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03/23/2021 04 Fiscal Sustainability, Financing Public Safety VehiclesB US INE S S O F T HE C I T Y C O UNC IL YAK I M A, WAS HI NG T O N AG E ND A S TAT E M E NT I tem No. 4. F or Meeting of: March 23, 2021 I T E M T IT L E :Fiscal S ustainability and Financing of P ublic S af ety Vehicles S UB M IT T E D B Y:Bob Harrison, City Manager Steve Groom, Finance Director A aron Markham, F ire C hief Matt Murray, P olice C hief S UM M ARY E X P L ANAT IO N: This is an update to the f inancial sustainability and planning to provide f or the scheduled replacement of public saf ety vehicles. T hese vehicles are in the Capital B udget, f unded by General F und revenues, so this discussion will include overall fiscal planning of the General F und with a long-term f ocus. A ll C ity department D irectors, led by the C ity Manager, are re-evaluating city-wide expenditures and coordinating ef f orts focusing on identif ying savings and redeploying them strategically. Vehicle financing is a large piece of this but not the only component. P ublic S af ety command staff is similarly re-evaluating replacement and maintenance planning. I T E M B UD G E T E D:NA S T RAT E G I C P RIO RIT Y:Public Trust and A ccountability AP P RO V E D F O R S UB M I T TAL B Y T HE C IT Y M ANAG E R RE C O M M E ND AT IO N: AT TAC HM E NT S: D escr iption Upload D ate Type Sustainability and Vehicles presentation 3/19/2021 Presentation 1 Fiscal Sustainability 2 2021 Action Plan City Manager objectives: •Improve service efficiency and productivity •Align resources with strategic objectives •Recognize and plan for both short-term and long-term obligations •Invest in employee development and maintain competitiveness •Enhance the effectiveness of services and improve reporting of strategic priorities related to desired outcomes 3 2021 Action Plan Immediate steps •Current staff vacancies frozen, require City Manager approval •Contracts and leases under review for City-favorable terms •Current expenditures under Department Head savings review •Coordinate efforts with Finance, IT, HR, and Legal to assist in senior staff review efforts and obligations that may exist contractually or otherwise •Technology opportunities (improve customer experience and efficiency effectiveness) •Long-term focus on needs; collecting, capturing and planning 4 2021 Action Plan 1. Senior Staff identifying cost savings •Current year 2021 •New run rate by 2022 2. 2022 Budget process targeting identified needs •Vehicle /equipment funding •Mill site •CBA agreements •Insurance cost 5 Exploring Possible Shared Dispatch 6 MRSC’s Guidance On E-911 Sales Tax A County revenue that can be shared with an Interlocal Agreement 7 Potential Shared Savings Potential .1% or .2% new revenue to County Potential City Savings $1.7M 8 Exploring Regional Fire Authority 9 MRSC’s Guidance On RFA and Property Tax City Property Tax Cap of $3.10 could go to $2.10 Staff is exploring RFA factors Reduction to Property Tax revenue would have to more than offset expense reduction 10 Vehicle Replacement 11 Perpetual Vehicle Replacement Strategy Options Fire: Repair and maintenance has extended useful lives, changed order of replacement Annual funding $1,000,000 Police: Re-evaluating fleet size and policy Annual funding $1,000,000. 12 Perpetual Vehicle Replacement Financing Options Cash management: 1) Fund Capital Replacement Funds for 2022 with 2021 savings as we capture 2) Improve capital replacement fund balances beginning now 13 Perpetual Vehicle Replacement Financing Options Debt: Trying to avoid debt Not a long-term solution Interest rates are low, most recently: •0.68% most recent 10-year financing 14 Perpetual Vehicle Replacement Financing Savings being managed to proceed Next steps: Capturing savings through re-budgeting Evaluating maintenance vs purchase 15 Revenue Options 16 Revenue •County Shared Dispatch .1% Sales tax Pending County exploratory discussion •RFA Property Tax sharing Pending needed input, feasibility study •Levy Lid Lift A council discussion every year, Sept. valuations Last vote failed, 2020 17 Levy Lift Capacity $4.2 million Most recent assessed valuation $7,942,000,000 Rate Cap $3.10 Maximum Levy $24,600,000 Current Rate $2.56 2021 actual levy $20,400,000 Potential levy capacity $4,200,000 18 American Rescue Plan Act •Knowns •City of Yakima’s allocation $25.5 M, signed March 11th •Payments expected 50% in 2021, 50% in 2022 •Unknowns •Eligibility guidelines from Treasury pending •Language •Respond, mitigate and cover costs of public health emergency and economic impacts •Premium pay for essential work by eligible workers •Provision of government services to replace lost revenues •Necessary investments in water, sewer, or broadband infrastructure •Recovery efforts to be completed by 2024 19 Voted Options 20 Elections Calendar Overall County Yakima County 0.3% Criminal Justice Sales Tax Nov 8, 2021 21