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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 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII ITEM TITLE: SUBMITTED BY: SUMMARY EXPLANATION: 2014 Preliminary Budget Presentation Tony O'Rourke, City Manager Cindy Epperson, Director of Finance & Budget Resolution: Ordinance: Other (Specify): Contract: Contract Term: Start Date: End Date: Item Budgeted: Amount: Funding Source/Fiscal Impact: Strategic Priority: Insurance Required? No Mail to: Phone: APPROVED FOR SUBMITTAL: RECOMMENDATION: ATTACHMENTS: Description ❑ 2014 Budget Message City Manager Upload Date 10/17/2013 Type Cover Memo INTRODUCTION: TRANSMITTAL Ho 129 North Second a .reel City 1aIavitWWYI a"w�ag,W caa, It ag�fd 98901 Phone 0 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