truck ER 3137 280,000 Flatbed Truck w'TonmlyLift ER 3121 65,000 3,4 Ton (4X4) Pickup w'TonmlyLift ER 2171 45,000 3,4 Ton (4■4) Pickup w'TonmlyLift ER 1320 45,000 610,000 Wastewater Combination Sewer Cleaner ER 3165 450,000 450,000 Total $1,560,000 The chart below details the condition of the vehicles and equipment being replaced. E/R Model Division Description Number Lear Condition /Application Streets & Traffic Wacker Iron Wheel Vibrating Comp ER 6070 1999 13 years old — beyond expected life Gilcrest Propaver ER 6055 1995 18 years old — beyond expected life International Dump Truck ER 3084 1991 22 years old — beyond expected life Water & Irrigation GMC Compact Pickup ER 2152 1994 20 years old — beyond expected life Chevrolet Compact Pickup ER 2271 2003 10 years old — beyond expected life Refuse Wayne Curbtender Refuse Body ER 3226 2006 Body used when installed in 2006, hydraulic system inadequate for required service duty Crane Carrier Frt Load Refuse Truck ER 3137 2000 13 years old — 96,474 miles Chevrolet 1 Ton Truck w TommyLift ER 3121 1999 13 years old — 81,478 miles Ford 4 Ton Pickup ER 2171 1996 17 years old — 155,615 Ford Taurus Sedan ER 1320 1998 14 years old — pickup needed Wastewater Int'l Chassis w Vactor Sewer Cleaner ER 3165 2003 10 years old — beyond expected life Total 34 — Section V • Policy Issues IMPACTS 1. Fiscal Impact — $1,560,000 from the accumulated reserve dedicated for this purpose. 2. Proposed Funding Source — The Equipment Replacement Fund for replacements. 3. Public Impact — Delaying purchase would ultimately reduce ability to provide respective services to the community and shift operating costs to Fleet Maintenance. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7 Viable Alternatives — Delaying these purchases is an option, though excessive maintenance costs would shift expense to Fleet Maintenance budget. Policy Issues • Section V — 35 36 — Section V • Policy Issues THREE -YEAR BUDGET COMPARISON - 2012 BUDGET BY CITY FUNCTIONAL GROUPING 2011 2012 2012 2013 2013 2013 2013 2013 2013 Actual Amended Year -End Preliminary vs 2012 Projected Use of Fund Begmnmg Est Endmg Expenditures Budget Estimate Budget Estimate Revenue Balance Fund Balance Fund Balance General Government City Council $193,161 $235,214 $232,500 $284,751 22 5% City Manager 484,875 367,925 367,336 363,799 (1 0 %) State Examiner 114,212 106,000 106,000 110,000 3 8% Records 412,182 513,172 529,455 484,404 (8 5 %) Financial Services 1,395,184 1,423,068 1,429,750 1,456,531 1 9% Human Resources 446,132 449,628 448,877 449,046 0 0% Legal 1,046,653 1,127,361 1,124,131 1,258,965 12 0% Municipal Court 1,151,934 1,256,587 1,228,681 1,387,541 12 9% Purchasing 447,447 527,535 527,195 529,702 0 5% Hearing Examiner 12,405 31,000 26,000 26,000 0 0% Environmental Planning 643,195 622,101 593,153 614,033 3 5% Code Administration 1,255,438 1,208,765 1,211,149 1,279,416 5 6% Indigent Defense 471,740 481,000 485,000 833,500 71 9% Economic Development - - 0 229,585 n/a y Police 22,412,167 24,303,966 24,229,400 25,300,519 4 4% m Fire 8,747,587 9,380,495 9,321,562 9,848,295 5 7% co ' { Police Pension 1,471,511 1,186,350 1,263,744 1,297,225 2 6% 'Co Engineering 730,127 702,274 681,897 670,639 (1 7%) td City Hall Maintenance 346,080 357,016 357,104 360,224 0 9% Information Systems 2,488,928 2,447,396 2,388,818 2,310,463 (3 3 %) ° Utility Services 1,218,380 1,342,110 1,319,890 1,301,697 (1 4%) CD Intergovernmental 256,848 240,299 243,299 291,549 19 8% 1 Nonrecurring Expenses 193,841 - 0 (730,000) n/a p Transfers 2,311,919 3,231,275 3,212,275 2,477,275 (22 9 %) tn o Total General Fund $48,251,946 $51,540,537 $51,327,216 $52,435,159 2 2% 52,435,635 476 8,483,190 8,483,666 • Parks & Recreation 4,194,991 4,000,697 3,970,318 4,059,116 2 2% 4,058,765 (351) 363,235 362,884 }fit Street &Traffic Operations 5,211,134 5 199157 5,194,342 5 421 180 4 4% 5 418 260 (2 920) 1 097 836 1 094 916 . . . . . . . (2,920) . . . . r Total General Government Funds $57,658,071 $60,740,391 $60,491,876 $61,915,455 2 4% 61,912,660 (2,795) 9,944,261 9,941,466 N . vJ Iv N k 2012 2012 2012 2013 2013 2013 2013 2013 2013 r Year -End Year -End Year -End Preliminary vs 2012 Projected Use of Fund Segmnmg Est Ending Estimate Estimate Estimate Budget Estimate Revenue Balance Fund Balance Fund Balance CA Other Operating /Enterprise • H Economic Development $323,706 $351,636 $270,443 $228,292 (15 6 %) $229,000 $708 $229,699 $230,407 Community Development 2,795,552 3,590,419 3,520,692 1,426,035 (59 5 %) 1,411,410 (14,625) 643,199 628,574 ro co Community Relations 575,933 594,554 533,298 914,911 71 6% 521,750 (393,161) 845,216 452,055 ( -12, Community Services 82,320 - - - n/a - - - - Growth Mgmt/Com Trip Red 23,116 - - - n/a - - - - Cemetery 259,983 265,699 265,305 264,296 (0 4 %) 252,550 (11,746) 31,916 20,170 0-Q Emergency Services 1,121,899 1,222,030 1,184,898 1,189,923 04% 1,195,026 5,103 93,140 98,243 fl Public Safety Communications 3,005,894 3,558,224 3,413,756 3,497,428 2 5% 3,268,328 (229,100) 363,617 134,517 0 Police Grants 1,147,768 1,174,399 1,113,018 641,773 (42 3 %) 644,711 2,938 403,686 406,624 A Downtown Improvement District 231,655 235,962 158,462 180,474 13 9% 180,340 (134) 112,012 111,878 o Trolley (Yakima Interurban Lines) 36,103 '', 75,021 74,581 3,938 (94 7 %) 1,618 (2,320) 8,930 6,610 Front St Business Impr Area 3,531 6,298 6,298 5,000 (20 6 %) 3,535 (1,465) 4,159 2,694 Tourist Promotion 1,408,969 1,447,373 1,442,237 1,471,299 2 0% 1,479,250 7,951 357,052 365,003 Capitol Theatre 285,527 346,200 346,197 348,300 0 6% 359,177 10,877 105,670 116,547 PFD Revenue-Convention Center 604,381 719,000 719,000 695,000 (3 3 %) 700,750 5,750 175,849 181,599 Tourist Promotion Area 413,459 636,000 630,000 667,000 5 9% 667,000 0 68,722 68,722 PFDRevenue- Capitol Theatre 469,486 517,000 517,000 517,000 0 0% 528,500 11,500 39,613 51,113 Recovery Program Grants 345,521 73,905 73,905 0 (100 0 %) 0 0 0 0 Storm Water Operating 1,983,311 2,243,246 2,129,245 2,069,059 (2 8 %) 2,035,000 (34,059) 963,442 929,383 Transit 7,389,946 7,777,953 7,777,278 7,970,772 25% 8,049,195 78,423 1,543,583 1,622,006 Refuse 4,900,989 5,410,763 5,351,335 5,520,876 32% 5,473,500 (47,376) 530,590 483,214 Sewer Operating 18,445,018 19,437,140 19,292,863 19,392,938 0 5% 20,653,916 1,260,978 866,735 2,127,713 Water Operating 7,596,797 8,226,296 8,107,975 8,488,311 4 7% 8,540,700 52,389 1,905,976 1,958,365 Irrigation Operating 1,492,488 1,444,937 1,431,415 1,493,006 43% 1,683,100 190,094 548,050 738,144 Equipment Rental 5,365,398 5,743,729 5,730,510 5,867,352 2 4% 5,653,658 (213,694) 4,522,736 4,309,042 Environmental Fund 342,950 277,339 277,339 192,950 (30 4 %) 150,000 (42,950) 304,272 261,322 Public Works Administration 1,125,645 1,185,478 1,179,429 1,132,182 (4 0 %) 1,147,438 15,256 413,391 428,647 Total Other Operating /Enterprise $61,777,345 $66,560,601 $65,546,479 $64,178,115 (2 1%) $64,829,452 $651,337 $15,081,255 $15,732,592 Capital Improvement Arterial Street 2,390,946 4,554,478 3,873,024 $8,935,977 130 7% 8,870,322 (65,655) 325,671 260,016 C Capital Improvement 106,630 132,277 64,545 91,000 41 0% - (91,000) 336,203 245,203 Capitol Theatre Construction 127,406 3,202 3,202 0 (100 0 %) - - 618 618 Yakima Rev Development Area 196,375 2,011,006 1,158,466 2,509,240 116 6% 2,850,000 340,760 802,353 1,143,113 Parks & Recreation Capital 778,021 834,749 834,000 25,000 (97 0 %) - (25,000) 73,274 48,274 Fire Capital 636,989 347,722 347,722 194,896 (44 0 %) 425,750 230,854 222,033 452,887 Law & Justice Capital 820,348 1,056,115 1,039,347 532,636 (48 8 %) 359,886 (172,750) 274,124 101,374 Public Works Trust Construction 655,035 718,382 627,276 845,282 34 8% 611,306 (233,976) 637,851 403,875 REET 2 Capital Construction 933,317 506,822 506,822 506,822 0 0% 527,000 20,178 378,153 398,331 Stormwater Capital 190,125 633,000 402,945 435,000 8 0% 320,000 (115,000) 953,913 838,913 Transit Capital Reserve 474,511 685,000 260,500 545,500 109 4% 618,250 72,750 1,077,879 1,150,629 Convention Center Capital Impr 377,215 216,934 216,934 295,000 36 0% 220,500 (74,500) 515,157 440,657 Cum Reserve for Capital Impr 12,163,709 9,432,249 2,359,249 12,194,500 416 9% 10,728,000 (1,466,500) 2,473,320 1,006,820 Wastewater Facilities Capital Rsv 42,261 50,000 50,000 50,000 0 0% 150,500 100,500 839,047 939,547 Sewer Construction 1,011,268 6,418,253 2,678,000 6,365,000 137 7% 1,200,000 (5,165,000) 6,109,653 944,653 Domestic Water Improvement 1,706,676 4,865,000 1,231,375 6,235,000 406 3% 6,600,000 365,000 3,706,294 4,071,294 Wastewater Facilities 1,533,538 15,855,000 9,714,280 14,040,000 44 5% 13,781,500 (258,500) 2,692,477 2,433,977 Irrigation System Improvement 2,453,799 4,115,554 1,649,554 1,033,304 (37 4 %) 1,208,500 175,196 129,561 304,757 Total Capital Improvement $26,598,169 $52,435,743 $27,017,241 $54,834,157 103 0% $48,471,514 ($6,362,643) $21,547,581 $15,184,938 Contingency /Operating Reserves Contingency Fund $42,613 $200,000 - - n/a - - - - FRS /Capitol Theatre Reserve 71,927 71,927 $71,927 $71,927 0 0% $500 ($71,427) $242,422 $170,995 co co ,'{ RiskManagement 2,781,536 9,914,259 2,964,477 3,689,378 245% 3,586,000 (103,378) 865,415 762,037 p Total Contingency /Operating Rsys $2,896,076 $10,186,186 $3,036,404 $3,761,305 23 9% $3,586,500 ($174,805) $1,107,837 $933,032 bd Employee Benefit Reserves c Unemployment Compensation $207,224 $318,064 $212,964 $293,005 37 6% $177,000 ($116,005) $291,826 $175,821 o Employees Health Benefit 11,047,905 11,469,378 11,424,885 11,625,339 1 8% 11,995,000 369,661 2,207,631 2,577,292 Workers' Compensation 1,319,074 1,363,785 1,064,710 1,242,272 16 7% 1,018,000 (224,272) 1,015,537 791,265 p Wellness /EAPFund 54,722 92,000 83,330 93,700 124% 60,000 (33,700) 99,316 65,616 0 Firemen's Relief & Pension 1,461,967 1,344,057 1,308,562 1,347,493 3 0% 1,380,500 33,007 866,694 899,701 • Total Employee Benefit Reserves $14,090,892 $14,587,284 $14,094,451 $14,601,809 3 6% $14,630,500 $28,691 $4,481,004 $4,509,695 k x N . CA W 4a k 2012 2012 2012 2013 2013 2013 2013 2013 2013 r Year -End Year -End Year -End Preliminary vs 2012 Projected Use of Fund Beginning Est Ending Estimate Estimate Estimate Budget Estimate Revenue Balance Fund Balance Fund Balance vJ Trust and Agency Funds • H Cemetery Trust $9,811 $5,500 $5,500 $5,500 0 0% 16,500 11,000 615,420 626,420 YakCorps Agency Fund 121,514 497,725 497,725 511,700 0 0% 511,700 - 71,144 71,144 ro co Total Trust and Agency Funds $131,325 $503,225 $503,225 $517,200 2 8% $528,200 $11,000 $686,564 $697,564 co bzi Debt Service A , LID Guaranty $0 $0 $0 $0 n/a $50 $50 $80,139 $80,189 co PFD Debt Service 1,014,136 1,018,253 1,018,253 1,017,000 (0 1%) 1,017,594 594 171,904 172,498 o General Obligation Bonds 2,221,940 2,331,083 2,217,083 2,529,384 14 1% 2,520,739 (8,645) 373,612 364,967 LID Debt Service 155,933 285,000 285,000 285,000 0 0% 274,000 (11,000) 36,350 25,350 A Water- Irrigation/Sewer Bonds 2,862,053 3,255,903 3,181,214 2,127,561 (33 1%) 2,449,686 322,125 1,829,290 2,151,415 o Total Debt Service $6,254,062 $6,890,239 $6,701,550 $5,958,945 (11 1 %) $6,262,069 $303,124 $2,491,295 $2,794,419 Total City Budget $169,405,940 $211,903,669 $177,391,226 $205,766,986 16 0% $200,220,895 ($5,546,091) $55,339,797 $49,793,706 WHAT YOU PAY AND WHAT YOU GET This section is presented to assist the reader in understanding the taxes they pay what governmental entity receives those tax revenues and how the City spends their allocated portion Enclosed you'll find charts and graphs which identify how much of the taxpayers dollar comes to the City and what percentage of the City's total revenues each type of tax/charge represents Also included is (a) an outline of the City taxes and utility charges collected from a typical Yal una household, (b) a depiction of how those revenues are then distributed between the various City services/functions and (c) the amount a typical four person household pays for these services MAJOR TAXES PAID Sales and Use Tax There is an 8.2% sales tax charged on the sale of goods witlun the City The vast majority of tins revenue is allocated to the State not the City The State receives 6.50 9 while the City receives .85 9 fax the general fund and an additional 30% that is restricted for transit sernces 15% goes directly to the County and .409 represents countywide taxes fax Criminal Justice that is allocated between Cities and the County (Refer to the following chart fax a complete detailed listingof how inns revenue is allocated) Following is an example of how the sales taxes paid by the consumer are allocated between the City and the State Based on the assumption that a family with a taxable income of $40,000 will spend $10,000 on items on which sales tax will be apphed, they will pay approximately $820 in sales taxes annually Of this amount, 14 09 or approximately $115 goes to the City ($85 or .85 9 for general fund and $30 cc 03% for transit services) The following chart depicts how much of each dollar of sales tax revenue is allocated to the State, the City and the County ALLOCATION OF SALES TAX COLLECTION Stale of Wa Annstan Yalama han3t 7934 324 I I w�'�d _5...4 .:R sa ilaiir'IY2csn jk6 I t0 TOl� v j" 1.S (g . /M k .:4‘,-..4, 1, A22123565I , - , l T. i ,.. i ,, ,24.,..fay= . ( f V. • ' 42212 ,5E7 A ,o mrn,. • ,_ 4 C,ly of lama [Cm, z ] Fund) County 1034 6 74 What You Pay and What You Get • Exhibits -5 SALES TAX RATES WITHIN YAKIMA CITY LIMITS (In descending or-derbytotal allocahon) Percent Example Rate of Total $100 Sale State of Washington 650% 7927% $650 Qty of Yalama (General Fund) 0 85% 10 37% $025 Yalama Transit 030% 366% $030 Yalama County (Curralt ExpelseFund) (t) 0 15% 1 83% $0 15 Yalama County Criminal Justice 0 40% 4 88% $0 40 Total Sales Tax Ratem City Limits 820% 100 00% $820 (1) The City charges 1% however the county receives 15% of the ahe? sales tax collections (2) This tax is allocated among the ashes and the countyto support Cnmknal Jushceuses Property Taxes The total property taxes paid by property owners within the City of Yakima include taxes levied by several governmental entities the State School Districts special county wide voted levies and the City's general and special voter approved levies The percentage of the total property taxes levied by and allocated to each individual governmental entity will change slightly from year to year The City's portion is generally under 30% of the total amount collected (Refer to the graph and chart below for how the 2012 property taxes were allocated between these governmental entities ) 2012 PROPERTY TAX DISTRIBUTION YaiumaSch olnistnct Slat of Waslungt nsch 1 Lib icy 0 37 0 19 D44 rrr 1 1 1 \ lu € TiBtrigigif s. 1 a ` A 122123565A I N ON l�i i r A 2123565 A ww mvwn as may 3 . L — A #/c- . 1FY Ci ii... i A `` � A VE. S*tTr u DOLT Au Qty of Yakima Yakima County EMS 254 134 D24 City of Yalama Property Tax — In 2012, a typical City resident pays approximately $12 61 per thousand of assessed value on property taxes Only $3 11 or about 25 0%, goes to the City with the balance divided between the County, schools, and other special districts Descnption Of How Property Taxes Are Levied —The following explanation is included to help the reader understand how property taxes are assessed to the individual property owners To aid in this explanation, three commonly used terms must be understood They are Property Tax Levy, Property Tax Rate and Assessed Value 6 — Exhibits What You P ay and What You Get Property Tax Levy — is the total amount of money that is authorized to be collected. Property Tax Rate — is the property tax amount that will be applied to every $1,000 of assessed value; the rate is determined by simply dividing the levy amount by the total assessed value amount and dividing that number by 1,000. Assessed Vahte — is the total value, as determined by the County Assessor's Office, of all property within the City All taxing jurisdictions annually set the levy (i.e. amount of tax) in accordance with the limitations set by state law The County Assessor then takes the levied amount and divides it by total assessed value to arrive at the rate /$1,000. In other words, an increase in assessed value does not affect the total amount levied or collected by the governmental entity Nor does it automatically affect the amount the property owner must pay The dollar amount of the levy is restricted by law — the assessed value is simply the means to allocate the total dollars among the property owners. A change in one property owner's assessed value will affect his/her property tax bill only if the change is significant enough to change that property owner's percentage of the total assessed value of all property within the taxing distric (Example: if the amount of property tax levied does not change from one year to the next, and every property owner's assessed value goes up 3 °o, there will be no change in the property tax owed by any of the property owners. This is due to the fact that everyone's assessed value increase by the same amount; therefore, every property owner's percentage of the total tax levy remained the same.) PROPERTY TAX CODE AREA #333 (YAIKIAIA SCHOOLS) — CONSOLIDATED LEVY AND RATES 2011 ASSESSED VALUATION — 2012 TAX YEAR Amount Percent 2011 2012 of Property Tax Levy Rate Levy Levy City Levy General Fund $1.5351 $10,009,000 Parks &Recreation $0.2671 $1,457,000 Street & Traffic Operations $0.70S3 $3,863,000 Firemen's Relief & Pension $0.2411 $1,315,000 Total OperatingLevy $3.0516 $16,644,000 242 Total Bond Levy $0.0545 $293,000 0.4 Total City Levy $3.1061 $16,937,000 24.6 Other Levies Yakima School District #7 Operation & Maintenance $3.0665 $16,494,175 37.5 Bond Redemption $1.6640 $8,949,7S6 State Schools $2.3953 $13,080,851 19.0 Library $0.4724 $2,576,573 3.7 Yakima County $1.5371 $8,383,67S 13.3 Yakima County Flood Control $0.0895 $488,698 juvenile Justice Bond $0.0472 $253,864 EMS Levy $0.2244 $1,223,927 1.8 Total Other Levies $9.4997 $51,451,552 75.4 Total Levy Code #333 $12.6055 $68,388,552 100.0 i \that You Paz mud i \that You Get • Exhibits —7 City Taxes and Utility Charges The taxes and utility charges shown in the following charts are only those directly levied by the City. In the cases of sales and property taxes, the 2 major taxes paid directly by Washington residents, only a small portion of the total tax belongs to the City. To illustrate what a typical household might pay, the following assumptions were made Property tax based on $120,000 home; Sales tax based on $42,000 annual income and $10,500 taxable purchases, Utilities based on 96 gallon can for Refuse, 1,300 cubic foot monthly consumption for Water/Wastewater, Irrigation for 7,000 square foot lot, Stormwater based on impervious surface, Gas /electricity $3,000, telephone $960, cable television $600. Based on these assumptions, a typical household in Yakima paid approximately $228 a month, or $2,739 a year, as depicted in the following charts. ANNUAL TAXES AND UTILITY CHARGES LEVIED BY THE CITY OF YAKIMA ON THE TYPICAL HOUSEHOLD FOR 2012 Rate Cost Per Revenue Per1,000 Household Property Taxes - General $2 9185/1,000 $367 SpecialLevy Property Taxes $0 0530/L000 7 Sales Tax - General 121 Transit Sales Tax 32 Tax on City -owned Utilities - General 259 Tax on Private Utilities - General 274 Utility Charges (Water/Wastewater /Refuse) - Exc Utility Tax 1,390 Stormwater 43 Irrigation Assessment 246 $2,739 CITY TAXES AND UTILITY CHARGES COST TO TYPICAL HOUSEHOLD — $2,739 ANNUALLY Irrigation $246 Refuse $372 Wafer General $331 Government $123 Storm Water Streets- $ $43 Pa s -$51 _ _ Capital Project Funds -$29 Transit Dlvl slon $32 Other - $129 Other Spenal Revenue Funds $33 Debt Service Funds Wastewate $687 Special Levy Debt i fety $7 8 — Exhibits • What You Pay and What You Get GENERAL GOVERNMENT REVENUE The total 2013 proposed General Government Revenue Budget is approximately $61 9 million The following chart breaks this dollar amount down by the source of the revenue You'll note that three revenue sources — sales tax property tax and franchise and utility taxes — generate 740°/ of the total general fund revenues GENERAL GOVERNMENT REVENUE (BASED ON 2013 BUDGET OF $61 9 MILLION) 2884 644 Ste 2604 Franchise& Intergovernment& Other Saks Tax Utthty Tax State Shared Revenue Revenue 014097)000) 01495,000) ($8,945605) ($1,918,650) t <iIC ;�ES 1 A2212 1. 3 5 65 A , y Mitt T . o-$n■ Il IIP • A?? i65 A A ✓ W wrm Rt. ( vr+.G 5 P F t , , Z ONE 4 it nommail nvn Invr oc 3.11 2484 1184 4.3: Property Tax Luenses,Permrts Pmes& ($15229,000) &Charges Other Taxes for Servsca ($2,951$00) ($7 275,905) Note The term "General Government" refers to basic tax supported functions The major functions included in this category are Pohce Fire Streets and Traffic Operations, Parks and Recreation and Municipal Court services These functions use about 74 2% of General Government revenues Other administrative services include Information Systems (te computer support) Legal, Finance, Purchasing and Human Resources — services necessary for any organization to function GENERAL GOVERNMENT EXPENDITURES The following chart depicts the breakdown of the proposed 2013 general government expenditure budget This breakdown identifies that the City spends over $44 6 milhon (or 69 4 °/) of its available resources on providing pubhc safety services (Pohce, Municipal Court, Fire, Code Enforcement and Dispatch services) Additionally the City allocates over 8 4 °/ of its resources to maintaining and operating the Streets and Traffic Systems and another 6 3% to provide Parks and Recreation programs and services Providing the existing services in these four basic categories takes 84 1°/ of all the City's available general government resources What You Pay and What You Get • Exhtbets — 9 Providing the services in these four critical areas is labor intensive approximately 7229 of these costs are personnel related Therefore, any significant budget reductions 1n these areas will require a reduction in personnel and the related services these individuals perform Conversely any signdicant reductions in the overall general government budget that do not include these four largest areas of the budget will severely limit the services the remaining departments will be able to provide (i e Financial (includinglnformation Technology), Legal, CommunityPlannung and Project Engineering and Administration) Breaking down the City's general government budget by these major service areas and identifying the percentage of each available dollar that the City allocates to each of these areas provides the reader with a visual picture of where the focus and priorities of the City have been placed Additionally this chart will assist the reader in understanding the difficult challenges Leong the City should it become necessary to implement a significant reduction in the City's proposed budget without affecting the pubhc safety budget and services GENERAL GOVERNMENT EXPENDITURES (BUDGET OF $63 5 MILLION — INCLUDES FIRE PENSION OF $1 6 MILLION) 475e 34e 62e 2.0e Police & Streets & Parks& Commututy Planting Courts Traffic Recreation Project &Sgineenng $30,147,923 $S258$91 $012,676 $1295,612 3.p'.%:,° .;; .iii') •.n.m'a _ _M_ p ? T _ ■gyp ) {� r rM @ �m � i l ir �� l't���J���� 1'ZiP�J MPUaa I t C e, “'a %� ; A22 1235 65 A N. s to i t J � ' I _. 1 w A22 x 'i; ., �n )x- Dr= K x ma 3 i ...as SOT, n. e 0 . 11E ' : ER-DOLL � _ _ � 1 an>v w oa .�.■ -ht.., p.. gie I 219: 6.1t 73t are / Code Financial & Governance/ Enforcement LegelServsces Admuustration $13,9303.10 $3,266,633 $1,922169 Allocation of Expenditures Following is a detailed analysis of the City of Yal urea's local tax structure This analysis shows the various sources of City revenue and identifies what type of services these revenues will fund in 2013 Additionally, this analysis reflects the cost of each of these services to a typical household The non tax funding sources identified include all sources except directly levied taxes (shown in the adjacent column) which are property sales and utility taxes The non local tax amounts are made up of direct charges for services, state shared revenues, grants, interfund charges, beginning balances and other miscellaneous sources 10 — Exha ba is What You Pay and What You Get Municipal public safety services consume the greatest share of local taxes, $729 per household per year, or 71.1 °0 of the total general taxes paid. Other General Government services cost $82 per household annually, or 8.0 °0. Streets and Parks together cost $115 per household annually, or 12.1 °0 of general taxes paid. The Refuse, Water and Wastewater utilities combine to cost approximately $1,390 annually per household. (Many of the costs included in the budgets of the utilities fund State and Federal mandates that local citizens must pap ) ALLOCATION OF TAXES AND UTILITY CHARGES (BASED ON 2013 PROPOSED BUDGET - BUDGET NUMBERS IN THOUSANDS) 2013 2013 Non -Tax Allocation Household Permanent Proposed Funding Local of Taxes Typical Budgeted Tax Supported Functions Budget Sources Taxes Collected Cost Positions Local Direct General Purpose Tax Supported Functions Public Safety (Police Fire Sr Pensions) $44,510 6,778 $37,732 71.4 $729 327.12 General Government 14,607 10,376 4,231 S.0 S2 126.75 Streets Department 5,421 1,555 3,563 7.3 °.. 75 35.00 Parks Department 4,059 1,352 2,707 5.1 52 20.30 Other Special Revenue Funds 3,345 1,355 1,957 3.S 3S 14.00 Debt Service Funds 3,253 2,425 S2S 1.6 16 0.00 Capital Project Funds 8,775 7,257 1,515 2.9 °.. 29 0.00 Local Direct Special Purpose Tax Supported Functions Special Levy Debt 530 237 293 - 7 0.00 Transit Division 5,516 3,516 4,700 - 32 52.50 Non -Local Tax Supported Functions Street Construction 21,130 21,130 - - - - Refuse-13,767 Residential accounts 5,521 5,521 - - 372 20.50 W astewater- 22,591 Residential accounts 41,421 41,421 - - 637 62.31 W ater- 17,349 Residential accounts 14,956 14,956 - - 331 35.00 Equipment Rental 5,867 5,867 - - - 12.00 Public Works Administration 1,132 1,132 - - - S.00 Self - insurance Reserve 5,415 5,415 - - - - Employee Benefit Reserve 11,719 11,719 - - - - irrigation-10,541 Residential accounts 2,343 2,343 - - 246 7.00 PB1A 135 135 - - - - Storm Water 2,504 2,504 - - 43 6.69 Totals $205,767 $147,908 $57,859 100.0 $2,739 727.17 Based on 2013 cost for a typical four person household. Property tax based on $120,000 home; sales tax based on $42,000 annual income and $10,500 taxable purchases; utilities based on 96 gallon can for refuse, 1,300 cubic foot monthly consumption for water wastewater, irrigation for 7,000 square foot lot; gas electricity $3,000, telephone $960, and cable TV $600. T \ghat You Paz mud T \ghat You Get • Exhibits -11 TAX BURDEN — FEDERAL VS. LOCAL The Tax Foundation of Washington D C. publishes a Special Report each April, called "America Celebrates Tax Freedom Day" This is when Americans will have earned enough money to pay off their total tax bill for the year. Taxes at all levels of government are included, whether levied by the federal government or state and local governments. Tax Freedom Day in 2012 fell on April 17th, four days later than it did in 2011, due to higher federal income and corporate tax collections. On average in 2012, Americans will work 69 days to afford their federal taxes and 38 more days to afford state and local taxes. As the economic recovery continues, the growth in individual incomes and corporate profits will increase tax revenues and push Tax Freedom Day ever later in the year. The total tax burden borne by residents of different states varies considerably, not only due to differing state tax policies, but also because of the progressivity of the federal tax system. This means higher - income states celebrate Tax Freedom Day later than lower- income states. The report indicates that Washington State was ranked 4th highest in the nation for overall per capita taxes paid in 2011. This demonstrates that Puget Sound, with a higher cost of living and commensurately higher salaries, generated high federal income tax payments. (Some of the wealthiest people in the world live in Washington State.) However, estimated at 9.3 °° of income, Washington's state and local tax burden percentage ranks 29th highest nationally, below the national average of 9.8 °°. It also demonstrates how small the state and local tax burden is in comparison to the total taxes paid — at roughly one third of the total tax burden (currently at 29.2 °0). For the most part, local taxes cost the least and provide citizens with the services they need and care about the most —they have the most direct bearing on their quality of life. This is also the level where citizens are most empowered to affect government policy and monitor accountability There are per capita comparisons presented in the Budget, which contrasts the City of Yakima with other similar cities in Washington State. Yakima is consistently below the average in per capita taxes. 12 — Exhibits • What You Pmt and What You Get EXHIBIT III — SUPPLEMENTAL INFORMATION TABLE OF CONTENTS CRIMINAL JUSTICE Criminal Justice Costs General Government Budgets Criminal Justice Sales Tax SALARY AND BENEFIT COSTS Costs to Total Budget Operating Funds RESOURCE AND EXPENDITURE BREAKDOWN Graphic Portrayal Total Resources - by Category Total Resources - by Category and Source Total Expenditures Supplemental Information • Exhibits —13 CRIMINAL JUSTICE This analysis compares Criminal Justice expenditures to other General Government costs. Criminal Justice costs include: Police Department (including jail costs); Police Pension; Court and Probation costs; Prosecution and Indigent Defense (included in the Legal Department budget) and forty percent of Information Systems budget (the amount dedicated to Law and Justice support). This category also includes one -half of the transfer from the General Fund to the Public Safety Communications Fund for Dispatch and the transfer from the General Fund to Debt Service funds to repay debt borrowed for Criminal Justice purposes. This graph reflects the City's efforts to meet Council's Strategic Priorities. Public safety has been a high priority focus of City Council for the last two decades. GENERAL GOVERNMENT BUDGETS (1) LAST TEN YEARS 2004 2005 2006 2007 2008 Amended Amended Amended Amended Amended Budget Budget Budget Budget Budget General Fund Criminal Eustice $20,061,761 $20,794,116 $22,857,422 $25,014,331 $26,935,856 Other 17,476,192 17,862,426 19,557,20S 18,856,452 19,782,839 Parks & Recreation 3,832,816 3, 905 ,396 4,074,592 4,199,143 4,420,906 Street/Traffic 4,883,030 5,273,574 5,522,653 5,907,882 6,213,533 Total $46,253,799 $47,835,512 $52,011,875 $53,977,807 $57,353,434 June June June June June 2003 2004 2005 2006 2007 Consumer Price Index 185.7 190.4 194.5 203.5 210.6 (1) Excludes double budgeted transfers between general government funds 14— Exhibits • Supplemental Information COSTS VS. OTHER GENERAL GOVERNMENT FUNCTIONS Street /Traffic Parks & $5,055,372 85% Recreation $4,050,112 6 8% Criminal Justice $30,785,424 51 6% Other $19,759,460 33 1% 2009 2010 2011 2012 2013 2013 Amended Amended Amended Amended Preliminary VS 10 Year 10 Year Budget Budget Budget Budget Budget 2012 Increase Increase $28,471,541 $27,554,732 $28,192,940 $27,746,811 $30,785,424 10 8% 53 5% $10,723,662 20,240,301 19,912,799 19,279,670 19,218,385 19,759,460 2 8% 13 1% $2,283,269 4,249,796 4,133,782 4,042,938 4,050,111 4,050,112 0 0% 5 7% $217,296 5,686,692 5,308,117 5,218,691 5,055,371 5,055,372 0 0% 3 5% $172,342 $58,648,330 $56,909,430 $56,734,239 $56,070,678 $59,650,368 6 3% 29 0% $13,396,569 June rune rune rune rune 10 Year 2008 2009 2010 2011 2012 Increase 223 6 219 9 221 7 227 5 236 2 27 2% Supplemental Information • Exhibits —15 CRIMINAL JUSTICE SALES TAX -.3% EXPENDITURES AND REVENUES 2012 2013 2009 2010 2011 Year -End Proposed Actual Actual Actual Estimate Budget General Fund Police Department Salaries & Benefits (includes overtime) $605,694 $659,059 $671,542 $686,043 $711,742 Miscellaneous (uniform /fuel /travel) 133,122 31,592 14,639 70,000 70,000 Liability Insurance 6,973 7,322 7,542 8,296 S,S77 Professional Services/R&M Contractors 5,363 0 0 5,000 5,000 Yakima County pail Cost 411,105 436,612 350,000 350,000 350,000 Total Police Department 1,162 260 1,134,585 1,043,723 1,119,339 1,145,619 The .3° Criminal Justice funds support six full time Patrol Officers including, all w ages, overtime, uniforms, supplies, insurance and training expenses. Additionally, these funds are used for repairs, maintenance, communications and fuel used for additional patrols. A portion of the increased Pail costs are also paid out of this fund. Municipal Court Salaries & Benefits (includes overtime) 168,520 165,745 145,841 168,184 208,970 Professional Services 39,395 33,633 30,722 45,000 45,000 Miscellaneous (office supplies /travel /dues) 12,352 5,513 0 5,000 5,000 Total Municipal Court 220,270 204,891 176,563 218,184 258,970 The Criminal Justice funds support two Municipal Court Clerk positions and a 3/4 -time Court Commissioner including all w ages, overtime, supplies and training. Additionally, this fund supports building security-, interpreter services and witness and furor fees associated with processing the court's case load. Legal Dept Salaries & Benefits (includes overtime) 157,253 153,382 154,945 174,017 179,103 Professional Services 5,393 4,576 0 5,000 5,000 Miscellaneous (office supplies /travel /dues) 2,770 2,296 3,086 3,350 3,350 Total Legal Department 165,415 160,254 158,034 152,36: 1S7,453 The .3 Criminal Justice Sales Tax is being used to supplement criminal justice functions throughout Yakima County This money- filly- funds one Legal Assistant 11 position, one Assistant City Attorney 11 position including mandatory continuing legal education expenses and dues and subscriptions for required Associations. Information Systems Salaries & Benefits (includes overtime) 30,494 28,061 22,191 16,599 16,676 Miscellaneous 6,705 22,411 100 0 0 Professional Services/R & M Contractors 0 0 39,692 91,526 94,600 Total Information System 37,199 50,472 61,953 108,425 111,276 The portion of the .3° Criminal Justice Sales Tax allocated to Information Systems is used to enhance the effectiveness of the law enforcement and other Criminal Justice personnel through the expanded use of technology Currently, the emphasis is on mobile technology for the patrol officers. A portion of these funds are budgeted for temporary salaries used to support the mobile computing and technology infrastructure that has been expanded and enhanced through Criminal Justice Tax over the last two years. YAKCORPS member fees have been added to this budget for 2012. 16- Exhibits • Supplemental Information 2012 2013 2009 2010 2011 Year -End Proposed Actual Actual Actual Estimate Budget Animal Control /Codes Salaries Sr Benefits (includes overtime) $74,759 $67,264 $66,212 $69,167 $70,364 Misc (uniforms /supplies /fuel /cell phone) 3,793 1,446 6,841 9,596 9,700 Total Animal Control /Codes 78,582 68,710 73,053 78,763 50,064 The .3° Criminal Justice Funds support one full -time Animal Control Officer including all w ages, overtime, supplies and communication necessary for this position. This Animal Control Officer position will be eliminated in 2011. Human Resources Professional Services (employee recruitment) 6,750 6,000 6,125 7,500 7,500 The .3 Criminal Justice funds are used to provide for contract services, testing and other necessary recruitment costs for positions funded by the criminal justice sales tax. General Fund Total Expenditures $1,670,476 $1,624,912 $1,519,481 $1,714,578 $1,790,882 Other Funds Public Safety Communication Salaries Sr Benefits (includes overtime) $132,450 $142,863 $159,257 $154,150 $177,800 Small Tools Sr Equipment 6,761 0 0 0 0 Total Public Safety Communication 139,211 142,863 159,257 154,150 177,800 Criminal Justice funds allocated to this department are used for additional positions necessary to accommodate the increased workload generated by law enforcement activities. These funds provide for two Rill-time Dispatcher and temporary support for Police. Law Sr Justice Small Tools Sr Equipment 12,S70 15,265 2,867 0 0 Operating Equipment 7,853 5,365 1,615 48,117 26,000 Total Law Sr Justice 20,723 20,633 4,485 48,117 26,000 The .3° Criminal Justice funds support Capital expenses related to the new positions, technology and services created with this tax. Total Expenditures $1,830,410 $1,788,408 $1,683,253 $1,916,875 $1,994,682 Revenue $1,795$73 $1,789,171 $1,531296 $1,913,500 $1,950,500 Revenue over (Under) Expenditures ($34,537) $763 $148,043 ($3,375) ($44,182) Cumulative Balance $469,384 $470,147 $617,427 $466,772 $422,590 Supplenieiital hiforninticm • Exhibits -17 SALARY AND BENEFIT COSTS COSTS TO TOTAL BUDGET The following chart represents the relationship of the City's salary and benefit costs to total budget for General Government and other funds of the City The City's General Fund ranks the highest with salary and benefit costs, representing 71.7 °0 of total fund expenditures. However, employee compensation and benefit costs for an individual department within the General Fund as a percentage of its total costs range from 31.0 °0 to 93.5 °°. In several departments (including Police, Legal and Information Systems) if contracted services were excluded, the percentage of salary and compensation costs as a percentage of the division total costs would be considerably higher than what is depicted on the following chart. Parks, Streets and other operations for the most part are more capital intensive, and the ratio of salary and benefits to total costs are representative of that type of operation. Section I includes an analysis based on information gathered by the State Auditor's Office. The chart in this section identifies the per capita salary costs for Yakima and 11 other comparable cities, and indicates that: The City of Yakima spends, on the average, $68 less per capita on salaries than other comparable cities. Yakima employs fewer people per capita than other cities. To minimize the number of regular employees and to maintain service levels during periods of peak workload demands, the City uses contract and temporary labor when feasible. 18— Exhibits • Supplemental Information OPERATING FUNDS SALARIES & BENEFITS AS A PERCENTAGE OF TOTAL DEPARTMENT /FUND BUDGET 2013 2013 Salaries& Labor General Government Budget Benefits Percentage Police $25,300,519 $18,875,703 74.6° Fire 9,848,295 5,563,995 87.0 Technology Services 2,310,463 1,573,29S 68.1° Financial Services 1,456,531 1,297,534 59.1 Utility- Customer Services 1,301,697 977,018 75.1 Municipal Court 1,387,541 1,149,955 82.9° Code Administration 1,279,416 1,008,705 7S.S Legal 1,258,965 1,125 241 S9 4 ° Engineering 670,639 602,347 89.8° Environmental Planning 614,033 572,962 93.3° City Manager 363,799 325,649 S9.5 Purchasing 529,702 495,057 93.5 Human Resources 449,046 410,286 91.4 Records 484,404 266,354 55.0 Economic Development 229,585 122,585 53.4 City Hall Maintenance 360,224 111,550 31.0 City Council 284,751 102,801 36.1 Other General Fund Expenditures 4 ,305,549 0 0.0 Total General Fund $52,435,159 $37,581,043 71.7 Parks & Recreation 4,059,116 1,951,317 48.1 Street & Traffic Operations 5,421,150 2,575,065 47.5 Total General Government $61,915,455 $42,107,425 68.0° Economic Development 228,292 174,557 76.5° Community Development 1,426,035 505,156 35.4 Community Relations 914,911 395,477 43.2 Cemetery 264,296 170,342 64.5 Emergency- Services 1,189,923 883283 74.2 Public Safety Communications 3,497,428 2,955 260 S4.5 Police Grants 641,773 408,273 63.6 Stormw ater 2,069,059 751,612 36.3 Transit 7,970,772 3,667,764 46.0 Refuse 5,520,S76 1,411,360 25.6 Wastewater Operating 19,392,935 5,312,728 27 Water Operating 8,488,311 2,426,994 28.6 Irrigation Operating 1,493,006 670,482 44.9 Unemployment Comp Reserve 293,005 29,370 10.0 Employment Health Benefit Reserve 11,625,339 129,642 1.1 W orkers Compensation Reserve 1,242,272 59,330 7.2 Risk Management Reserve 3,689,378 587,572 15.9 Equipment Rental 5,867,352 S: S,S61 15.0 Public Works Administration 1,132,182 567,975 50.2 Other Funds (Capital/Debt Sery etc) 66,904,383 0 0.0 Total City- wide Budget $205,766,986 $64,123,463 31.2 Supp/enieiital Irt(orninticm • Exhibits -19 RESOURCE AND EXPENDITURE BREAKDOWN GRAPHIC PORTRAYAL OF CITY RESOURCE CONSUMPTION The purpose of this section is to graphically present total City resources by category, and distribute them by function and type of expenditure for the 2013 budget year. This "flow of resources" concept is designed to give the taxpayer a basic understanding of how tax dollars and other revenues are spent in the City Interfund transactions have been eliminated (i.e., those items that flow out of one fund and into another, these are referred to as double budgeted items) in order to portray only external revenue sources available to the City The broad revenue categories are based upon the State of Washington's mandated accounting structure. A definition of the terms is included below• Borrowings — Proceeds from long -term debt issued by the City In 2013 this includes primarily a revenue bond for Wastewater facility improvements, Public Works Trust Fund loans for utility capital needs and Councilmanic general Obligation bonds for street improvements. Capital Reserves — Accumulated fund balances set aside for specific capital projects. Charges for Services — Fees charged to outside users to cover the cost of providing services (e.g. utility rates, golf course and swimming pool fees, transit fare box revenues). Intergovernmental Revenues — Revenues received from other governmental agencies (i.e. federal, state, and county). This category includes primarily grants and state- shared revenues (such as gas and liquor tax revenues). Operating Reserves — Accumulated fund balances in operating funds. Prudent reserves generally are a minimum 7 -11 °0 of annual operating budgets. Other — All revenue sources which are not included in other categories. This includes primarily investment income, program income, fines and forfeitures, and licenses. Taxes — Tax assessments are levied for the support of the governmental entity Sales tax is the largest item in this category It is followed by property tax, utility and franchise taxes, and various other business taxes. The first graph identifies the total revenue picture by category The second revenue graph depicts the relationship of the various revenue sources to each function. Lastly, included is a graphic by major object (or type) of expenditure, net of double budgeted expenditures. 20— Exhibits • Supplemental Information ono/Yakima TOTAL RESOURCES BY CATEGORY 2013 BUDGET TOTAL RESOURCES = $209 285 388 (Excludes Inteana$ Serrate Funds and other double budgeted resources of $46,275,304) Other Capital Reserves $8 $23,36,871 3 9 °% Taxes 112% .$59,387 CCO 264% OperattngReservee $22,242.802 10 6% Borrowings $25,225,000 Intergov t 121% $28,157456 ChargesforServiaes 135% $42,816,258 20 5% Sup/Rem ental Information • Exk:bas - 22 cm OF ('aka TOTAL RESOURCES BY CATEGORY AND SOURCE 2013 BUDGET Police & Fire IM____ Gen Government Parks & Recreation Street Operations Street Construction Gen Govt Const G 0 Debt Service Special Revenue Li Transit Utilities I 1 1 1 1 1 1 1 1 I ($10 0) $0 0 $10 0 $20 0 $30 0 $40 0 $50 0 $60 0 $70 0 $80 0 $90 0 0 Taxes • Intergov't • Charges • Borrowings • Operating 0 Capital • Other for Services Reserves Reserves 22 — Exhibits • Supplemental Information ono /Yakima TOTAL EXPENDITURES BY TYPE 2013 BUDGET TOTAL EXPENDITURES = 3164,117 987 (Excludes double budgeted expend :tuns of $41,648,999,1 Debt Samoa $8,719,266 5 3 % Salanes Capital $50,091 420 $50,727471 305% 30 9% Intergodt Benefits $3,791,163 Supplies $18,227597 23% Other Services $7505,785 11 1% $25,055,285 4 6% 15 3% Supplemental Information • Exit:b:is - 23 24— Exhibits • Supplemental Information 0,1fibett 1 00A 6 v. ,y)t MEMORANDUM To: Honorable Mayor and Members of the Yakima City Council From: Dave Ettl, Council Member Date: December 12, 2011 Re: budget proposal — REVISED Hello fellow City Council persons. I have a pre -LAST- meeting -of- the -year proposal for your consideration. I plan to make a motion at tomorrow's meeting and because of its potential impact on the future; I didn't want it to catch you off guard As it stands now we have approved a 6% utility tax increase that will raise $2 million a year and will basically just maintain the status quo in terms of service to City residents. I am of the belief that such an increase in tax, without an upgrade in service, should be voted on by the public. I believe Bill Lover expressed a similar concern at the last meeting. Rick Ensey has indicated his interest in overturning the vote next year because he doesn't believe the people want it or can afford it. We hear over and over "live within your means ". Rick has indicated he has Sara Bristol's agreement. Is Rick right? Is that what people want? I am willing to find out. Will the residents be willing to vote to overturn the utility tax increase for no increase in service? I believe they will. I think most of us believe that such a vote would fail at the polls. I don't know if I would join a Council vote to overturn the tax or not because I PREFER a citywide vote on the issue as I have said from the beginning. So, if Rick trusted City residents to vote no, and thus was willing to put it up to a vote in the new year, I could certainly support that. If Bill and Sara agree, which I assume they would, the tax increase with its six police officers dangling in the balance would go back to City voters. Then we would all know for sure how voters feel about the current Priorities of Government (POG) model budget reinstatements If Rick is wrong, and the public votes yes and nothing changes, then we get what we have. If he is right, and the public votes no, then that will result in no tax increase and the loss of six police officers. This would come at a time when the Congressional Quarterly has just reinforced what we already know about Yakima's crime and gang problem. Yakima is ranked as one of the 10 worst cities for crime in the nation for a city of our size. The questions to consider are: 1. Is this what's best for the city at this time? 2. Do you believe that Rick will really move to rescind the vote after Dave Edler is off the council? 3. Is a public vote a risk that Maureen, Kathy, Dave Edler and Micah (four of the five original "yes" votes) are prepared to take? Now, to my point. At the last meeting I made a motion for a 5% increase with the money funding 10 police and reserves. As you will recall, this motion was voted down. In retrospect a "yes" vote would have done much needed good to law enforcement and would have negated the threat of an overturn. Hey, even the Yakima Herald Republic editorial board wrote that I had a point when it quoted me as saying we missed a huge opportunity to bolster police and fight crime. So, tomorrow I will make a new motion. I ask you to consider its merit in light of our crime fighting needs, the likelihood of the current tax being overturned, and the important messages we need to send to our community, criminals, and gangs. I will move that we reallocate the 6% utility tax distribution from reinstating P.O.G. model cuts to substantially investing in fighting our crime problem. In essence that motion will: 1.) Make the P.O.G cuts and the supplemental cuts as outlined by the City Manager sending a message to the residents of Yakima that we are prepared to suck it up, make tough million -plus dollar cuts to the general budget, and position ourselves to better "live within our means ". 2.) Insure the implementation of the 6% utility tax which would be used to hire, train, and outfit 12 police officers, preserve the prosecuting attorney's secretarial capability, hire a Gang Free Initiative Coordinator, set money aside for a Gang Free Initiative (GFI) program implementation, and set aside some money to offset anticipated cuts in State shared revenue to the City This would send a message to the criminals and gangs that we are serious and proactive about our number one community priority of Public Safety. It would also send a message to our residents that we acknowledge that extreme times, such as our current criminal climate, call for extreme measures such as a utility tax increase We would take additional steps above and beyond what we are doing now to create a safer community where ultimately business and prosperity will feel safe in returning. We say it all the time .. "until we get a handle on gangs and crime... blah blah blah" Now it's time to step up. 3.) In addition, we already made a sizeable investment in time, money and community effort in the GFI which has more or less stalled out due to lack of funding. This can be an important weapon in the war on gangs and had to be implemented or we risk losing all interest, momentum, and the value of past investment. 4.) Yes, we are open to unions going after the money. But yes, we are still open to that even without additional money being raised. Generally speaking, the money breaks down this way. J t ,. Cost for 12 additional police officers per year $1,100,000* Cost to outfit and train (one time) $500,000** * *These costs will be phased in over the course of 15 months -- hiring can be regulated not to exceed $1.3 million in year one ** Secretarial help for Prosecutor $80,000 Restore firefighter position $80,000 Gang Free program Implementation $140,000 Money set aside to offset anticipated state cuts $400,000 Total $2,000,000 After the initial training and outfitting, as we continue to fight gangs and crime in subsequent years, the $500,000 can be used for other law enforcement needs and proven effective GFI programs. If there is support for this plan with even three of the four votes that passed the original utility tax, I think it is safe to say it will hold up in the new year and will pay dividends to our City's safety for years to come If there isn't enough support for it to pass there is a pretty good chance the emotion of tax burdened voters will decide the future direction of our City and its safety. I prefer my plan but I can live with either. Thanks for your consideration in the difficult matter of taxation in tough times versus the need for public safety Call if you have any questions 949 -6931