HomeMy WebLinkAbout10/21/2013 02 2014 Preliminary Budget PresentationBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting of: 10/21/2013
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ITEM TITLE:
SUBMITTED BY:
SUMMARY EXPLANATION:
2014 Preliminary Budget Presentation
Tony O'Rourke, City Manager
Cindy Epperson, Director of Finance & Budget
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Insurance Required? No
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Description
❑ 2014 Budget Message
City Manager
Upload Date
10/17/2013
Type
Cover Memo
INTRODUCTION: TRANSMITTAL
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MEMORANDUM
TO: Honorable Mayor and Members of the Yakima City Council
FROM: Tony O'Rourke, City Manager
DATE: October 17, 2013
SUBJECT: City Manager's 2014 Preliminary Budget Summary
I am pleased to submit for City Council review and consideration the 2014 Preliminary Budget.
This budget is balanced, prudent, and responsive to the City Council's and community's strategic
priorities and needs. The 2014 budget is committed to ensuring a safe community with a thriving
economy that spurs job growth and makes important investments in community infrastructure and
appearance.
Producing a balanced budget has been challenging given the sluggish recovery from the worst
recession in modern time, but we are gradually bouncing back to pre -recession revenue levels.
Nevertheless, local residents and businesses are still struggling given Yakima's economy continues
to lag behind the state and national economies. Our community's unemployment rate is 8%, while
the state and national unemployment rates are 7% and 7.3% respectively. In addition, Yakima
suffers from a 21% poverty rate compared to a national poverty rate of 16% and state rate of 13.5%,
and to compound matters, Yakima has the highest percentage (25%) of residents without health
insurance in the state. Finally, public confidence in the local economy is weak, given 76% of the
2013 Citizen Survey respondents rated the community's overall economic health as fair or poor.
Given these economic challenges, the FY 2014 budget is not proposing any new taxes to further
burden businesses and residents. Instead, we propose a bold and balanced 2014 budget to deliver
on the community's priorities within existing resources. To that end, this budget is driven by the
results of the 2013 Citizen Survey that expressed a strong need to address the City's public safety
challenges, and deferred infrastructure backlog, and to improve the appearance of the community
Introduction • Section I —1
and stimulate economic development. As reflected in this year's survey results, the following areas
were rated as essential or very important for the City to invest in:
➢ Public Safety 90%
➢ Economic Development 90%
➢ Fire Service 84%
➢ Community Appearance 76%
➢ Infrastructure Improvements 75%
➢ Community events/activities 56%
These expressed community priorities align perfectly with the City Council Strategic Plan priorities
and underscore the necessity to stay the course and continue to deliver on the public's and City
Council's core priorities. Investments in the community's key priorities are highlighted in the
following budget overview.
CITY BUDGET
The proposed FY 2014 City Budget, including all funds, is balanced. The FY 2014 expenditure
budget is $206,214,707 and represents a $2,238,787 or 1.1% increase over the projected FY 2013 year-
end expenditures. The 2014 expenditure budget of $206.2 million is supported by revenue of $193.1
million and surplus reserves of $13.1 million. At the end of 2014, citywide budget reserves are
projected to be at $47.3 million, or 23.0% of 2014 budget expenditures. The following chart
highlights expenditures and changes in the 2013 projected year-end budget and proposed 2014
budget.
2013 VS. 2014
REVENUE BUDGET COMPARISON
2013 13 vs. 14
Year -End 2014 Budget
Estimate Budget % Change
General $53,494,980 $57,181,843 106.9%
Parks and Recreation 4,346,215 4,357,215 100.3%
Street & Traffic Operations 5,230,123 4,596,360 87.9%
General Government Subtotal 63,071,318 66,135,418 104.9%
Utilities/Other Operating 65,321,537 64,449,505 98.7%
Capital Improvement 52,451,182 41,428,617 79.0%
Risk Management Reserves 3,638,900 3,360,500 92.3%
Employee Benefit Reserves 13,444,849 11,802,538 87.8%
G.O. Bond Debt Service 3,594,215 3,186,671 88.7%
Utility Revenue Bond Debt Service 2,129,686 2,146,286 100.8%
Trust and Agency Funds 527,200 625,171 118.6%
Total $204,178,887 $193,134,706 94.6%
2 — Section I • Introduction
2013 VS. 2014
EXPENDITURE BUDGET COMPARISON
Fund
General
Parks
Streets & Traffic
General Government Total(1)
Utilities/Other Operating
Capital Improvement
Risk Management Reserves
Employee Benefit Reserves
G.O. Bond Debt Service
Utility Revenue Bond Debt Service
Trust and Agency Funds
Total - Citywide Budget (2)
2013 13 vs. 14
Year -End 2014 Budget
Estimate Budget % Change
$53,431,800 $56,936,456 106.6%
4,128,949 4,412,448 106.9%
5,335,438 4,786,409 89.7%
$62,896,187 $66,135,313 105.1%
66,633,842 67,637,845 101.5%
52,210,864 50,112,615 96.0%
3,795,852 3,371,576 88.8%
12,09 7,944 12,843,824 106.2%
3,690,000 3,346,079 90.7%
2,127,561 2,144,786 100.8%
523,700 622,671 118.9%
$203,975,950 $206,214,709 101.1%
GENERAL GOVERNMENT FUND
The Preliminary 2014 General Government fund expenditure budget, which represents most core
city services, is balanced at $66,135,312 and represents a $3,239,125 or 5.1% increase over the 2013
year-end projected expenditure budget. The revenue budget is $66,135,418 and represents a
$3,064,500 or 4.9% increase over the projected 2013 year end revenues. The 2014 year-end General
Government operating reserves are projected to be $11,668,324 or 16.7% of 2014 expenditures,
which conforms to the City Council's financial management policy of 60 days of working capital to
meet unforeseen, one-time expenditures of an emergent nature, such as a natural disaster,
catastrophic occurrence, or excessive liability judgment.
The 2014 General Government incremental revenue growth of $3 million is based on the following:
➢ Proposed 1% inflation adjustment in property tax levy plus an estimate
of 0.7% new construction. The combined general operating and debt
service property tax levy will decrease by .36% over 2013 combined tax lev
➢ 5% growth in sales tax (3% base plus new major retailer)
➢ Franchise and utility tax growth of 5.3% ($500,000 cable tax moved to GG)
➢ Charge for services growth of 14.8% (New Engineering Programs)
➢ State liquor excise tax reinstated
y•
BALANCING STRATEGY
We have balanced the 2014 General Government Fund budget using the following
$285,000
$720,000
$777,500
$904,000
$150,000
strategies:
➢ Instituting a 2% vacancy rate. Personnel costs are budgeted at 98% to accou
minimum 2% position turnover/vacancy - Savings: $950,000
➢ Attrition/vacancy of positions - Savings: $175,000
➢ Health plan cost down 15% - Savings: $1,000,000
➢ Jail contract - Savings: $324,000
nt for a
Introduction • Section I - 3
BUDGET PRIORITIES
Public Safety
The core obligation of government is to provide a safe and secure environment for its residents,
businesses, and visitors. Despite a 60% reduction in crime per capita since 1988, random acts of
gang violence, property crime, and auto theft have created significant community concern about
public safety in Yakima. Based on results of the 2013 Citizen Survey, only 23% of residents rated
their overall feeling of safety as good or excellent. Additionally, 29% indicated a household
member had been a victim of a crime in the past twelve months. In addition to crime, the City
experienced 129 fire station brownout days last year. This represents the number of days the City
did not have a complete complement of fire station personnel and equipment to respond to fire and
medical emergencies.
To ensure healthy and vital neighborhoods, the City will continue to place a premium on crime
prevention and suppression, fire and life safety, gang free initiatives, and an appropriate level of
public safety services for Yakima.
Targeted Public Safety Investments
Expand Police Force Presence and Response Capacity $798,000
Currently the City has 1.59 officers per 1,000 residents. The western states average is 1.8 police
officers per 1,000. Accordingly, we are 14% (or 20 officers) below the western states standard. To
meet the western states average would require the hiring of 20 officers at a cost in excess of $2
million annually. Pay for that number of new officers would require a 12% property tax increase.
Given the public's disdain of tax increases, such a revenue increase is not viable. Accordingly, it is
far less expensive to increase our police presence with assigned patrol vehicles than to hire an
additional 20 police officers.
To that end, in mid 2013, the City Council approved the purchase of 74 patrol vehicles for
assignment to all police patrol officers. Assigned police patrol vehicles will dramatically increase
the maximum number of patrol vehicles in the City from 16 to 74. The cost to purchase 74 patrol
vehicles is $4.7 million or $798,000 annually in debt service for the next six years.
In the absence of the proposed purchase of 74 patrol division assigned vehicles, the City would still
have to purchase approximately 72 to 80 patrol vehicles over the next six years based on past
purchasing practices. The vast majority (92%) of the annual debt service cost is offset by the
deferral of police wage increases for the next two years as agreed by the Yakima Police Patrolman's
Association.
Assigned police patrol vehicles will enhance police presence in the community, improve police
response time, supplement on -duty police, and reduce vehicle maintenance and operating costs.
Eliminate Fire Service Brownouts and Enhance Fire Department Training $528,900
Last year the City did not have adequate fire staffing to operate a full complement of fire service
equipment 129 days (35%) of the year. Such days were considered "brownout" days. To remedy
this situation, $250,000 in additional overtime funds have been included in the proposed FY 2014
budget. In addition, $300,000 in next year's proposed budget has been included that will allow the
4 — Section I • Introduction
hiring of two additional firefighters and a third to fill the firefighter vacancy that resulted in
reestablishing and filling the Training Lieutenant position. This will ensure adequate staffing and
eliminate brownout days. Overtime funds will also be used to meet peak staffing demand periods
in lieu of full-time staff. In addition to the personnel increase, $75,000 is budgeted in FY 2014 for
additional training to ensure increased fire personnel skills, safety, and career development.
Expand Downtown Bike/Foot Patrols $64,800
Given the public safety and security concerns about downtown, particularly at night, as reflected in
the 2013 Citizen Survey, the proposed FY 2014 budget includes expanding the downtown bike/foot
patrol from the existing summer patrols to both spring and fall patrols as well. The additional
patrols will include March through mid-June and mid-August through October. There will be two
officers on six -hour shifts, four days a week during these additional periods.
Purchase New Fire Brush Truck $130,000
The Yakima Fire Department operates two wild land brush trucks to respond to wild land/urban
brush and grassland fires. One of the brush trucks is 23 years old and is in need of replacement.
The purchase of a new brush truck will ensure the department has reliable and capable wild land
fire suppression capabilities.
Police Training $75,000
The Yakima Police Department is projecting significant senior and supervisory management
turnover during the next several years. To properly develop the future leadership of the
department, the proposed FY 2014 budget includes the investment of $75,000 to provide leadership
and management training for new police managers and to prepare patrol -level officers for career
development opportunities and skill sets.
Indigent Defense $600,000
The Washington Supreme Court has imposed a new caseload limit for attorneys providing public
defense services 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. Due to the
City's heavy DUI and domestic violence caseloads, case weighting is not a preferred option.
Accordingly, the criminal caseload of a public defender cannot exceed 400.
To reduce the cost impacts of the Supreme Court decision on indigent defense, the City has
employed 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 one third. In addition to
employing these two initiatives, the City's Prosecuting Division will also reinstitute prosecution of
shoplifting cases below $50. We anticipate this initiative will add another 200 cases to our criminal
caseload. However, the overall reduction in case filings will reduce the number of additional full-
time defense attorneys needed to comply with the Washington Supreme Court Rule from nine
required under our original caseload to four under the projected caseload. To meet the demands of
the additional four defense attorneys, prosecution staffing levels will need to be increased by one
attorney at a cost of $88,550. The total cost of indigent defense services will be $600,000 in 2014 and
will top $960,000 (or $360,000 more) when the additional needed indigent defense attorneys are
added in 2015.
Introduction • Section I - 5
Gang Free Initiative Operations Manager $88,600
The proposed FY 2014 budget includes the hiring a Gang Free Initiative Operations Manager to
direct, manage, and oversee the operations of the Gang Free Initiative and ensure the effective
public and private sector coordination and integration of resources directed toward the prevention
and intervention of gang related crime and violence.
Automated License Plate Reading Technology $135,000
Yakima currently ranks fifth nationally per capita in auto thefts. The City of Yakima remains
committed to reducing auto thefts and plans to lower incidents of theft and increase recovery of
stolen vehicles by purchasing automated license plate reader systems for eight police vehicles.
Additionally, the license plate reader technology will be utilized in the investigation and
prosecution of a variety of other crimes.
Parking Enforcement Officer $56,800
The Yakima Police Department proposes to add one full time parking enforcement officerThe
additional officer will be dedicated to downtown parking enforcement, with a specific focus on
parking space turnover. For the last three months the department has been using a full-time
temporary employee to determine the need for this position to become permanent. Results have
shown that the officer is currently averaging 63 parking infractions a week, with 40 of those being
for overtime violations. It is projected that in 2014 this position will issue 2,450 total parking
infractions with 1,470 of those being for overtime violations. With continued and ongoing
enforcement of downtown parking regulations the department is convinced that parking spaces
will continue to turn over and be available for shoppers, and that parking space abuse will be
greatly reduced.
Communications/Dispatch Reorganization $142,200
Three years ago the City combined the management of the Communications Division and the
Information Technology Services (ITS) Division as a cost savings measure to assist in the
reorganization of the ITS division during tight budget times. While that measure has proven
largely successful, given the proposed reorganization of the Communications Division and
increasing demands on the ITS Division, it has become more challenging. Therefore, it has been
determined that it is in the best interest of the City to return the two divisions to separate
management structures. This will specifically split the manager position back into two separate
positions. Additionally, the Communications Administrative Assistant will focus solely on
Communications Division duties while the duties of the ITS Administrative Assistant will be
expanded to include in-house computer user training.
While the City has enjoyed the cost savings of over $100,000 per year with this consolidation, it is
not viable to continue because of workload and critical public safety initiatives that will require
significant attention, more than can be provided by this shared position.
Communication Center Construction/Relocation $195,000
The Communications Center operates as a joint facility with the County 911 system and the City's
dispatching system. The associated 911 costs are paid via an operations contract with Yakima
County from the 911 revenue raised by the 911 excise tax. The dispatch section is funded by the
City with a portion supported by dispatching contracts with outside fire and police user agencies.
6 — Section I • Introduction
The Communications Division has just completed the pre -design study for the new joint
communications center located in the county -owned, old restitution center in Union Gap. The
purpose of this phase is to identify needs, create a preliminary design, and determine costs for the
project. The initial cost estimate for the joint facility is $7.2 million of which $2.9 is from 911 and the
balance, or $4.2 million, coming from the City's dispatch operations.
ECONOMIC DEVELOPMENT
Given the community's desire for more living wage jobs, retail opportunities, enhanced air service,
and economic diversification, the City is committed to the following new initiatives to foster a more
robust and diverse economy for Yakima.
Targeted Economic Development Investments
Downtown Master/Retail Plan $170,000
Plaza Design ($145,000)
The Downtown Yakima Master Plan developed by the Crandall Arambula consulting firm has
identified essential concepts and created a roadmap for initiating a successful transformation of
Downtown Yakima to a vibrant, cultural, arts, and entertainment destination. The first step in this
transformative process is the creation of a public plaza in front of the Capitol Theatre. To that end,
it will be necessary to retain a consulting firm to design and develop conceptual plans for the
proposed public plaza.
Retail Plan ($25,000)
Throughout 2013, Thomas Consulting developed a retail element of the Downtown Yakima Master
Plan. It is proposed that Phase 1 of the retail element of the plan, which consists of proactively
marketing Downtown Yakima to potential investors and site selectors, be initiated in 2014. Phase 1
will also include the formation of a Downtown Yakima Retail Task Force, which will attend the
International Council of Shopping Centers annual conference in Las Vegas in order to meet with
prospective investors and developers.
Downtown Special Events $110,000
By providing increased police security, expanded free parking, creating new Thursday night and
Friday lunchtime concert series, and establishing a Tuesday evening Farmers Market, the City has
begun to attract Yakima residents back to the downtown core. Building on the first phase of
downtown activities initiated in 2013, additional events are being proposed for 2014 to create even
more energy, animation, and vibrancy to downtown. With a proposed budget of $110,000, more
City/private sector sponsored events such as a Cultural Concert Series, Spring Barrel Art Festival,
Blues and Brews Festival, expanded Fresh Hop Ale Festival, and enhanced holiday activities will
take place. The goal is to elevate the quantity and quality of Downtown Yakima events in 2014 in
order to continue to develop the area's growing reputation as a cultural, arts, and entertainment
destination.
Airport Marketing and Terminal Improvements $150,000
In partnership with our new airport public-private sector alliance, the City will work with local
media partners to market and promote air service at the Yakima Air Terminal to the local
community. The ultimate goal of the $100,000 marketing commitment is to increase our current
Introduction • Section I - 7
load factors to secure a fourth daily flight by Alaska Airlines from Yakima to Seattle and eventually
expand service to new destinations such as Portland, Spokane, and Salt Lake City.
The current air terminal is 63 years old. To enhance the terminal's overall appearance, the
proposed FY 2014 budget includes the investment of $50,000 for new carpeting and paint.
Cascade Mill Site $2,400,000
The City of Yakima has a number of initiatives related to the Cascade Mill Redevelopment Project
in 2014. The estimated FY 2014 budget investment of $2,400,000 represents the estimated cost of the
program in 2014. This is funded by the Local Infrastructure Financing Tool (LIFT) funding
reimbursement from the State of Washington of $1.0 million annually and a Yakima County SIED
loan/grant is available in the amount of $1,850,000 if needed.
➢ In 2014, the City will be working closely with the Department of Ecology (DOE) to prepare
the permitting documents for cleanup of the former municipal landfill and the removal of
wood waste.
➢ In 2014, a funding strategy will be developed in cooperation with DOE for use of Brownfield
and Model Toxic Control Act (MOTCA) grant funds for the cleanup and remediation of the
landfill and the plywood plant sites.
➢ In 2014, the City will hire an urban land economist to assist in determination of the most
desirable land uses at the Cascade Mill property that compliment but do not compete with
the downtown area.
➢ A roundabout is planned at the intersection of Fair Avenue, Lincoln Avenue, and MLK, Jr.
Blvd. A $990,000 state grant application was submitted in 2013.
➢ The City will proceed with right of way acquisition, as necessary, and the completion of
engineering plans for the Cascade Mill Parkway. The first phase of the Cascade Mill
Parkway includes construction of the Fair Avenue roundabout to facilitate environmental
cleanup at the landfill site. We anticipate a donation of land that will substantially meet the
$1.0 million local match requirement.
➢ The federally required Interstate 82 Interchange Modification process will be largely
completed in 2014. The Washington State Department of Transportation is the lead agency
for the Interchange Project and will be supported by the City and Yakima County.
➢ The City and County have a contract with Lochner & Associates to prepare the engineering
and environmental review of the Interchange Project, the East-West Corridor and the
Cascade Mill Parkway. Other development site issues have also been addressed under this
professional services contract.
BUILT ENVIRONMENT
The City's overall appearance and infrastructure are critical components of the public's perception
of the community's image, quality, and vitality. Based on the 2012 and 2013 Citizen Surveys, the
community's perception of the current built environment falls far short of its expectations. The
restoration of the City's built environment is a necessity if Yakima residents are to express a more
positive attitude about Yakima.
To that end, the following 2014 initiatives are proposed to enhance the visual quality of the
community and to ensure the provision of essential infrastructure.
8 — Section I • Introduction
Targeted Built Environment Investments
Road Improvements $2,000,000
The City's 802 lane miles of roads have an average Paving Condition Index (PCI) score of 54. Based
on a 100 -point scale, the City's current road conditions are poor. Compounding this situation is the
fact that while 3% of Yakima's roads are currently classified as failed, 23% or (185 lane miles) are
projected to attain a failed classification by 2020 if not rehabilitated soon. The Yakima public is well
aware of this, given almost 80% of the 2013 Citizen Survey respondents rate street repairs as fair or
poor. Additionally, 72% of voters supported a City Charter amendment in August 2013 requiring
the City to invest at least $2 million annually on the restoration or reconstruction of Yakima streets.
The cost to rehabilitate one lane mile of road with a grind and overlay is approximately $180,000.
The cost to reconstruct a road after it has failed is approximately $600,000, or 300% more than to
grind and overlay it. A pay-as-you-go $2 million dollar annual cash committed approach would
enable the City to grind and overlay approximately 11 lane miles annually, assuming road
construction prices remain static. This pace of road rehabilitation is insufficient to prevent the
projected failure of at least 60% of the 185 lane miles of road projected to fail by 2020.
In 2013, the City Council appropriated $375,000 for the first annual payment on a $5 million, 15 -
year loan to grind and overlay 28 lane miles of road. Public response to this work has been very
positive.
Staff proposes building on the 2013 road improvements and taking advantage of excellent road
rehabilitation pricing with an aggressive 2014 road rehabilitation plan based on issuing a 10- year
term bond of $16 million dollars to grind and overlay 92 lane miles of arterial streets and residential
streets, such as Summitview, Lincoln, Washington, 1st Street, Nob Hill, Tieton, 19th Avenue and 2'
Street. This aggressive plan will prevent having to reconstruct these critical streets at a much
higher cost and will extend their useful life by 10 to 15 years.
The annual debt service on a 10 -year term, $16 million dollar road rehabilitation bond is
approximately $2,000,000. This investment would meet the minimum City Charter obligation to
spend $2 million annually on road rehabilitation or reconstruction.
An alternative plan is to issue a 10 -year term, $12.3 million dollar bond to grind and overlay 68 lane
miles of arterial streets at an annual debt service of $1,500,000 for the next 10 years and invest
$500,000 in cash to rehabilitate an additional 2.5 miles of residential roads.
Given the short time span to prevent the failure of 185 lane miles of road by 2020, the staff
recommends the more aggressive plan to grind and overlay 92 lane miles of road in 2014, and
identify additional resources in the near future to address the additional 93 lane miles of arterial,
collector, and residential streets that are projected to fail by 2020.
Airport Taxiway/Airfield Lighting Improvements $11,100,000
The Yakima Air Terminal is an integral part of the City's transportation system and economic
development infrastructure. Through close cooperation with the Federal Aviation Administration,
the Airport recently received two grants totaling $10 million matched by $1.1 million in airport
passenger fees to rehabilitate the airport's primary taxiway and associated taxiway connectors. In
Introduction • Section I - 9
addition to the two grants, the airport will utilize its passenger facility charges to fund the
remaining balance of the project. This project will replace aging asphalt, taxiway lights, taxiway
signs, and airfield markings to ensure the airport will continually meet Federal Aviation
regulations while meeting future aviation demands. This project is slated to begin in spring 2014
and should be completed before year's end.
Street Right of Way / Street Cut Program $150,000 (New Revenue)
When commercial or utility entities perform maintenance or construction activities in the City's
street right of way, they interfere with the public's ability to use that portion of the right of way,
create potentially dangerous obstacles to the traveling public, and often damage public
infrastructure.
Excavation of paved streets degrades and shortens the service life of streets. Over 17 nationwide
studies have provided conclusive evidence that no matter how well a utility cut is restored, there is
permanent damage beyond the area of the utility excavation. These excavations increase the
frequency and cost to the public of necessary street resurfacing, maintenance, and repair.
The City's current street cut permit fee of $100 and the associated patching of utility cuts completed
by utility companies do not compensate the City for long-term damage caused by utility cuts. A
street cut fee is an effective incentive for utility companies to coordinate their excavations with the
City's repaving schedule and generate funds to pay for road resurfacing that becomes necessary
due to long-term damage caused by cuts. This is particularly critical now that the City is making
significant investments to improve its streets.
Based on the completely revised and updated chapter of the Yakima Municipal Code, the
Engineering Division is proposing adoption of a comprehensive right of way encroachment and
street cut program which will enable the City to control the duration and extent that an entity
encroaches in the street right of way, improve the safety precautions taken to protect the public and
the workers, and revise the permitting fee structure so that the cost of the permit is commensurate
with the size and duration of the encroachment. Additionally, entities that cut City's pavement will
not only have to repair their damage, but they will have to pay a restoration fee that will be used
for future road resurfacing and replacement. Ultimately, the program goals are to reduce the
amount of time that the traveling public is inconvenienced by commercial activities in the right of
way, dramatically improve work zone safety, and protect the City's infrastructure.
North First Street Improvements $1,200,000 - 2014 / $1,518,000 - 2015
In 2013, the City Council authorized a landscape architect to prepare a final design for the
landscape and pedestrian environment of the North First Street Revitalization Project, Phase 1
element (I-82 to "N" Street). Phase 1 will include selecting a preferred alternative from a limited
choice of options. In 2014, a civil engineering firm will be selected to prepare construction
documents for the project design which will include the design for undergrounding of power and
other utilities. Construction drawings and plans should be completed in the summer of 2014.
Project construction is expected in early 2015 and will be funded by a Surface Transportation
Program grant of $2,718,000. The City could spend up to $1.2 million of the grant in 2014 and the
remaining grant funds in 2015.
10 - Section I • Introduction
In 2014, the City will continue seeking funding for additional phased construction of the North First
Street Revitalization Project (from "N" Street to Lincoln Avenue). Finally, police, fire, and code
enforcement will continue to ensure life and public safety and sign violations and issues are
addressed along the North First Street Corridor.
Seasonal Graffiti Abatement Coordinator $50,000
To improve the visual quality of the City, the City proposes to budget a second Graffiti Abatement
Coordinator for five months in 2014 to assist, organize, and direct the cleanup of graffiti sites soon
after they are reported in order to diminish the visual blight graffiti creates in the community.
Update Stormwater, Wastewater, & Industrial Wastewater Rate Studies $110,000
The City of Yakima is required to complete a utility rate study that will determine the billing rates
required to provide utility services. The existing Wastewater and Stormwater Rate Ordinances
expire at the end of 2014. The study, which will be conducted in 2014, will also initiate rates for the
City's recently built industrial wastewater treatment process. The City will seek the services of a
third -party financial consultant to complete an analysis of all three utilities and recommend a rate
structure for the next three years. The study will include a forecast of operating revenues,
expenditures, capital needs, and compliance with debt service and cash reserve policies to provide
a rationale and fair rate revenue strategy for our utility customers.
Reinstate One Supervising Traffic Engineer $94,100
The existing Traffic Engineering Division consists of the Streets & Traffic Operations Manager, a
Traffic Systems Analyst, and two Traffic Engineering Technicians. The Supervising Traffic
Engineer position was eliminated in the 2010 budget as a cost cutting measure. The position was
eliminated with the understanding that it would need to be reinstated when the economy
recovered and development returned. The present workload is significant enough that it is difficult
for the Streets and Operations Manager to provide timely and detailed review and guidance of
development applications, citizen requests, traffic signal timing patterns, traffic data collections,
and traffic safety analysis while still providing adequate oversight to the street and traffic
maintenance programs. Existing staff does not have the training nor expertise to take on most of
these tasks. Other work that needs to be done that has been deferred includes development of
prioritized traffic safety and operations capital improvements lists, update of traffic policies and
standards, and a detailed annual review and analysis of high accident locations.
Expand Code Enforcement $100,000
For the past two years, the City's Code Enforcement services have been rated as poor in Citizen
Surveys. The Code Enforcement Division believes these ratings are the result of insufficient staffing
levels and the City's "complaint -driven" response system, which was instituted several years ago in
lieu of a proactive code enforcement approach. The Code Administration Division proposes
adding two additional code enforcement officers to the existing three starting in April 2014. This
additional staff will allow the City to be both more proactive and better able to respond to code
violations, in particular sign violations, to make the City more attractive.
Implement Integrated Stormwater Plan $600,000
The City stormwater program has completed a Stormwater Collection System Master Plan that
identified $672 million in capital improvement needs over the next 20 years for improving this
Introduction • Section I —11
sector of the built environment. Improved stormwater conveyance and retention is necessary to
maintain NPDES permit compliance and to mitigate flood hazards.
The Stormwater Capital Budget has $600,000 available in 2014 to start implementing the master plan.
Integrating stormwater projects into other City initiatives creates the possibility of significant cost
savings. For example, incorporating "low impact development" features into downtown planning,
North 1st Street, or the Mill Site redevelopment could add value to these projects with improved
drainage that incorporates improving the appearance and function of our built environment.
Installation of Biosolids Dryer $4,700,000 - 2014 / Total - $7,900,000
The Wastewater Division will install a $7.9 million biosolids (sludge) dryer to produce a Class A,
exceptional quality biosolids product that can be sold as a soil amendment. The dryer will improve
the built environment by increasing Wastewater Treatment Facility reliability by, utilizing bio -gas
produced by the new industrial wastewater treatment system and reducing $200,000 annually in
hauling and permitting expenses associated with Class B biosolids. The project also defers the
necessity for the installation of an $8 million to $10 million dollar Digester project. Funding for this
project will come from two Washington State Department of Ecology loans at 2.5% annual interest.
Up to $4.7 million will be spent in 2014. The second loan of $3.2 million will be used in 2015.
Complete Wastewater Collections Master Plan $100,000
The City began a systematic evaluation of both wastewater pipeline capacity analysis and condition
assessment in 2010 to determine short term and long term facility priorities for the wastewater
collection system. Akel Engineering is nearing completion of the capacity analysis of the system to
identify new lines that are necessary to provide service due to the continued growth of the community.
Existing trunk lines within the system have been identified as undersized. The City's crew is inspecting
sewer lines where its equipment is capable of collecting data. In addition, the City has contracted with
RedZone Robotics to provide closed caption television, sonar, and laser data that will provide a
condition assessment of the City's larger trunk lines. The condition assessment has identified pipelines
to be repaired or replaced. The compilation of capacity and condition data will provide the information
necessary for a Wastewater Collections System Master Plan. The Master Plan will allow the City's
wastewater infrastructure to be maintained and expanded to ensure reliable wastewater capacity and
service and accommodate future economic and residential growth.
Pedestrian and Bicycle Connectivity Plan $40,000
Both the 2012 and 2013 Citizen Surveys highlighted connectivity, or the ability to get around the
City by foot or bicycle, as an area of concern. In response to this concern, the Engineering Division
will begin the process of creating a comprehensive connectivity network by identifying existing
sidewalks and bicycle lanes and starting the design of a connectivity master plan. This plan will
work in conjunction with the Parks & Recreation initiative to improve path and trail infrastructure
and the Safe Routes to School program.
Implement a Pilot Recycling Program $40,000
Based on the community's strong desire to have a comprehensive, low-cost recycling program, the
Refuse and Recycling Division proposes to conduct a 6 -month, small scale (500 to 600 households)
Pilot Curbside Recycling Program to test assumptions and validate cost estimate of a full-scale,
citywide recycling program. If the pilot program proves effective and successful, plans to
implement a citywide program can be developed and implemented.
12 - Section I • Introduction
City Hall Improvements $200,000
Yakima City Hall was built in 1949 and has had few upgrades made to it over the past six decades.
It is proposed that in 2014 several customer -focused interior improvements be made to the first
floor of City Hall in order to update the appearance, lighting, and ADA accessibility to the west
lobby entry and customer service counters.
PARTNERSHIPS
The City of Yakima is committed to building cooperative and reciprocal partnerships with local,
regional, state, federal, non-profit, and private entities to enhance the vitality and quality of life for
its residents, businesses, and guests. To that end, the City proposes the following partnership
investments in 2014.
Targeted Partnership Investments
Capitol Theatre Improvements $372,000
Historically, the City has given more toward the annual operating needs of the Capitol Theatre to
manage and operate the facility than to the capital repairs and improvements necessary to ensure
the theatre's long term viability. Currently, more than $1.8 million in deferred capital needs related
to the theatre exist. Those needs include ADA and safety upgrades, repairing and upgrading the
stage lighting system (includes safety issues), replacing the orchestra shell, replacing theatrical
masking/backing, upgrading the asbestos fire curtain, main curtain and valance, improving the
counterweight rigging system, carpet, lobby elevator, dome lighting, front entry door, and
Robertson Room ceiling tile. Funding for the entire list of capital projects is not currently available.
The 2014 Capitol Theatre funding request does include $140,000 for ADA and priority safety
upgrades as identified in a recent Life Safety Evaluation report on the facility, as well as operations
support of $232,000.
Convention Center Management Fee Increase $708,200
The Yakima Valley Visitors & Convention Bureau manages and operates the Yakima Convention
Center. Over the years, operation and management costs have continued to increase. Staff is
requesting that the management and operation fee be increased by $13,900 in 2014 to assist in
marketing efforts of Yakima in order to stimulate economic growth through convention business
and tourism.
YPAL Facility Improvements $50,000
Staff proposes $50,000 in upgrades to the YPAL Center located in Northeast Yakima, as the first
installment of a $500,000 commitment to upgrade the Center at Miller Park. YPAL partners with
local agencies and hosts the Youth and Family Development Center as part of the Gang Free
Initiative. In addition to the City's contribution of $50,000, staff is working with a local business on
a proposal to provide an additional $250,000 over five years for improvements at YPAL so it can
continue as the hub of Youth and Family Development services in Yakima. Some of the possible
improvements in 2014 could include new windows, paint inside and out, classroom renovation,
restroom upgrades, and new flooring.
New Vision $33,000
New Vision has successfully linked private and public sector entities to promote economic growth
throughout the Yakima Valley for the past 27 years. New Vision is focused on assisting local
businesses to thrive, attracting new businesses, and developing the local workforce to generate
Introduction • Section I -13
economic growth and prosperity. The City proposes to invest $33,000 in 2014 to foster the
continued success of the New Vision public-private partnership.
Southeast Community Center $45,000
The Southeast Community Center is another City -owned facility in need of upgrades. While the
City pays a fee for management and operations of the facility, it has contributed minimally toward
facility improvements. The existing restrooms are 40 years old, in disrepair, and are beginning to
fail. Staff proposes that the City provide the supplies and materials needed for the remodel along
with major plumbing and electrical contractor costs, while the Opportunities Industrialization
Center, the facility's contracted operator, has agreed to contribute the construction labor portion of
the updated services. The total renovation is estimated at $100,000 if contracted out. The cost for
supplies and materials is estimated at $45,000, or less than half of the total cost.
Visitors Information Center Additional $20,000 — 2014: Total Budget $60,000
The City and various partners built the official Visitor Information Center (VIC) located off of I-82
near Yakima Avenue in 2003. The Yakima Valley Visitors & Convention Bureau (YVVCB) operates
and maintains the facility. Currently the VIC is partially funded through the Tourist Promotion
Fund ($40,000). The balance of support comes from the private sector. City support has remained
at $40,000 for the past 10 years, but expenses have grown. As the structure is now 10 years old,
costs for personnel, maintenance, utilities, and other operating expenses have risen. Private sector
support has been strong, but can't alone keep up with rising expenses. Staff proposes increasing
the City's annual contribution from $40,000 to $60,000 in 2014.
The VIC stimulates positive economic growth. It serves more than 14,490 people each year plus
thousands of others through phone calls, emails, mailings, and relocation requests. Surveys of visitors
in 2013 show that 20% of those served at the VIC extended their stays, with the majority staying at least
one extra night. Using this data as a baseline, it is estimated that these extended stays resulted in a
minimum of $275,088 in new visitor spending in 2012 alone, and similar figures are expected for 2014.
PUBLIC TRUST/ACCOUNTABILITY
Capital Improvements $50,100,000
In response to the public's dissatisfaction with the City's infrastructure, $50.1 million will be
invested in 2014 to address a host of community needs. The top 10 projects are listed below.
2014 TOP 10 CAPITAL PROJECTS
Desctription
Airport Taxiway Improvments
Railroad Grade Separation
WW Treatment Plant - Biosolids Impr. Project
Yakima Rev. Development Area (LIFT)
Water Treatment Plant Lagoons
WW Collection System - Beech St.
Street Improvement Project
Alternative Outfall/WW Treatment Plant
Naches River Water Treatment Plant Intake
Replace 3 Transit Buses
14 - Section I • Introduction
2014
Budget
$11,162,885
4,898,000
4,700,000
2,473,235
2,100,000
2,000,000
2,000,000
1,800,000
1,500,000
1,300,000
$33,934,120
Funding Source
Grant/Match
State & Federal Grants
State Loans/Capital Rates
State/Match/County SIED Prog.
State/Match
Capital Rates/Reserves
General Government Taxes
Capital Rates/Reserves
Capital Rates/Reserves
Transit Sales Tax
Quality Customer Service Training $50,000
Based on the information gathered from citizen and employee surveys, in 2014 the City will
implement an Excellence in Customer Service Academy. The academy will be similar to a college
model, with classes and coursework activities. We will have 15-20 exceptional employees that will
learn to be the trainers for the academy. We will develop a mission, quality improvements, and
deploy standardized practices for the new process. At the end of the academy, there will be a
graduation ceremony to celebrate our successes. The primary goal of the academy is to align the
service level on the employee survey with the citizen survey.
Citizen Survey $35,000
The Yakima City Council authorized a Citizen Survey in 2012 and 2013 to find out what community
members thought about City services and to help identify areas that needed improvement. Results
of the surveys helped the Council establish a set of priorities that led to the redesign of City
programs and services to address issues ranging from street repair and employment opportunities
to crime prevention and Yakima's overall image. The Council committed to conduct follow up
surveys on an annual basis for the foreseeable future in order to track progress and ensure that the
City continues to focus on priorities that community members feel are key to Yakima's success. To
this end, the 2014 Citizen Survey will cost approximately $35,000, the same as in 2012 and 2013.
Employee Survey $13,000
The City of Yakima has made a commitment to seek input from employees on the health and
climate of the organization and then use that information to develop strategies for organizational
improvements. In 2013, the City conducted its first annual employee survey in order to obtain a
baseline understanding of the employees' perspectives and concerns as well as provide input on
strengths and opportunities of the organization. This assessment is one tool to help City leadership
leverage strengths and address opportunities to continue its work to create a higher performing
organization. Staff suggests that the employee survey be conducted in 2014 to see what
improvements have been made and what changes still need to be made.
FUND BALANCE OPERATING RESERVE
The General Government projected year end Operating Reserve is at $11,068,324 or 16.7% of annual
expenditures, which is at the City Council's desired 16.7% or 60 days of working capital finance
management standard. This level of operating reserves is sufficient to meet unforeseen, one-time
expenditures of an emergent nature, such as a national disaster, catastrophic occurrence, or
excessive liability judgment.
CONCLUSION
The 2014 proposed budget addresses the City's essential priorities and capital needs and will allow
the City to achieve critical community and Strategic Plan goals. It also puts in place a plan that
supports the City's efforts to ensure 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 initiatives to meet the Council's and the community'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.
Introduction • Section I -15
Finally, I would like to thank the City Council for its leadership in adopting the Strategic Plan, Five
Year Financial Plan, and 2013 Citizen Survey which have served as the foundation for the proposed
2014 budget, and for its commitment to move the City forward toward a brighter and more
sustainable future.
Sincerely,
Tony O'Rourke
City Manager
16 — Section I • Introduction
INTRODUCTION: BUDGET SUMMARY
This Budget Summary Section provides a high-level overview of the 2013 year-end forecast and the
preliminary 2014 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 2014.
2013 YEAR END ESTIMATE VS. 2014 BUDGET OVERVIEW
The chart below shows the 2014 budget, including beginning and ending fund balances in
summary format.
2014 BUDGET SUMMARY
Est. 2014 Estimated
Beginning 2014 2014 2014 Ending Use of
Fund Balance Revenue Expenditure Fund Balance Reserves
General $9,245,322 $57,181,843 $56,936,456 $9,490,709 ($245,387)
Parks and Recreation 678,057 4,357,215 4,412,448 622,824 55,233
Street & Traffic Operations 1,159,848 4,596,360 4,786,409 969,799 190,049
General Government Subtotal 11,083,227 66,135,418 66,135,313 11,083,332 (105)
Utilities/Other Operating 16,381,886 64,449,505 67,637,845 13,193,546 3,188,340
Capital Improvement 22,266,439 41,428,617 50,112,615 13,582,441 8,683,998
Risk Management Reserves 1,125,161 3,360,500 3,371,576 1,114,085 11,076
Employee Benefit Reserves 6,288,585 11,802,538 12,843,824 5,247,299 1,041,286
G.O. Bond Debt Service 553,278 3,186,671 3,346,079 393,869 159,408
Utility Revenue Bond Debt Service 1,758,713 2,146,286 2,144,786 1,760,213 (1,500)
Trust and Agency Funds 1,008,424 625,171 622,671 1,010,924 (2,500)
Total $60,465,713 $193,134,706 $206,214,709 $47,385,710 $13,080,003
The estimated resources for all funds, including beginning balances, are $253.6 million. This
represents a decrease of $10.8 million or 9.6% less than the 2013 Year -End Estimate of $264.4
million.
The expenditure budget for FY 2014 for all funds is $206.2 million. This represents an increase of
$2.2 million or 1.1% more than the 2013 Year -End Estimate.
Some features of the Fiscal Year 2014 budget that should be noted are:
Revenues
➢ The property tax levy for FY 2014 is estimated to be $3.113 per $1,000 of assessed value, an
increase of $0.0235 or 0.76% over the current rate.
➢ The voter -approved debt service levy rate is cut by more than half, because 2014 is the last
year of voted debt service for Fire capital improvements. It is estimated to decrease from
$0.0541 to $0.0193.
➢ The combined general operating and debt service levy rate is $3.1323 per $1,000 of assessed
value, a decrease of ($0.0113) or (0.36%).
Introduction • Section I —17
➢ A 5.1% Wastewater rate increase approved in December 2011 will add approximately $3.81
bimonthly for an average single family residence. This is the 3rd year of a 3 year rate
increase.
➢ A 5.5 % Irrigation operating rate increase approved in December 2010 will add
approximately $1.28 bimonthly for an average single family residence. This is the 4th year of
a 4 year rate increase.
➢ Water, Stormwater and Refuse utilities are not proposing rate adjustments in 2014. All of
these operations have rate studies in progress.
Personnel
➢ 748.42 total proposed full-time (FTE) positions in all funds for Fiscal Year 2014.
➢ A net increase of 14.25 FTE's from 2013—including 7 with Airport Operations.
➢ Refer to the General Staffing section for more information.
Capital Improvements
➢ The City will invest $50.1 million in FY 2014 to address its capital needs.
FINANCIAL CONDITION
Despite several years of downward pressure on revenues mainly due to tax relief legislation and
the economic recession, Yakima continues to maintain fiscal stability.
Bond Ratings
The City is proud of affirming a "AA-" on its water and wastewater utilities, and an "A+" rating on
its general obligation bonds from Standard and Poors in 2012. Good ratings mean the City's
general obligation bonds are considered to be of high investment quality, which translates into
lower interest rates and corresponding lower interest payments.
Revenues
Ad valorem taxes - To ensure its long-term financial success, the City is proposing to set its
operating property tax levy at rate of $3.113 per $1,000 of assessed value in Fiscal Year 2014. The
State law allows the City to impose 1% above the prior year levy, plus levies for new construction
and annexations. The City estimates to collect $285,000 or 1.7% more in the FY 2014 levy than it did
in FY 2013.
The City's sales, franchise, and other demand -driven revenues fluctuate with the economy. As the
City has learned over the past few years, a slumping economy leads to lower retail sales, which in
turn, translates to lower sales tax revenue. Less traveling leads to lower fuel tax revenue. Declining
economic growth leads to less construction, less renovation, fewer home improvements, and thus
declining revenue. Positive economic growth, on the other hand, promises to reverse this trend.
Most economists are expecting the economy to grow at a modest rate during the coming year.
However, rather than growth returning to normal levels quickly, the economy will move slowly but
steadily upward. The City has, therefore, adopted a moderate growth philosophy for FY 2014
revenue estimates.
18 — Section I • Introduction
MAJOR POLICY CONSIDERATIONS
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 2.0% to 3.0% annually.
5 -Year Plan Financial Plan
In the summer of 2012, 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 2014 and FY 2017.
On August 21st, 2012, 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 being 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.
Based on the results of the preliminary Five -Year Financial Forecast, the City developed a longer-
term strategy for dealing with both the current and future budget reality, which included
maintaining a 2% vacancy rate that was to be carried forward into future years.
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.
Despite economic hurdles, the City must continue to invest in its core strategic priorities. To that
end, several initiatives have been proposed in 2013 and 2014 to address and advance the City
Council's five strategic priorities in the 5 -Year.
Introduction • Section I —19
2014 EXPENDITURE BUDGET BY FUND
($206.2 MILLION)
Contingency/
Risk
Management
Capital $12.8
Improvement 6.2%
$3.4
1.6%
General Obligation
Bond Debt Svc
$50.1
24.3%
Trust and
Agency Funds
$0.6
0.3
Utility Revenue
Bond Debt Svc
$2.1
1.0
Employee
Benefit
Reserves
$3.3
1.6%
General
$56.9
27.6%
Parks &Rec
$4.4
2.1%
Street & Traffic
$4.8
2.3%
Utilities/Other
Operating
$67.6
32.8%
2014 RESOURCES BUDGET BY FUND
($253.6 MILLION)
General Contingency/ Employee
Obligation Bond Risk Benefit
Debt Svc Capital Management Reserves
$3.9 Improvement $4.5 $1.6
1.5% $18.1 1.8% 0.6%
7.1% General
Trust and $66.4
Agency Funds 26.2
$3.7
1.5%
Utility Revenue
Bond Debt Svc
$63.7
25.1%
Resources =
Revenues plus
Beginning Fund Balance
20 - Section I • Introduction
Parks & Rec
$5.0
2.0
Street & Traffic
$5.8
2.3%
Utilities/Other
Operating
$80.8
31.9%
The proposed 2014 total city-wide expenditure budget of $206.2 million is balanced within existing
resources and reflects an increase of $2.2 million from the 2013 year-end estimate of $204.0 million.
The 2014 General Government budget of $66.1 million is approximately $3.2 million more than the
2013 year-end estimate of $62.9 million. The General Government budget consists of three separate
Funds: the General Fund, the Parks Fund and the Streets and Traffic Fund. Over 67% of these tax
supported budgets are devoted to public safety services in the 2014 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.
MID -YEAR CHANGES
As the 2014 budget was developed, changes that needed to happen before the 2014 budget year
were found and expeditiously put into place during 2013. The following are the elements that were
implemented/authorized in 2013, and incorporated into the 2014 budget.
MID -YEAR CHANGES
Description
General Fund
Delete 1.0 HR Specialist Position
Delete 0.75 Deputy HR Manager Position
Add 0.6 Human Resources Asst
Add 1.0 Telephone Technician
Add 1.0 Graffiti Abatement
Add 1.0 Fleet Technician
Add 1.0 Police Lieutenant
74 Police Vehicles Program
Fire Airpac Debt Service
Implement $2M Street Impr. Funding
Total General Fund
Add 0.2 Wastewater Laboratory
Delete 0.25 Deputy FIR Manager Position
Taxiway Alpha/Airfield Improvements
Total City -Wide
2014 BUDGET ADJUSTMENTS
Inc/Dec Notes Priority
($75,800)
(46,200)
45,000
68,500
50,000
61,000
124,300
798,000
88,000
2,000,000
3,112,800
11,000
(18,000)
11,100,000
$14,205,800
Replaced with PT HR Assistant
Partially funded in other funds
Replaced HR Specialist
Public Safety Interoperability
Temp (42%) to FT Permanent
Police Car Program
SRO Contract - Rev $52k
Authorized mid -year 2013
Authorized mid -year 2013
Voter App. Charter Amend. 8/13
Perm Part Time 0.5 to 0.7
Partially funded in GF
FAA Grant/Local Match
PT
PT
PT
PS
BE
PS
PS
PS
PS
BE
BE
PT
BE
General Government Program Changes
The following chart is a summary of programmatic changes included in the 2014 budget, along
with the strategic priority being addressed by each initiative. This list is sorted by departmental
responsibility in contrast to the prior City Manager transmittal that is sorted by Strategic Priority
Introduction • Section I - 21
GENERAL GOVERNMENT STRATEGIC INITIATIVES
Description
Increase Notes Priority
City Manager
Add 1.0 Gang Free Initiative Manager 88,600 Transition f/Planning - Svc Mgmt PS
Comm & Tech/FT Reorganization 142,200 Reinstate IT Manager PS
Enhance/Expand Downtown Events 10,000 Total Budget $110,000 ED
Implement Airport Marketing Plan 100,000 ED
Quality Customer Service Academy 50,000 PT
390,800
Community Development
Add 2.0 Code Compliance Officers 100,000 BE
Police
Parking Enforcement Officer 57,000 Supported by $40K Ticket Revenue PS
Expand Downtown Bicycle/Foot Patrol 68,800 Expanded to Spring/Fall PS
Expand Training Funding 75,000 Succession Planning PS
Fire
Fire Staffing to Eliminate Brownouts
Expand Training Funding
200,800
321,000 General Fund Portion
75,000
396,000
PS
PS
Utilities & Engineering
Right of Way/Street Cut Program
Reinstate Supervising Traffic Engineer 94,100 BE
Street Cut Charge (150,000) Revenue BE
(55,900)
Public Works
Add 1.0 Parks Administrative Assistant 59,500 Reinstate - was shared w/Planner PA
Improvement to SE Community Center 45,000 Partnership with OIC PA
104,500
Total General Government $1,136,200
Strategic Priority Legend
Economic Development ED Public Trust and Accountability PT
Public Safety PS Partnerships PA
Built Environment BE
Other Fund Changes
The following is a summary of strategic initiatives in the other operating and utility funds.
22 — Section I • Introduction
OTHER FUND STRATEGIC INITIATIVES
Description
Inc/(Dec) Notes Priority
City Manager
City Hall Improvements $200,000 BE
Implement Downtown Retail/Master Plan 170,000 ED
Cascade Mill Project 2,400,000 Cont St Design/Landfill Cleanup ED
Visitor Center Funding 20,000 Increase from $40k to $60K PA
Convention Center Management Fee 13,900 PA
Capitol Theatre Repair/Improvements 240,000 PA
Reduce CTC Management Fees (100,000) PA
Airport 11,100,000 BE
Police
New Communications Center Construction
License Plate Reader
Fire
Brush Truck
Fire Staffing to Eliminate Brownouts
14,043,900
195,000 1st yr Debt Svc ($3.5M Impr.)
135,000 Capital Fund
330,000
130,000 Capital Fund
132,900 EMS Fund
262,900
PS
PS
PS
PS
Utilities & Engineering
Pedestrian/Bicycle Connectivity 40,000 BE
Start Implementing Integrated SW Plan 600,000 BE
Rate Studies for SW/WW & Ind WW 110,000 BE
Wastewater Collections Master Plan 100,000 BE
Biosolids Dryer 4,700,000 Total Project - $7.9 million BE
Public Works
Add 1.0 Department Assistant II
Add 1.15 Transit DA II
Add 0.3 Transit Cleaner
Purchase 3 Heavy Duty Buses
Dial -A -Ride Replacement Plan
Fleet Additions/Replacement
Diesel Particulate Filter Cleaning Equip
5,550,000
46,100
67,800
10,000
1,290,000
392,000
1,621,000
85,000
3,511,900
Total City - Other Funds $23,698,700
Reinstatement of Position
Strategic Priority Legend
Economic Development ED Public Trust and Accountability PT
Public Safety PS Partnerships PA
Built Environment BE
Introduction • Section I — 23
GENERAL STAFFING - ADJUSTMENTS SUMMARY & COMPARISONS
The following chart summarizes the general government (i.e. tax -supported) and non -general
government position additions, deletions and transfers implemented mid -year 2013 as well as those
included in the 2014 budget. Each of the Non -General Government proposals has an identified
revenue source or other expenditure reduction to support the additional cost.
Fund/Department
2014 BUDGETED POSITION ADJUSTMENTS
Description Chg
GG
Base &
Benefits
Other
Base &
Benefits
Remarks
Mid -Year 2013 Changes
Human Resources
Police
Code Admin
Information Tech
Yakima Air Term
Wastewater
2014 Budget Changes
Information Tech
Gang Free Initiative
Municipal Court
Police
Fire
Streets
Parks & Recreation
Community Dev
Transit
Public Works
Engineering
Deputy HR Manager
HR Specialist
Human Resources Asst
Fleet Technician
Police Lieutenant
Housing Rehab Asst
Del
Del
Add
Add
Add
Add
Telephone Technician Add
Add
Laboratory Technician Add
Total Mid -Year Changes
IT Manager
Electronics Supervisor
Electronics Tech I
Electronics Tech II
Gang Free Init Mgr
Municipal Court Clerk
Parking Officer
Firefighter
Fire Lieutenant
Supervising Traf Eng
Traffic Tech II
Admin Associate
Codes Enf Officer
Department Asst II
Transit Cleaner
Department Asst II
Multiple Positions
Tota12014 Changes
Add
Trans
Trans
Trans
Add
Del
Add
Trans
Add
Add
Add
Trans
Add
Add
Add
Add
Add
Trans
(1.00) ($46,200)
(1.00) ($75,800)
0.60 $15,000
1.00 61,000
1.00 124,300
1.00 50,000
1.00 68,500
7.00 -
0.20 -
($18,000) Mid -Year Change
Mid -Year Change
$27,800 Mid -Year Change
- Police Car Program
- SRO Contract - Rev $52k
- Grafitti Abate/Perm PT - 5 mo.
Public Safety Interoperability
543,900 Assumption of Airport Ops
11,000 Reinstatement of position
9.80 196,800
1.00 100,200
0.00 111,500
0.00 82,500
0.00 99,000
293,000
1.00 88,600
(1.00) (67,900)
1.00 56,800
0.00 178,500
2.00 163,700
1.00
1.00 94,100
0.00
1.00 59,500
2.00 100,000
1.15
0.30
1.00
0.00 173,000
564,700
43,000
(111,500)
(82,500)
(99,000)
(293,000)
(178,500)
107,900
67,800
10,000
46,100
(173,000)
11.45 $1,239,500 ($369,700)
Reinstate IT Position
Public Safety to Info Tech
Public Safety to Info Tech
Public Safety to Info Tech
Electronics Total
New 2014 Position/Dept
Cost Containment
Reinstatement - $40K Rev
Grant Fund to Police
Reinstatement of Positions
Increase EMS Funding
Right-of-Way/Street Cut Init
Streets (GG) to Eng (GG)
Reinstatement of position
Reinstatement
2 Permanent PT Positions
Increase Perm PT Hours
Reinstatement of position
Reallocate Engineering Staff
Total General Government Changes $1,436,300 $195,000 Total Other Gov't Changes
➢ A net of 2.6 FTE's were added to General Government mid -year, and 8.0 in the 2014 Budget
for a total of 9.8 FTE's.
➢ A net of 7.2 FTE's were added to other government funds mid -year, and 3.45 in the 2014
Budget for a total of 11.45 FTE's.
24 - Section I • Introduction
In the 2014 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 2014 budget.
➢ Net addition of 21.25 FTE's and approximately $1.6 million dollars between the 2013
adopted and the 2014 proposed budgets. (This includes the 7.0 Airport personnel)
➢ Since the recession started in late 2008, General Government is operating with a net total
of 18 fewer FTE's in 2014 (from 478 in 2008 to 460 in 2014); a reduction of 3.8%.
➢ The per capita number of General Government employees has decreased over the past
decade (per every 1,000 population), from 5.8 FTE's in 2004 down to 5.1 FTE's in 2013.
Comparison with other Cities - Payroll
The data utilized in the following comparison was compiled from the State Auditor's Local
Government Comparative Statistics for 2012, and includes comparisons of comparable Washington
State cities with populations between 45,000 and 125,000.
$1,000
$800
$600
$400 -
$200 -
$0
PAYROLL COSTS
Yakima's per capitaexpenditures onpayrollis $503 which
is $44 less than the average dty per capita of $547
$316 $324
$362
$387
1
$398
$490
$503
$580
1
$615
$924
SS -19
Marysville Pasco Kent Kennewick Auburn Kirkland Yakima Renton Richland Bellevue Everett Redmond
PRELIMINARY BUDGET
The 2014 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 — 25
2014 GENERAL GOVERNMENT PRELIMINARY BUDGET
(By Department)
2014 Dollars in Millions
Forecast
Organizational Unit Budget
Police $26,046,280
Fire 10,167,258
Streets & Traffic Oper. 4,786,409
Parks 4,412,448
Transfers 4,382,275
Information Systems 2,912,612
Code Administration 1,508,679
Financial Services 1,488,836 ❑
Municipal Court 1,344,118 ❑
Police Pension 1,343,325
Utility Services 1,316,181 En
Legal 1,314,323 ❑
Engineering 1,109,632 ❑
Indigent Defense 600,500
Records 563,921 ED
Purchasing 549,369 0
Human Resources 513,151
Economic Development 486,733
Planning 458,481 0
City Hall Maintenance 407,885 QI
City Manager 372,684 El
Gang Free Initiative 333,105
City Council 282,075 01
Intergovernmental 244,031
State Examiner 110,000
Hearings Examiner 31,000
2% Vacancy Rate ($950,000) ❑
Total $66,135,312
-1 1 3 5 7 9 11 13 15 17 19 21 23 25
r
■ Personnel
: Non -Personnel
% of
Total
Budget
39.4%
15.4%
7.2%
6.7%
6.6%
4.4%
2.3%
2.3%
2.0%
2.0%
2.0%
2.0%
1.7%
0.9%
0.9%
0.8%
0.8%
0.7%
0.7%
0.6%
0.6%
0.4%
0.4%
0.2%
0.0%
0.0%
(1.4%)
100.0%
The Police Department consumes 39.4% of the $66.1 million General Government budget, while the
Fire Department consumes another 15.4%. No other single Department utilizes more than 7.2% of
the total General Government budget.
The Streets & Traffic Department budget (7.2%) and the Parks and Recreation Department budget
(6.7%) 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.
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
26 - Section I • Introduction
advantage of one-time, unanticipated opportunities; provide grant matching funds; cover revenue
shortfalls; and accommodate unforeseen expenditures and other contingencies.
2014 GENERAL GOVERNMENT
PROJECTED REVENUES, EXPENDITURES AND CASH BALANCES
2014 2014 2014 2014
2014 2014 Exp Estimated Estimated End Bal
Projected Proposed as % of Beginning Ending as % of
Revenue Expenditures Diff Rev Balance Balance Exp
General Fund $57,181,843 $56,936,455 $245,388 -0.4% $9,245,320 $9,490,708 16.7%
Parks & Recreation 4,357,215 4,412,448 (55,233) 1.3% 678,057 $622,824 14.1%
Street & Traffic Fund 4,596,360 4,786,409 (190,049) 4.1% 1,159,849 $969,800 20.3%
Total General Government $66,135,418 $66,135,312 $106 0.0% $11,083,226 $11,083,332 16.8%
The 2014 General Government preliminary budget is balanced with no use of reserves and the
ending reserve balance is projected to be $11.1 million or 16.8% of the budgeted expenditures,
which is right at the recommended "best practice" of 16.7%.
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
(December, 2012) 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 a history of the City's General Government fiscal condition.
GENERAL GOVERNMENT FUNDS
RESERVES USAGE AND BALANCE COMPARISONS
(1) (2) (3) (4) (5)
2013 2013 2014
2012 Amended Year -End Preliminary Variance
Actual Budget Estimate Budget (4-2)
Beg. Reserve Balance $9,948,220 $9,944,260 $10,908,094 $11,083,227
Revenue 61,580,246 62,668,304 63,071,318 66,135,418
Total Resources 71,528,466 72,612,564 73,979,412 77,218,645 4,606,080
Expenditure Budget $60,772,182 $63,677,219 $62,896,186 $66,135,313 2,458,094
End. Reserve Balance
% of Annual Expenditures
Inc/(Dec) in Reserves f/ Prior Year
% of Expenditure Budget
10,756,284 _ 8,935,345 11,083,227 _ 11,083,332
17.7% 14.0% 17.6% 16.8%
$808,064 (1,008,915) $175,132 i $105
1.3% _ (1.6%) 0.3% _ 0.0%
Introduction • Section I — 27
Revenues
➢ 2014 projected revenues reflect an increase from the 2013 year-end estimate of 4.6%.
Expenditures
➢ The 2013 year-end expenditures are projected to be $0.8 million less than the Amended budget.
➢ The 2014 proposed expenditure budget is $3.2 million more than the 2013 year-end estimate
and $2.5 million more than the 2013 authorized expenditure level.
Reserves
➢ A comparison of the 2012 beginning and ending reserve balances reflects a gain of $0.8
million for reserves during that year (from approximately $9.9 to $10.8 million). This good
result was primarily due to the turnaround in the economy and related increase in sales tax.
➢ 2013 year-end projections indicate a minimal gain of reserves during 2013.
➢ The 2014 budgeted year-end reserve level is approx. 16.8%; this is within the reserve
guidelines, as noted previously, and expenditures virtually equal revenues.
2014 GENERAL GOVERNMENT BUDGET - HIGHLIGHTS
For five 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, 2013 and
2014 revenue projections for the City based on the economic condition of our region. General
Government revenues had been flat for about 4 years when the recession started (hovering between
$57.4 and $57.6 million from 2008 through 2011), but started to turn around in 2012. Much of the
revenue increase from 2011 to 2012 actual is the result of City Council's increase of the Water,
Wastewater, Refuse and Stormwater utility tax by 6% - this accounts for about $2 million or half of the
$4.0 million increase. This new revenue was earmarked specifically for Public Safety, and is supporting
12 Police Officers, a Firefighter, and other public safety support. When the new revenue source is
removed, 2012 did experience revenue growth of about $2.0 million or 3.2%.
Starting in June, 2012, sales tax started to consistently grow each month. By the end of 2012, the year -
over -year growth was $904,000 or 7.2% from 2011. This was spurred by a good crop year and
construction led by the Yakima School district's spending on the high schools. Note: The 2012 total of
$13.5 million was still below the 2008 actuals.
2013 is continuing the growth trend, and through the 9 months ended September 30, the year-to-date
sales tax is 7.1% ahead of 2012. We are estimating 2013 to be about $14.1 million, which is finally ahead
of 2008 levels.
➢ From 2008 through 2012, a total of 41 positions were eliminated in order to balance the
budget within available resources.
➢ The 2013 budget added a net of 1.7 positions, while 2.6 positions were added mid -year 2013
in General Government.
➢ The 2014 budget returns a net of 8.0 positions to the General Government budget, to address
citizen concerns and the City Council's strategic priorities.
➢ Even with the reinstatement, General Government staffing levels are still below 2008 actual
by 28.7 FTE's.
28 - Section I • Introduction
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 2014 Preliminary Budget.
➢ Sales Tax - The General Government budget includes revenue projections that reflect a 5.1%
increase in sales tax revenues from 2013 to 2014. This includes a base growth rate of about
3.0% plus an estimate for a major business moving in to the City limits from a neighboring
jurisdiction. Through the 9 months ended September 30, the year to date sales tax is 7.1%
over the prior year.
➢ Property Tax - The 2014 budget is based on a 1.0% increase in the property tax levy or about
$169,000, as currently allowed by state law, plus a 0.7% increase or $116,000 for new
construction for a total increase of $285,000.
Budget Reductions/Personnel Changes
As revenues are on the road to recovery, Council is evaluating service levels and trying to better
align service levels with citizen requests as measured by a citizen's survey. Strategic initiative have
been approved and included in the budget, and the cost of doing business continues to grow,
budget reductions were still necessary in order to balance the 2013 and 2014 budgets within
available resources and maintain a minimum reserve level.
Comparison with other Cities - Expenditures and Resources
The data utilized in the following comparisons was compiled from the State Auditor's Local
Government Comparative Statistics for 2012, and includes comparisons of comparable Washington
State cities with populations between 45,000 and 125,000.
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$o
TOTAL EXPENDITURES
Yaldma's per capita total expenditures are $1,570, whichis $564
less than the average city per capita revenue of $2,134
$1,752 $1,851
$1,235
$1,356
$1,430
$1,570
$2,070
1
$2,139
$2, 763
$2,989
$3,338
Pasco Kennewick Marysville Yakima Kent Kirkland Auburn Renton Everett Bellevue Redmond Richland
Introduction • Section I — 29
$3,500 -
$3,000 -
$2,500 -
$2,000 -
$1,500 -
$1,000 -
$500
$0 i(
TOTAL RESOURCES
Yakima's percapitatotalrevenueis $1,548, whichis $694
less than the average city per capita of $2,242
$1,270 $1,306
$1,389
$1,548
$1,751
1
$1,930 $2,002
$2,314 j
$2,596
$3,347 $3,356
$4,099
Pasco KennewickMarysville Yakima Kent Kirkland Auburn Renton Everett Redmond Richland Bellevue
These comparisons demonstrate that the City of Yakima has limited revenue/tax base compared
with most cities of its size in the state, and yet provides similar or enhanced services to its citizens.
(For example, of the 12 cities included in the comparison, only Everett has a transit system; there
are no other city -owned irrigation systems; and a few of the cities 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.
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 below, it is split into an
operating component and capital component for charting operating vs. capital budgets.
30 - Section I • Introduction
2014 OPERATING AND RESERVE FUNDS
Division
2014
Projected
Reserves, Risk Mgmt, Emp Benefits $16,227,399
Cap Theatre, Cemetery, Trust Rsys $23,207,508
Wastewater $20,213,432
$21,864,739
Water/Irrigation $11,086,533
$13,089,319
Transit $8,240,033
$9,128,689
Refuse $5,670,633
$5,946,765
Equipment Rental $3,592,746
$3,945,625
Stormwater $2,325,519
$3,614,369
Airport $1,037,370
$1,081,127
Special Purpose, Housing, Emer Svs $13,953,196
Public Wks Admin, Cable TV, Misc $17,644,229
Dollar In Millions
0 2 4 6 8 10 12 14 16 18 20 22 24
IIt ��Jl�llllJlllt �1J1�1��11t ��lllll�Jl�l�lJlll��llllllflfl/I/III�jIJlllll I/lllllllllfl'Jl/I/lll�fl
1p1;1tl11111,111111p1
Ilt��lllllllllllt�lJlpl��11t ��lllll�Illl�lllll��llllllllfl/I/lllii�
f lt��lllllllJlllt�lJJpl��11t ��llJJl�II>l�lJlll�(
111111111111111111111111111111111111111111111
Water Rates, Irrigation Fees, Reserves
Transit Sales Tax, Oper Grants, Fare Box
Refuse Rates
Charges
Stormwater Fees
Airport Fees
Expenditures
D Resources
It lllllJllll Jlpl, ilt l llllJ;'1 `1111„1111„„„„„„1„1111/l„„„„„11111
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.
Division
2014 CAPITAL AND DEBT SERVICE FUNDS
Dollars in Millions
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28
2014
Projected
Wastewater $14,557,157
$20,880,079
Streets $14,158,567
$16,356,680
Airport $11,162,885
$11,198,517
Water/Irrigation $6,504,133
$8,960,542
Transit $2,079,054
$5,469,397
Equipment Rental $1,749,000
$3,525,799
Storm Water $790,000
$1,610,613
Sp Purp Cap, Misc G.O. Debt $6,731,738
$8,857,777
111fIfg 111t111111f11111I111.. J'111J1If11 rltlllfllll>>
Wit
11111 HHHHHfHlIl011f111ffi1(lllll1E111' f 1 %IIl4lIlIJG' Jl f 11111!
llrl�ll>tl�JlJllllr���ll>tl�ll(rIJIIJI�II�I�IlJ4f�llllllllllll
fJlllllll1111111If1Jlll
Iltll(�llllll
AI I
Reserves, Charges
Reserves, Charges, Loans
Reserves, Taxes, Grants
Reserves, Charges
Reserves, Charges
�Ipllplllllplllllll�pl>rlll
Total Expenditures
p Total Resources
Reserves, Grants, Taxes, Loans
Introduction • Section I — 31