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HomeMy WebLinkAbout11/19/2013 07 2014 Revenue and Expenditure Budget, First Public Hearing and Set Date for Second Public HearingBUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: 11/19/2013 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII ITEM TITLE: A. First Public Hearing on the proposed 2014 Revenue and Expenditure Budget for the City of Yakima SUBMITTED BY: SUMMARY EXPLANATION: B. Set date for a second Public Hearing on the proposed 2014 Revenue and Expenditure Budget on December 3, 2013, after which a determination will be made on the final 2014 Budget. Tony O'Rourke, City Manager Cindy Epperson, Director of Finance & Budget City management recently submitted the 2014 Preliminary Budget Summary and the related initiatives to City Council and the public. This budget represents staff's projections of revenues and proposed expenditures for the coming year. The Preliminary Budget was first presented ata Study Session on October 21, 2013. Since that presentation, the proposal for the Street improvement project that will be funded in accordance with the recent City Charter amendment has solidified to use the approved $2 million for annual debt service on 10 year General Obligation Bonds that should generate enough proceeds to pave about 92 lane miles. To properly include this in the budget, we added $16,500,000 of both revenue (General Obligation Bond proceeds), and expenditures in the capital fund. The $2 million that will be used to repay the bonds was moved out of the capital fund into a debt service fund. Other minor corrections were made, and we have updated the numbers and narratives to reflect all of the changes. The Budget Documents and the Council review meetings are all open and available to the public. The purpose of the Public Hearing is to accept input, comments and/or questions from citizens and other affected parties regarding the proposed 2014 Budget including all initiatives, proposed rate increases, and other related budget matters for 2014. The last step in the 2014 budget process will be for Council to conduct a final public hearing and adopt the budget prior to year end. This action is currently proposed for the December 3 meeting. Resolution: Ordinance: Other (Specify): Public Hearing 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: Public Trust and Accountability City Manager A. Conduct the Public Hearing and accept public testimony. No action on the budget is required at this meeting. B. Set date for a second Public Hearing on the proposed 2014 Revenue and Expenditure Budget on December 3, 2013, after which a determination will be made on the final 2014 Budget. ATTACHMENTS: Description Upload Date ❑ Proposed Budget Public Notice Ad 11/12/2013 ❑ 00 11/15/2013 ❑ 01 11/15/2013 ❑ 02 11/15/2013 ❑ 03 11/15/2013 ❑ 04 11/15/2013 ❑ 05 11/15/2013 ❑ 06 11/15/2013 ❑ 07 11/15/2013 Type Cover Memo Cover Memo Cover Memo Cover Memo Cover Memo Cover Memo Cover Memo Cover Memo Cover Memo CITY OF YAKIMA NOTICE OF PUBLIC HEARING ON THE 2014 BUDGET NOTICE IS HEREBY GIVEN that the City Council of the City of Yakima will hold a public hearing on Tuesday, November 19, 2013, at 7:00 p.m., or soon thereafter, in the City Council Chambers at Yakima City Hall, 129 North 2nd Street, for the purpose of fixing the budget for the City of Yakima for the fiscal year 2014. Any taxpayer may appear at said meeting and be heard for or against any part of the budget. The preliminary budget summary of the City of Yakima, Washington, for the fiscal year 2014, is now on file in the office of the City Clerk and in the office of the Director of Finance and Budget of the City of Yakima. A copy of said preliminary budget will be furnished to any taxpayer who will contact either office in Yakima City Hall, 129 North 2nd Street, Yakima, Washington, or you may access it at http://www.vakimawa.govIservices/finance/financial-reports/ DATED this 6th day of November, 2013. MICAH CAWLEY Mayor of the City of Yakima SONYA CLAAR TEE City Clerk CINDY EPPERSON Director of Finance and Budget 1111111111111 111111111111111111111111111111111111111111111111111111111111111111111 „„,sym luta, Washington mm11111111111 )ii,,,,iiipM111111111111111 f ,„(((((e 1111111111(1,1111111 10,1 111 1 II 1111111111111111111111111111111111111111111,1;:. ..,..„„ 11111111111111111111„„,., !Budget Summ II:1111111m: 1.1.1.1"1"1"1"1"1:11:11'1''.1111111111 • „„„„ 1 ••• """" ••••,•• „„„„„„„„„„„„„„„ 1111111111111111111111111111111111111111 11111111111111111111 111111111111 1111111111 111111'1 1111 11'1'1'1'111111111111 11 1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 14111.111111.111.11.11.11.11.11.11.11.11.11.11.11.11.11.11.141,11111,111,11,111,111,111,111,111,1111,11,1111,11,1111,11,1111,11,1111,11,1111,11,1111,11,111,11,1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„1„!..!..,1,,1111„1,,,,,,,, 1111111111111i , 1,11°11 4 'prelim! 1111vonoommuo111111111111111111111111111111111111111,1 „1,1,1 1111[1111111111111111111111111111111111111 1111111111111111111111111111111 111111111111111 11,11 '11'111'111111111111111111111111111 111111 1 'qIIIIi11,11111,1,111111111111111,11, 111111111111 111111 »I in000n 1111111111 111111 11111111111111 1111111111 Him Celebrating Downtown Yakima! '',111111111111 ....A Celeluraticn ci Latitic Culture "II 1' ....Summer Evening t cure. t Series 11111'1'1'1'111111111111111111 11111111111111 11111 1111 111111111111111111 11111 111111111111111111111111111111111111111 11 11111 111111111111111111111111111111111111111111 111111 ll11111111111111111111111 CIN OF 'Yakima 2014 PRELIMINARY BUDGET SUMMARY TABLE OF CONTENTS SECTIONS I. INTRODUCTION ➢ Transmittal ➢ Budget Summary II. GENERAL GOVERNMENT FUNDS ➢ Year in Review ➢ Revenue Trends ➢ Expenditure Trends III. OTHER FUNDS IV. STRATEGIC INITIATIVES V. EXHIBITS ➢ Three -Year Budget Comparison ➢ What You Pay and What You Get ➢ Supplemental Information . of 'Yakima 2014 PRELIMINARY BUDGET SUMMARY Equipment Rental $5,864,750 2.6% Water & Irrigation $17,028,037 7.6% Wastewater $33,188,432 14.9% Insurance & Risk $11,584,515 5.2% Police, Courts, Fire $45,531,246 20.4% Refuse $5,670,633 2.5% Transit $9,989,033 4.5% Stormwater $3,115,519 1.4% Airport $12,200,255 5.5% Capital Improvement $32,271,456 14.5% Debt Service $7,113,635 3.2% ($66.1 Million General Government) $222.7 MILLION City Administration $7,142,042 3.2% Comm &Tech & Other Svcs $9,439,388 - 4.2% Other Operating Funds $10,043,717 - 4.5% Streets, Eng, Plan & Codes $5,896,041 - 2.6% Parks & Recreation $4,412,448 - 2.0% Com & Econ Development $2,223,560 - 1.0% Preface -1 2 — Preface �vgmn�- PoIIIIIIIII m rrW�l,�.,,r c CITY OF Tal ima STRATEGIC PRIORITIES Economic Development Public Safety Improve the Built Environment Public Trust and Accountability Partnership Development Adopted 2012 Preface— 3 4— Preface 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: November 5, 2013 SUBJECT: City Manager's 2014 Preliminary Budget Summary (updated from October 17) 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 $222,714,708 and represents an $18,738,757 or 9.2% increase over the projected FY 2013 year-end expenditures. The 2014 expenditure budget of $222.7 million is supported by revenue of $209.6 million and surplus reserves of $13.1 million. At the end of 2014, citywide budget reserves are projected to be at $47.4 million, or 21.3% 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 Fund Estimate Budget % Change General $53,494,980 $57,181,843 6.9% Parks and Recreation 4,346,215 4,357,215 0.3% Street & Traffic Operations 5,230,123 4,596,360 (12.1%) General Government Subtotal 63,071,318 66,135,418 4.9% Utilities/Other Operating 65,321,537 64,549,505 (1.2%) Capital Improvement 52,451,182 56,205,847 7.2% Risk Management Reserves 3,638,900 3,360,500 (7.7%) Employee Benefit Reserves 13,444,849 11,802,538 (12.2%) G.O. Bond Debt Service 3,594,215 4,809,441 33.8% Utility Revenue Bond Debt Service 2,129,686 2,146,286 0.8% Trust and Agency Funds 527,200 625,171 18.6% Total $204,178,887 $209,634,706 2.7% 2 — Section I • Introduction 2013 VS. 2014 EXPENDITURE BUDGET COMPARISON 2013 13 vs. 14 Year -End 2014 Budget Fund Estimate Budget % Change General Fund $53,431,800 $56,936,455 6.6% Parks 4,128,949 4,412,448 6.9% Streets & Traffic 5,335,438 4,786,409 (10.3%) General Government Total 62,896,187 66,135,312 5.1% 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 66,633,842 67,737,845 1.7% 52,210,864 64,889,845 24.3% 3,795,852 3,371,576 (11.2%) 12,097,944 12,843,823 6.2% 3,690,000 4,968,849 34.7% 2,127,561 2,144,786 0.8% 523,700 622,671 18.9% $203,975,950 $222,714,707 9.2% 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 $3,064,100 or 4.9% increase over the projected 2013 year end revenues. The 2014 year-end General Government operating reserves are projected to be $11,083,332 or 16.8% 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 $285,000 of 0.7% new construction. The combined general operating and debt service property tax levy will decrease by .36% over 2013 combined tax levy. ➢ 5% growth in sales tax (3% base plus new major retailer) $720,000 ➢ Franchise and utility tax growth of 5.3% ($500,000 cable tax moved to GG) $777,500 ➢ Charge for services growth of 14.8% (New Engineering Programs) $904,000 ➢ State liquor excise tax reinstated $150,000 BALANCING STRATEGY We have balanced the 2014 General Government Fund budget using the following strategies: ➢ Instituting a 2% vacancy rate. Personnel costs are budgeted at 98% to account for a 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 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 hiring of two additional firefighters and a third to fill the firefighter vacancy that resulted in 4 — Section I • Introduction 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. 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 Introduction • Section I - 5 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 officer. The 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. 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 6 — Section I • Introduction 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 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. Introduction • Section I - 7 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. Targeted Built Environment Investments Road Improvements $16,500,000 (Improvement) - $2,000,000 (Debt Service) 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 8 - Section I • Introduction 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, $16.5 million dollar road rehabilitation bond is approximately $2,000,000, which is currently budgeted in a debt service fund. This investment would meet the minimum City Charter obligation to spend $2 million annually on road rehabilitation or reconstruction. 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 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, Introduction • Section I - 9 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. 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. Graffiti Abatement Coordinator $50,000 To improve the visual quality of the City, the City proposes to budget a second Graffiti Abatement Coordinator 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. 10 - Section I • Introduction 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 or 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 (2014) - $133,300 Annually 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 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 Introduction • Section I -11 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. 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. 12 — Section I • Introduction 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 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. Introduction • Section I -13 Visitors Information Center Additional $20,000 - Total Budget $60,000 (2014) 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 $65,000,000 In response to the public's dissatisfaction with the City's infrastructure, $65.0 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 Description Road Improvements Airport Taxiway Improvements Railroad Grade Separation WW Treatment Plant - Biosolids Impr. Project Yakima Rev. Development Area (LIFT) Water Treatment Plant Lagoons WW Collection System - Beech St. Alternative Outfall/WW Treatment Plant Naches River Water Treatment Plant Intake Replace 3 Transit Buses 2014 Budget $16,500,000 11,162,885 4,898,000 4,700,000 2,473,235 2,100,000 2,000,000 1,800,000 1,500,000 1,300,000 $48,434,120 Funding Source GO Bonds Grant/Match State & Federal Grants State Loans/Capital Rates State/Match/County SIED Prog. State/Match Capital Rates/Reserves 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. 14 - Section I • Introduction 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. 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 Introduction • Section I —15 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. General Fund Parks and Recreation Street & Traffic Operations General Government Subtotal 2014 BUDGET SUMMARY Est. 2014 Estimated Beginning 2014 2014 Use of 2014 Ending Fund Balance Revenue Expenditure Reserves Fund Balance $9,245,322 $57,181,843 $56,936,455 ($245,387) $9,490,709 678,057 4,357,215 4,412,448 55,233 622,824 1,159,848 4,596,360 4,786,409 190,049 969,799 11,083,227 66,135,418 66,135,312 (105) 11,083,332 Utilities/Other Operating 16,381,886 64,549,505 67,737,845 3,188,340 13,193,546 Capital Improvement 22,266,439 56,205,847 64,889,845 8,683,998 13,582,441 Risk Management Reserves 1,125,161 3,360,500 3,371,576 11,076 1,114,085 Employee Benefit Reserves 6,288,585 11,802,538 12,843,823 1,041,286 5,247,299 G.O. Bond Debt Service 553,278 4,809,441 4,968,849 159,408 393,869 Utility Revenue Bond Debt Service 1,758,713 2,146,286 2,144,786 (1,500) 1,760,213 Trust and Agency Funds 1,008,424 625,171 622,671 (2,500) 1,010,924 Total $60,465,713 $209,634,706 $222,714,707 $13,080,003 $47,385,710 The estimated resources for all funds, including beginning balances, are $270.1 million. This represents an increase of $5.7 million or 2.2% more than the 2013 Year -End Estimate of $264.4 million. The expenditure budget for FY 2014 for all funds is $222.7 million. This represents an increase of $18.7 million or 9.1% 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%). 16 — Section I • Introduction ➢ 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 $66.6 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 Poor's 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. Introduction • Section I -17 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. 18 - Section I • Introduction 2014 EXPENDITURE BUDGET BY FUND ($222.7 MILLION) Capital Improvement $64.9 29.1% Utilities/Other Operating $67.7 30.4% Risk Management Reserves Employee $3.4 Benefit 1.5% Reserves $12.8 5.8% Parks and Street & Traffic Recreation Operations $4.4 $4.8 2.0 2.1% 2014 RESOURCES BUDGET BY FUND ($270.1 MILLION) Capital Improvement $78.5 29.1% Utilities/Other Operating $80.9 30.0 Resources= Revenues plus Beginning Fund Balance Risk Management Reserves Employee $4.5 Benefit Reserves $18.1 6.7% 1.7% Street & Traffic Operations $5.8 2.1% Parks and Recreation $5.0 1.9% G.O. Bond Debt Service $5.0 2.2% Utility Revenue Bond Debt Service $2.1 1.0 Trust and Agency Funds $0.6 0.3 General Fund $56.9 25.6% G.O. Bond Debt Service $5.4 2.0 Utility Revenue Bond Debt Service $3.9 1.4% Trust and Agency Funds $1.6 0.6 General Fund $66.4 24.6% Introduction • Section I -19 The proposed 2014 total city-wide expenditure budget of $222.7 million is balanced within existing resources and reflects an increase of $18.7 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 $2M Street Impr. Debt Service Total General Fund Add 0.2 Wastewater Laboratory Delete 0.25 Deputy HR 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 20 — Section I • Introduction GENERAL GOVERNMENT STRATEGIC INITIATIVES Description City Manager Add 1.0 Gang Free Initiative Manager Comm & Tech/TT Reorganization Enhance/Expand Downtown Events Implement Airport Marketing Plan Quality Customer Service Academy Community Development Add 2.0 Code Compliance Officers Police Parking Enforcement Officer Expand Downtown Bicycle/Foot Patrol Expand Training Funding Fire Fire Staffing to Eliminate Brownouts Expand Training Funding Utilities & Engineering Right of Way/Street Cut Program Reinstate Supervising Traffic Engineer Street Cut Charge Public Works Add 1.0 Parks Administrative Assistant Improvement to SE Community Center Total General Government Economic Development Public Safety Built Environment Increase Notes $88,600 142,200 10,000 100,000 50,000 390,800 Transition f/Planning - Svc Mgmt Reinstate IT Manager Total Budget $110,000 100,000 9 months. $133,300 Annually 57,000 Supported by $40K Ticket Revenue 68,800 Expanded to Spring/Fall 75,000 Succession Planning 200,800 321,000 General Fund Portion 75,000 396,000 94,100 (150,000) Revenue (55,900) Priority PS PS ED ED PT BE PS PS PS PS PS BE BE 59,500 Reinstate - was shared w/Planner PA 45,000 Partnership with OIC PA 104,500 $1,136,200 Strategic Priority Legend Public Trust and Accountability Partnerships ED PS BE PT PA Introduction • Section I — 21 Other Fund Changes The following is a summary of strategic initiatives in the other operating and utility funds. OTHER FUND STRATEGIC INITIATIVES Description City Manager City Hall Improvements Implement Downtown Retail/Master Plan Cascade Mill Project Visitor Center Funding Convention Center Management Fee Capitol Theatre Repair/Improvements Airport Terminal Improvements Police New Communications Center Construction License Plate Reader Fire Brush Truck Fire Staffing to Eliminate Brownouts Utilities & Engineering Pedestrian/Bicycle Connectivity Start Implementing Integrated SW Plan Rate Studies for SW/WW & Ind WW Wastewater Collections Master Plan Biosolids Dryer Salmon Recovery/Riparian Restoration Road Improvements 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 Total City - Other Funds Economic Development Public Safety Built Environment 22 — Section I • Introduction Inc/(Dec) Notes $200,000 170,000 2,400,000 20,000 13,900 140,000 50,000 2,993,900 REET 1 Economic Development Fund Cont St Design/Landfill Cleanup Increase from $40k to $60K Increase from $694.3K to 798.2K Airport Operating Fund 195,000 1st yr Debt Svc ($4.2M Impr.) 135,000 Law and Justice Capital Fund 330,000 130,000 Fire Capital Fund 132,900 EMS Fund 262,900 40,000 600,000 110,000 100,000 4,700,000 1,800,000 16,500,000 23,850,000 46,100 67,800 10,000 1,290,000 392,000 1,621,000 85,000 3,511,900 $30,948,700 Arterial Street Fund - Gas Tax Stormwater Capital Utility Fund Wastewater Total Project - $7.9 million Grants/Utility Revenues Funded by GO Bonds Reinstatement - PW Admin Chrgs Transit Operating Transit Operating Transit Capital Transit Capital Equipment Rental Equipment Rental Strategic Priority Legend Public Trust and Accountability Partnerships ED PS BE Priority BE ED ED PA PA PA BE PS PS PS PS BE BE BE BE BE BE BE PT PA 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 Del (1.00) ($46,200) HR Specialist Del (1.00) (75,800) Human Resources Asst Add 0.60 15,000 Fleet Technician Add 1.00 61,000 Police Lieutenant Add 1.00 124,300 Housing Rehab Asst Add 1.00 50,000 Telephone Technician Add 1.00 68,500 Add 7.00 - Laboratory Technician Add 0.20 - Total Mid -Year Changes 9.80 196,800 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 11 Admin Associate Codes Enf Officer Department Asst 11 Transit Cleaner Department Asst 11 Multiple Positions Tota12014 Changes Add 1.00 100,200 Trans 0.00 111,500 Trans 0.00 82,500 Trans 0.00 99,000 293,000 Add 1.00 88,600 Del (1.00) (67,900) Add 1.00 56,800 Trans 0.00 178,500 Add 2.00 163,700 Add 1.00 - Add 1.00 94,100 Trans 0.00 - Add 1.00 59,500 Add 2.00 100,000 Add 1.15 - Add 0.30 - Add 1.00 - Trans 0.00 173,000 11.45 $1,239,500 Total General Government Changes ($18,000) Mid -Year Change Mid -Year Change 27,800 Mid -Year Change - Police Car Program - SRO Contract - Rev $52k - Graffiti Abate/Perm PT - 5 mo. Public Safety Interoperability 543,900 Assumption of Airport Ops 11,000 Reinstatement of position 564,700 43,000 (111,500) (82,500) (99,000) (293,000) (178,500) 107,900 67,800 10,000 46,100 (173,000) ($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 $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 10.6 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 10.65 FTE's. Introduction • Section I - 23 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 capita expenditures on payroll is $503 which $924 is $44 less than the average city per capita of $547 $316 $324 $362 $387 $398 $490 $503 1 $580 $615 1 $811 $849 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. 24 - Section I • Introduction 2014 GENERAL GOVERNMENT PRELIMINARY BUDGET (By Department) 2014 Dollars in Millions Forecast Organizational Unit Budget Police Fire Streets & Traffic Oper. Parks Transfers Information Systems Code Administration Financial Services Municipal Court Police Pension Utility Services Legal Engineering Indigent Defense Records Purchasing Human Resources Economic Development Planning City Hall Maintenance City Manager Gang Free Initiative City Council Intergovernmental State Examiner Hearings Examiner 2% Vacancy Rate Total $26,057,587 10,167,258 4,786,409 4,412,448 4,342,275 2,912,612 1,537,371 1,488,836 1,344,118 1,343,325 1,316,181 1,314,323 1,109,632 600,500 563,921 549,369 513,151 486,733 458,481 407,885 372,684 333,105 282,075 244,031 110,000 31,000 (950,000) • -1 1 3 5 7 9 11 13 15 17 19 21 23 25 • IED 0 1 1 1 1 1 11 11 1 IU • Personnel ■ Non -Personnel °/0 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% 0.5% 0.4% 0.4% 0.2% 0.0% (1.4%) $66,135,312 100.0% 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. Introduction • Section I - 25 The preceding chart summarized General Government by functional area, while the following chart summarizes general government operation by classification of expenditure. GENERAL GOVERNMENT EXPENDITURES BY CLASSIFICATION Salaries & Benefits $46.6 70.4% Supplies $2.7 4.0% Other Services & Charges $6.8 10.4% Intergov't Fund Services $6.8 10.3% Capital Outlay $0.0 0.1% Interfund Payments for Service $2.2 3.3% Debt Service $1.0 1.5% Projected Ending Cash Balance (Reserve) General Government resources consist of annual revenues and cash reserves (fund balances). Prudent fiscal management dictates that adequate reserves be maintained to help ensure the City is prepared to meet any number of unbudgeted and/or unforeseen circumstances that may arise, without requiring major disruptions to normal business operations. Reserves are typically utilized for many different business purposes, including: provide for emergencies; cover temporary cash flow needs; take advantage of one-time, unanticipated opportunities; provide grant matching funds; cover revenue shortfalls; and accommodate unforeseen expenditures and other contingencies. 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% 26 — Section I • Introduction 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. Beg. Reserve Balance Revenue Total Resources 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) $9,948,220 $9,944,260 $10,908,094 I $11,083,227 61,580,246 62,668,304 63,071,318 1 66,135,418 $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 66,135,312 2,458,093 End. Reserve Balance $10,756,284 $8,935,345 $11,083,227 $11,083,333 % of Annual Expenditures 17.7% 14.0% 17.6% 16.8% Inc/(Dec) in Reserves f/ Prior Year % of Expenditure Budget $808,064 ($1,008,915) $175,132 $106 1.3% (1.6%) 0.3% 0.0% 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. Introduction • Section I — 27 ➢ 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. 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. 28 - Section I • Introduction ➢ 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 $0 $3,500 $3,000 - $2,500 - $2,000 - $1,500 - $1,000 - $500 - $0 TOTAL EXPENDITURES Yakima's per capita total expenditures are $1,570, which is $564 less than the average city per capita revenue of $2,134 $1,235 1 $1,356 1 $1,430 $1,570 1 $1,752 1 $1,851 1 $2,070 $2,139 $2,763 $2,989 $3,111 $3,338 1 1 Pasco Kennewick Marysville Yakima Kent Kirkland Auburn Renton Everett Bellevue Redmond Richland TOTAL RESOURCES Yakima's per capita total revenue is $1,548, which is $694 less than the average city per capita of $2,242 $1,270 $1,306 1 $1,389 1 $1,548 1 $1,751 1 $1,930 $2,002 1 $2,314 $2,596 $3,347 $3,356 $4,099 II Pasco KennewickMarysville Yakima Kent Kirkland Auburn Renton Everett Redmond Richland Bellevue Introduction • Section I - 29 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 2014, 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. 2014 OPERATING AND RESERVE FUNDS Division Reserves, Risk Mgmt, Emp Benefits Cap Theatre, Cemetery, Trust Rsys Wastewater Water/Irrigation Transit Refuse Equipment Rental Stormwater Airport Special Purpose, Housing, Emer Svs Public Wks Admin, Cable TV, Misc 2014 Projected $16,227,399 $23,207,508 $20,213,432 $21,864,739 $11,086,533 $13,089,319 $8,240,033 $9,128,689 $5,670,633 $5,946,765 $3,592,746 $3,945,625 $2,325,519 $3,614,369 Dollar In Millions 0 2 4 6 8 10 12 14 16 18 20 22 24 Reserves, Charges Water Rates, Irrigation Fees, Reserves Transit Sales Tax, Oper Grants, Fare Box Refuse Rates ElCharges N. Stormwater Fees $1,037,370 $1,081,127 Airport Fees $14,053,196 $17,744,229 Total Expenditures $82,446,861 Total Resources $99,622,370 30 - Section I • Introduction • Expenditures • Resources 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. 2014 CAPITAL AND DEBT SERVICE FUNDS Dollars in Millions Division 2014 Projected Streets $29,035,797 $31,233,910 Wastewater $14,557,157 $20,880,079 Airport $11,162,885 $11,198,517 Water/Irrigation Equipment Rental Transit Stormwater $6,504,133 $8,960,542 $2,079,054 $5,469,397 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Reserves, Grants, .5 Gas Tax, REET, Bonds Reserves, Charges, Loans Reserves, Charges Reserves, Charges, Loans 16 Reserves, Charges $1,749,000 $3,525,799 Ti I Reserves, Taxes $790,000 $1,610,613 Sp Purp Cap, Misc GO Debt $8,354,508 $10,480,547 Total Expenditures $74,232,534 Total Resources $93,359,404 J Reserves, Charges • Total Expenditures • Total Resources Reserves, Grants, Taxes, Loans Introduction • Section I — 31 32 — Section I • Introduction GENERAL GOVERNMENT FUNDS: YEAR IN REVIEW 2013 GENERAL GOVERNMENT ESTIMATED REVENUES AND EXPENDITURES General Parks & Rec Street Fund Fund Fund Total Actual Beginning Balance $9,182,140 $460,791 $1,265,164 $10,908,095 Estimated Revenue 53,494,980 4,346,215 5,230,123 63,071,318 Total Estimated Resources 62,677,120 4,807,006 6,495,287 73,979,413 Less: Estimated Expenditures 53,431,799 4,128,949 5,335,438 62,896,186 Estimated Ending Balance 2012 $9,245,321 $678,057 $1,159,849 $11,083,227 General Government is the term used to describe basic tax supported activities, which are included in three funds: General Fund Services provided include police, fire, code enforcement, planning, legal, municipal court, city administration, financial services, purchasing, and information technology. ➢ 2013 year-end revenue estimate is $53,494,980 - $1,417,300 or 2.7% above the 2012 actual, and $5,074,589 or 10.5% greater than 2011 actual. ➢ 2013 year-end expenditure estimate is $53,431,800 - $622,171 or 1.2% under the authorized, amended budget of $54,053,971 due primarily to salary savings from position vacancies. Parks and Recreation Fund Services include Parks programs and maintenance. ➢ 2013 year-end revenue estimate is $4,346,215 - $135,326 or 3.2% above the actual levels for 2012, with the primary increase being additional property tax allocation to adequately fund parks operations, recreation programs and rebuild reserves in this area. ➢ 2013 year-end expenditure estimate is $4,128,949 - just ($3,476) or (0.1%) under the 2013 amended budget. Streets Fund Services include Street and Traffic operations and maintenance. ➢ 2013 year-end revenue estimate is $5,230,123 - ($61,555) or (1.2%)% less than actual levels for 2012, also related primarily to an adjustment of the property tax allocation to "right -size" reserve levels. ➢ 2013 year-end expenditure estimate is $5,335,438 - ($155,385) or (2.8%) under the 2013 amended budget-- also due primarily to position vacancies. The effects of the national economic recession have turned around in 2012 when the City experienced an increase in Sales Tax for the first time since the recession started in 2008. The upward trend is continuing in 2013. General Government amended revenue budget is $62,668,274, General Government Funds • Section II —1 so the year-end estimate of $63,071,318 is about $403,044 or 0.6% more than budgeted, with most of this increase coming from the final property tax levy being greater than anticipated, and ongoing savings in the Firefighter's pension fund from the switch of pensioners over age 65 to Medicare and related supplemental insurances for their 100% health care, which freed up property tax for current operations. The 2012 actual revenue for these 3 funds was $60,517,810, so the 2013 estimate is $2,159,310 or 3.6% above the prior year actual. This is due primarily to improved sales tax and collecting a full year of the utility tax that was increased the beginning of 2012. The annual rate of inflation as measured by the CPI -U (All Urban Consumers) is 1.5% in August, 2013 for all cities, and the Seattle index is 1.1%. GENERAL GOVERNMENT EXPENDITURE COMPARISON 2013 BUDGET VS. YEAR-END ESTIMATE Fund/Department Police Fire Transfers Technology Services Financial Services Code Administration Municipal Court Utility Services Police Pension Legal Indigent Defense Engineering Purchasing Environmental Planning Records Human Resources Economic Development City Hall Maintenance City Manager City Council Intergovernmental State Examiner Hearing Examiner 2% Vacancy Rate Total General Fund Parks & Recreation Street & Traffic Operations Total General Government 2013 2013 Amended Year -End Budget Estimate Variance $25,880,899 $25,160,522 $720,377 9,909,477 9,789,746 119,731 3,002,275 3,002,275 0 2,435,038 2,291,558 143,480 1,478,418 1,463,365 15,053 1,389,047 1,38 7,163 1,884 1,384,004 1,345,450 38,554 1,324,950 1,320,889 4,061 1,297,225 1,345,925 (48,700) 1,28 7,573 1,2 73,983 13,590 833,500 540,500 293,000 686,172 662,004 24,168 541,244 542,991 (1,747) 534,116 529,622 4,494 461,070 455,179 5,891 459,969 458,094 1,875 457,216 454,640 2,576 372,923 361,918 11,005 366,555 371,626 (5,071) 284,751 275,801 8,950 261,549 261,049 500 110,000 110,000 0 26,000 27,500 (1,500) (730,000) 0 (730,000) 54,053,971 53,431,800 622,171 4,132,425 4,128,949 3,476 5,490,823 5,335,438 155,385 $63,677,219 $62,896,187 $781,032 2 - Section II • General Government Funds Year -End Est. as Percent of Budget 97.2% 98.8% 100.0% 94.1% 99.0% 99.9% 97.2% 99.7% 103.8% 98.9% 64.8% 96.5% 100.3% 99.2% 98.7% 99.6% 99.4% 97.0% 101.4% 96.9% 99.8% 100.0% 105.8% 0.0% 98.8% 99.9% 97.2% 98.8% The preceding table provides a breakdown of the year-end estimate of General Government budgets for 2013. The largest positive variance (expenditure savings) is in the Police Department and relates to salary savings from several vacancies. The next is a result of the new indigent defense rules being postponed until the beginning of 2015. Most of the other positive variances are also related to position vacancies. Following is a listing of departments projected to exceed budget: ➢ Police Pension — There are currently 4 pensioners in long-term care facilities, compared to the historical average of 2 per year. ➢ Purchasing and City Manager — Both have relatively tight budgets and no vacancies, which made it difficult to absorb the lump sum cash -outs of the labor settlements and/or the new vacation sell -back program. ➢ Hearing Examiner — This expense is a function of both the volume and complexity of cases coming before the Hearing Examiner. Because the legal level of control for budget authority is the fund level, and General Fund is estimated to be under spent in total, staff is not proposing budget amendments for these overages at this time. GENERAL FUND THREE YEAR COMPARISON 2013 2011 2012 Year -End Actual Actual Estimate Beginning Balance $8,275,553 $8,440,130 $9,182,140 Revenues 48,420,391 52,077,680 53,494,980 Total Resources 56,695,944 60,517,810 62,677,120 Expenditures 48,255,814 51,487,699 53,431,799 Ending Balance $8,440,130 $9,030,111 $9,245,321 General Government Funds • Section II — 3 GENERAL GOVERNMENT FUNDS: REVENUE TRENDS The City receives revenue from many different sources; some revenue is available for any government purpose and some revenue is restricted in use to a specific fund(s) and/or a specific purpose. The sources of revenue that are available for use within the General Government Funds (for general purposes or for a restricted purpose within General Fund, Parks or Street Funds) are listed in the following charts, along with a three-year comparison of the amount of revenue received from each source. For 2014, total General Government revenues are budgeted to be $66,135,918; $3,064,600 or 4.9% more than the 2013 year-end estimate of $63,071,318. Total beginning cash reserves are estimated to be $11,083,227, $175,132 or (1.6%) more than the 2012 estimate of $10,908,094. This fund balance is about 16.8% of the proposed 2014 budget. Variances in revenues at this combined level are explained briefly below. A more detailed explanation follows the chart. ➢ Sales Tax — for 2014 is projected to be approximately $720,000 or 5.1% above the 2013 estimate. Sales tax is currently running at 7.1% ahead of 2012 year-to-date through October. The 2014 estimate assumes a 3% increase in the base plus retail businesses moving into the City limits from a neighboring jurisdiction. ➢ Criminal Justice Sales Tax—is also projected to increase $223,000 or 8.1%, because of the both the general growth estimate and a reallocation of this tax from the capital fund because the new Police take-home program reduced 2014 vehicle purchases in the capital fund. ➢ Property Tax — increased $291,000 or 1.9%. This includes the levy limit increase of 1%, plus new construction (about 0.7%), and a redirection from the Firemen's pension fund in response to the continued savings from transferring LEOFF 1 medical expense of pensioners over age 65 to Medicare and purchased Medicare supplemental insurance. ➢ Franchise and Utility taxes — increase (2014 over 2013) of $777,500 or 5.3% is largely due to Cable TV tax of $500,000 being redirected from debt service on the law and justice facility to General Fund, to help fund the Charter amendment directing the City to spend $2 million on street improvements. This G.O. bond issue was paid in full in 2013. The $277,500 balance is 1.9% inflationary growth assuming rate adjustments proposed in a few of the major utilities. ➢ Charges for Services — are up by $904,308 or 14.8% primarily because of a revised methodology to calculate the city service (i.e. administrative) charge to other operating funds ($360,000); a reallocation of engineering staff back into General Fund, and a corresponding increase in engineering fees for construction projects ($200,000); and a proposal to implement a street break fee ($150,000). Program usage is estimated to increase in a few areas, while other charges are estimated to remain flat. ➢ State Shared Revenue — is being increased by $144,685 or 5.2% mainly because the current state budget reinstated the Liquor Excise Tax which was discontinued for a year starting the 4th quarter of 2012. The balance of the revenue categories are expected to remain relatively flat. 4 — Section II • General Government Funds GENERAL GOVERNMENT RESOURCES THREE YEAR COMPARISON % of --2014 vs. 2013-- 2012 2013 Percent 2014 2014 Increase Percent Source Actual Estimate Change Budget Total (Decrease) Change General Sales Tax $13,494,843 $14,100,000 4.5% $14,820,000 22.4% $720,000 5.1% Crim. Justice Sales Tax(1) 2,497,008 2,747,000 10.0% 2,970,000 4.5% 223,000 8.1% Property Tax 15,334,939 15,608,000 1.8% 15,899,000 24.0% 291,000 1.9% Franchise & Utility Taxes 14,429,011 14,555,000 0.9% 15,332,500 23.2% 777,500 5.3% Charges for Services 5,664,903 6,103,481 7.7% 7,007,789 10.6% 904,308 14.8% State Shared Revenue 3,071,218 2,774,115 (9.7%) 2,918,800 4.4% 144,685 5.2% Fines and Forfeitures 1,512,477 1,613,000 6.6% 1,670,000 2.5% 57,000 3.5% Other Taxes 1,386,797 1,416,900 2.2% 1,420,500 2.1% 3,600 0.3% Other Revenue 636,158 605,018 (4.9%) 614,278 0.9% 9,260 1.5% Transfers from other Funds 1,511,458 1,390,000 (8.0%) 1,360,000 2.1% (30,000) (2.2%) Other Intergovernmental 1,149,151 1,378,804 20.0% 1,353,851 2.0% (24,953) (1.8%) Licenses and Permits 892,282 780,000 (12.6%) 769,200 1.2% (10,800) (1.4%) Total Revenue $61,580,245 $63,071,318 2.4% $66,135,918 100.0% $3,064,600 4.9% Beginning Fund Balance 9,948,220 10,908,094 9.6% 11,083,227 175,132 1.6% Total Resources $71,528,465 $73,979,412 3.4% $77,219,145 $3,239,732 4.4% (1) Some Criminal Justice sales tax is allocated to the Law and Justice capital fund (a non -general Governmental fund) for capital needs. GENERAL GOVERNMENT RESOURCES 2012 YEAR-END ESTIMATE AND 2013 BUDGET FORECAST Sales Tax/Crim Justice Sls Tax Property Tax Franchise & Utility Taxes Charges for Services State Shared Revenue Fines and Forfeitures Other Taxes Transfers from Other Funds Other Intergovernmental Licenses and Permits Other Revenue Beginning Fund Balance NMI $2,918,800 1.11 $1,670,000 $1,420,500 II $1,360,000 $1,353,851 E$769,200 . $614,278 $17,790,000 $15,899,000 $15,332,500 $7,007,789 2014 vs. 2013 Estimate Increase Total Resources Amount $3,239,732 Percent 4.4% ■ 2014 Budget ■ 2013 Y/E Estimate $11,083,227 0 5,000,000 10,000,000 15,000,000 20,000,000 General Government Funds • Section II - 5 In some instances, certain revenues are dedicated for specific purposes (i.e. grant proceeds). Additionally, certain revenues are generated by operations, so that if the operations are reduced or eliminated, the revenue would also be reduced or eliminated (i.e. Parks recreation program). The following chart summarizes net revenue by Department. NET REVENUE (Includes Dedicated Revenues) Net Department Expenditures Revenue City Management $6,064,781 $1,958,348 Legal 1,314,323 359,596 Municipal Court 1,344,119 303,857 Finance 8,444,017 2,427,252 Community Development 2,434,736 1,414,466 Engineering 1,109,632 1,012,500 Police 26,057,588 4,745,298 Fire 1,343,325 118,964 Parks & Recreation 4,412,447 1,288,615 Streets 3,041,733 1,508,360 $55,566,701 $15,137,255 This demonstrates that about 27.2% of General Government revenue is either dedicated to or generated by certain operations. This percentage increased from the 2013 level of 23.2% because of the increases noted in the Charges for Services category. GENERAL SALES TAX (SINGLE LARGEST REVENUE SOURCE FOR GENERAL FUND) ➢ 2014 revenue projection is $14,820,000 — 5.1% above the 2013 year end estimate. After 3 years of sales tax being about $1.1 million or 8% below the 2008 high of $13.7 million, sales tax picked up in 2012. The tax collected in 2012 was $13.5 million, 7.2% greater than 2011. This trend is continuing --2013 sales tax is about 7.1% ahead of 2012 year to date through October, so that the year-end estimate is $14.1 million (finally exceeding 2008). 2014 assumes an increase of 5.1% over this higher activity, to $14.8 million, assuming 3% growth in the base economy, along with the move of a major retailer into the City limits from a neighboring jurisdiction. The agricultural sector of our economy experienced a good year in 2012, which jump-started the growth; and construction sales tax is on the upswing, with Yakima School District projects slated to continue into 2014, and Yakima Valley Community College beginning a new building program. Of the 8.2% sales and use tax collected within the City, the City of Yakima receives only 0.85% (or about 10.4% of the total) in general Sales Tax revenue. The General Government Funds receive the full amount of the City's share of general sales tax revenues. (Note: the City also receives 0.3% sales tax revenues which are restricted for transit purposes and a portion of the 0.4% sales tax revenues which are restricted for criminal justice purposes. The State receives 6.5% and Yakima County receives .15% of the remainder — refer to Exhibit II for more information.) 6 — Section II • General Government Funds The following chart identifies Yakima s sales tax revenues as they relate to the total General Fund operating revenues (excluding interfund transfer revenues). This revenue source is very sensitive to economic conditions. As the graph below shows, sales tax receipts have trended downward over the past 10 years as a percentage of total revenue in the General Fund, as other revenue sources such as utility tax have generally kept up with inflation, and the City has been successful in obtaining grants. The decrease in the 2009 through 2011 reflects the deceleration in the sales tax growth rate, due to economic conditions. Although sales tax turned upward in 2012, the relative percentage of sales tax to the total remained flat because of the increase in the City utility tax rate. 34% .. 32% 30% 28% 26% 24°>rt" PERCENT OF SALES TAX COMPARED TO OPERATING REVENUE GENERAL FUND 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Criminal Justice Sales Tax 0.1% Sales Tax — A special 0.1% Criminal Justice Sales Tax was originally approved by the voters of Yakima County in the November, 1992, General Election and became effective January 1, 1993. The State allocates this 0.1% criminal justice sales tax revenue between the City and the County, based on a predefined formula. This revenue is restricted to providing criminal justice related services and is allocated based on operating vs. capital needs. This tax revenue is affected by the same regional economic factors that affect the General Sales Tax revenue. This tax is expected to generate $1,155,000 for the City in 2014 and is allocated in the City's budget forecast as noted in the following chart. 0.1% CRIMINAL JUSTICE SALES TAX 2013 2014 2012 Year -End Budget Fund Actual Estimate Forecast General Fund $851,436 $1,000,000 $1,090,000 Law and Justice Capital 200,000 125,000 65,000 Total $1,051,436 $1,125,000 $1,155,000 0.3% Sales Tax — Another special sales tax of 0.3% dedicated to Criminal Justice expenditures was approved by the Yakima County voters in November, 2004, and took effect on April 1st of 2005. The tax is on sales inside the County only and the proceeds are divided between the County and Cities on a predefined formula under which the County receives 60% and all cities within the County share the remaining 40%. Anticipated revenue is depicted in the table below. (Note: General Government Funds • Section II — 7 Public Safety Communications and Law and Justice Capital Finds are not part of General Government.) This tax is expected to generate $2,081,000 in 2014, and is allocated in accordance with the following chart. 0.3% CRIMINAL JUSTICE SALES TAX 2013 2014 2012 Year -End Budget Fund Actual Estimate Forecast General Fund (for Criminal Justice Expenditures) $1,645,572 $1,747,000 $1,880,000 Public Safety Communications 176,230 177,500 175,000 Law and Justice Capital 113,267 96,500 26,000 Total $1,935,069 $2,021,000 $2,081,000 Exhibit III contains a summary of how these funds have been spent over the past 5 years. PROPERTY TAX ➢ Property tax provides approximately 24.0% of all General Government revenue in the 2013 budget. The 2014 budget is based on a 1% increase in the property tax levy, as currently allowed by state law, or approximately $169,000, plus a conservative 0.7% or $116,000 increase for new construction for a total increase of $285,000 for a total, with Fire pension, of $17,085,000. The 2014 request complies with the levy limit restrictions which cap property tax levy increases to the maximum of 1% or the rate of inflation, whichever is less. (Note: state law defines the rate of inflation as measured by the Implicit Price Deflator for consumer goods). State law also allows the City to increase the levy by more than 1% if approved by the majority of voters. As a point of clarification, the property tax levy restriction limits the change in the dollars levied (1% would generate about $169,000 for 2014) — it does not limit growth in assessed value. The 1% limit affects the total dollars levied, while assessed valuation is the mechanism used to allocate the levy ratably among the property owners. Since most consumer activity (i.e., wages, equipment, etc.) is more closely tied to the Consumer Price Index (CPI), and CPI is greater than 1% in almost all years, the future effect of 1% or less growth in Property Tax is restrictive to the City since Property Tax is one of General Government's primary revenue sources. This restriction was recognized in the Five -Year Financial Plan, and is a component in the projected deficits going forward. For sake of comparison, a 1% increase in just the Yakima Police Patrolman's Association and the International Association of Firefighters bargaining units together amount to almost $200,000 in 2014. The following chart and graph depict the 2014 budgeted allocation of the City's property tax revenues. 8 — Section II • General Government Funds 2013 PROPOSED GENERAL PROPERTY TAX LEVY - BY FUND 2013 2013 Est. 2012 Amended 2013 2014 vs. 2014 Actual Budget Estimated Budget Budget General $9,935,939 $10,016,000 $10,125,000 $11,178,000 10.4% Parks & Recreation 1,683,000 1,457,000 1,812,000 1,649,000 (9.0%) Street & Traffic 3,716,000 3,856,000 3,671,000 3,072,000 (16.3%) Sub -Total General Government 15,334,939 15,329,000 15,608,000 15,899,000 1.9% Fire Pension 1,315,000 1,315,000 1,192,000 1,186,000 (0.5%) Total $16,649,939 $16,644,000 $16,800,000 $17,085,000 1.7% 2013 PROPOSED GENERAL PROPERTY TAX LEVY - BY FUNCTION General Fund $9,834,675 57.6% Fire & Police Pension $2,529,325 14.8% otroo woo,,,i(),/ii111111))),11,1h„,, Parks $1,649,000 9.7% Streets $3,072,000 18.0% Note: Property tax is allocated among the General Government funds based on each funds need to balance to available resources. FRANCHISE AND UTILITY TAXES Franchise and utility taxes are collectively the third largest category of General Government revenues. They comprise 23.2% of 2014 projected General Government revenues and 23.1% of projected 2014 General Fund Revenues. ➢ 2014 projection is $15,332,500 - $777,500 or 5.3% above the 2013 year-end estimate of $14,555,000. General Government Funds • Section II — 9 These revenues are largely a function of weather conditions and utility rates in the Valley. Going into 2014, the base increase is estimated to be $277,500 or 1.9%. The balance or $500,000 is from the re -direction of the Cable TV utility tax from Law and Justice debt service to General Fund (since this bond issue will be paid in full in 2013), to help support the voted City Charter amendment to increase funding for street improvements by $2 million. The Franchise and utility taxes combined are the only major revenue source keeping pace with the rate of inflation, primarily because of rate increases implemented by utility providers. The graphs below depict how the City of Yakima compares to other cities of somewhat similar population relative to (a) sales tax, (b) property tax and (c) utility tax per capita. These comparisons show that for all 3 of the major tax sources, Yakima is below the state average. This data was compiled from the State Auditor's Local Government Comparative Statistics for 2012, and includes comparisons of comparable Washington State cities with population between 45,000 and 125,000. $450 $400 $350 $300 $250 $200 $150 $100 $50 $o $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 SALES & USE TAXES Yakima's per capita sales tax is $248, which is $12 less than the average city per capita of $260 $225 $235 $248 irnfVl//r%//rl/r/00 $248 6ffdflVUd $252 $377 $391 $450 MI II Richland Kennewick Auburn Yakima Kirkland Renton Redmond Everett Bellevue Note: Only Yakima and Everett have a sales tax levied for Transit purposes. PROPERTY TAXES Yakima's per capita property tax is $170, which is $84 less than the average city per capita of $254 $166 $170 $146 „ $250 $289 $356 $404 /// Pasco Kennewick Kent Yakima Auburn Marysville Kirkland Rich and Bellevue Renton Everett Redmond 10 — Section II • General Government Funds $400 $350 $300 $250 $200 $150 $100 $50 $o B & O / UTILITY TAXES Yakima's per capita B&O / utility tax is $174, which is $44 less than the average city per capita of $218 $91 $150 V11 CfJuholn $170 $172 111111U1111111 1 is`, $174 $504 Marysville Pasco Kennew ck Auburn Kent Yakima Renton Kirkland Richland Redmond Everett Bellevue Note: Yakima's per capita B&O/Utility taxes were $144 or $64 less than the average City per capita in 2011. The additional 6% tax on the City utilities was started in 2012, and Yakima remains below the comparable average. CHARGES FOR SERVICES This revenue category consists of revenues from various parks and senior citizen programs, plan checking fees and street and traffic engineering fees, etc. However, the largest component (more than half), are fees paid by other City funds for General Fund services (legal, administration, purchasing, utility billing, etc). ➢ 2014 projection is $7,007,789. This is a 14.8% or $904,308 increase from the 2012 estimate. Reorganizations in the Engineering and Public Safety Communications divisions resulted in 2 activities currently being paid in other funds moving into General Government funds, along with their corresponding revenue. Specifically, the allocation of engineering staff to the City utilities was changed upon review by the new Utilities and Engineering Director, moving the expense from City utilities into General Fund. This change comes with additional revenue of about $200,000. Also, the Electronics Function is coming under the Information Technology Manager moving from the Public Safety Communications fund, which adds about $103,000 to this revenue category. A new encroachment fee for street breaks is being proposed, and $150,000 is the estimated revenue for this new program. The other major component of this increase is a re-evaluation of the City Service Charge, including a new methodology to keep the charge more consistent among the various funds. This category is estimated to increase by about $360,000. Other changes are related to usage estimates, and are relatively flat. General Government Funds • Section II —11 STATE SHARED REVENUE State shared revenues are the fifth largest category of revenues received for General Government Operations. ➢ 2014 projection for all revenues within this category is $2,918,800; an increase of $144,685 from the 2013 year-end estimate of $2,774,115. The State Legislature eliminated the Liquor Excise Tax for one fiscal year (2012-2013) in order to help balance the State's budget. This tax has been reinstated starting the 4th quarter of 2013. Other revenues in this category are relatively flat. FINES AND FORFEITURES These revenues come primarily from criminal fines and noncriminal penalties assessed in the City of Yakima's Municipal Court, and parking violations. This revenue category is $1,670,000, an increase of $57,000 for 2014. This is due primarily to the re -instatement of a Parking Enforcement Officer in the 2013 — parking tickets are estimated to increase about $40,000. OTHER TAXES This category includes 500 Business Licenses and 900 Gambling Taxes. The 2014 projection is $1,420,500, up only 0.3% or $3,600 — virtually the same as the 2013 year-end estimate. OTHER REVENUES The balance of revenues supporting the general government funds consists of other financing sources and miscellaneous revenues, including interest earnings. For 2014, $614,278 is expected to be generated in this category, a slight increase of $9,260 or 1.5% from the 2013 year end estimate of $605,018. TRANSFERS FROM OTHER FUNDS This represents the transfer of 3.5% of City owned utility taxes from General Fund into the Parks and Recreation fund. The 2014 projection is $1,360,000, and is derived from utility tax estimates. OTHER INTERGOVERNMENTAL This category includes revenue received from other Government units other than the per capita distributions from the State of Washington. The 2014 budget of $1,353,851 is down ($24,953) or (1.8%) from the 2013 estimate largely due to the cancellation of the Yakima Housing Authority support for a police presence at their facilities, and a one-time planning grant in 2013. LICENSES AND PERMITS The 2014 budget is $769,200, (1.4%) or ($10,800) less than the 2013 year-end estimate of $780,000. The decrease is primarily because of a spike in right -or -way use permit revenue in 2013, which is not expected to repeat in 2014. The estimates related to building revenues are estimated to be flat in response to challenges currently being faced in the building industry. 12 — Section II • General Government Funds REVENUE TRENDS - OVERVIEW Total General Government revenue remained flat from 2008 through 2011. Revenues grew by about $4 million in 2012, about half of that increase resulted from the increased utility tax for Public Safety. For 2013 the estimated revenue of $63.1 million shows a growth of 2.4% -- a modest increase resulting from the property tax calculation, a continuation of a rebound in sales tax, and growth in utility taxes. Projected revenue for 2014 is $66.1 million, a 4.9% increase - mainly due to an upturn in sales tax, the statutory property tax increase, and new revenue in the General Fund (i.e. the Cable TV utility tax redirected from debt service; Engineering services; a move of the Electronics function; and a new street break program). GENERAL GOVERNMENT RESOURCE COMPARISON - BY FUND GENERAL GOVERNMENT THREE YEAR RESOURCE COMPARISON (1) General Fund General Fund Beg Balance Total General Fund 2013 2013 2014 2012 Year -End vs. 2014 vs. Actual Estimated 2012 Budgeted 2013 Resources Resources % Change Resources % Change $52,077,679 $53,494,980 2.7% $57,181,843 6.9% 8,440,130 9,182,140 8.8% 9,245,322 0.7% 60,517,809 62,677,120 3.6% 66,427,165 6.0% Parks & Recreation 4,210,889 4,346,215 3.2% 4,357,215 0.3% Parks Beg Balance 293,800 460,790 56.8% 678,057 47.2% Total Parks 4,504,689 4,807,005 6.7% 5,035,272 4.7% Street & Traffic Fund Revenue Street & Traffic Beg Balance Total Street & Traffic 5,291,678 5,230,123 (1.2%) 4,596,360 (12.1%) 1,211,290 1,265,164 4.4% 1,159,848 (8.3%) 6,502,968 6,495,287 (0.1%) 5,756,208 (11.4%) Total Revenue 61,580,247 63,071,318 2.4% 66,135,418 4.9% Total Beg Bal 9,945,220 10,908,094 9.7% 11,083,227 1.6% Total General Government $71,525,467 $73,979,412 3.4% $77,218,645 4.4% (1) Resources include both annual revenues and beginning fund cash balances. General Government Funds • Section II —13 GENERAL GOVERNMENT RESOURCES BY MAJOR CATEGORY 2013 2013 2014 2014 2011 2012 Amended Year -End Forecast % Change Actual Actual Budget Estimate Budget f/ 2012 Est. 1 2 3 4 5 4-5 General Fund Utility Tax $11,499,662 $14,372,866 $14,480,000 $14,500,000 $15,276,500 5.4% Retail Sales and Use Tax 12,590,563 13,494,843 14,000,000 14,100,000 14,820,000 5.1% Property Tax 9,595,175 9,935,939 10,016,000 10,125,000 11,178,000 10.4% Charges for Service 5,343,249 4,676,966 5,195,480 5,063,606 5,806,614 14.7% Criminal Justice Sales Tax 2,612,126 2,497,008 2,747,000 2,747,000 2,970,000 8.1% Intergovernmental Revenue 2,553,306 2,862,186 2,670,719 2,751,719 2,882,551 4.8% Fines and Forfeitures 1,569,946 1,512,477 1,555,000 1,613,000 1,670,000 3.5% Other Taxes 1,388,253 1,386,334 1,396,500 1,416,500 1,420,500 0.3% Licenses and Permits 842,272 892,282 731,700 780,000 769,200 (1.4%) Miscellaneous Revenue 305,493 350,633 290,850 303,155 332,478 9.7% Franchise Fees 44,569 56,145 50,000 55,000 56,000 1.8% Transfers From Other Funds 40,000 40,000 40,000 40,000 0 (100.0%) Total Revenue $48,384,614 $52,077,679 $53,173,249 $53,494,980 $57,181,843 6.9% Beginning Fund Balance 8,040,189 8,440,130 9,182,140 9,182,140 9,245,322 0.7% Total General Fund $56,424,803 $60,517,809 $62,355,389 $62,677,120 $66,427,165 6.0% Parks & Recreation Fund Property Tax $1,725,983 $1,683,000 $1,457,000 $1,812,000 $1,649,000 (9.0%) Transfers From Other Funds 1,093,438 1,433,150 1,275,000 1,350,000 1,360,000 0.7% Charges for Services 907,145 783,038 967,965 821,415 985,415 20.0% Misc. Revenue/Non-Revenue 246,260 222,686 236,800 215,800 215,800 0.0% Intergovernmental 85,374 81,847 92,000 92,000 92,000 0.0% Other Financing Sources 47,910 7,168 55,000 55,000 55,000 0.0% Total Revenue $4,106,110 $4,210,889 $4,083,765 $4,346,215 $4,357,215 0.3% Beginning Fund Balance 385,681 296,800 460,790 460,790 678,057 47.2% Total Parks & Recreation Fund $4,491,791 $4,507,689 $4,544,555 $4,807,005 $5,035,272 4.7% Street and Traffic Operations Fund Property Tax $3,524,307 $3,716,000 $3,856,000 $3,671,000 $3,072,000 (16.3%) Fuel Tax - Street 1,289,527 1,275,733 1,293,000 1,293,700 1,297,600 0.3% Charges for Services 215,478 204,899 215,760 218,460 215,760 (1.2%) Miscellaneous Revenue 13,661 30,934 19,000 29,063 9,000 (69.0%) Other Financing Sources 855 24,738 27,000 2,000 2,000 0.0% Other Intergovernmental 47,725 603 500 15,500 500 (96.8%) County Road Tax/Annexations 217 463 0 400 0 (100.0%) Transfers From Other Funds 40,000 38,308 0 0 0 n/a Total Revenue $5,131,770 $5,291,678 $5,411,260 $5,230,123 $4,596,860 (12.1%) Beginning Fund Balance 1,285,030 1,211,290 1,265,164 1,265,164 1,159,848 (8.3%) Total Street & Traffic Ops. Fund $6,416,800 $6,502,968 $6,676,424 $6,495,287 $5,756,708 (11.4%) Total General Government $67,333,394 $71,528,467 $73,576,368 $73,979,412 $77,219,145 4.4% Total Revenue $57,622,494 $61,580,247 $62,668,274 $63,071,318 $66,135,918 4.9% Total Beginning Fund Balance 9,710,900 9,948,220 10,908,094 10,908,094 11,083,227 1.6% Total Resources $67,333,394 $71,528,467 $73,576,368 $73,979,412 $77,219,145 4.4% 14 - Section II • General Government Funds GENERAL GOVERNMENT FUNDS: EXPENDITURE TRENDS Criminal justice costs continue to consume an ever increasing share of total General Fund resources. In order to pay these costs other General Fund programs are necessarily limited/reduced to remain within available resources. See Exhibit III for more information. The following charts depict the major effect on the General Fund of the increase in criminal justice costs compared to all other cost increases from 2004 to 2014. PERCENTAGE INCREASE OF CRIMINAL JUSTICE COSTS VS. OTHER GENERAL GOVERNMENT FUNCTIONS AND CPI 2005 BUDGET TO 2014 BUDGET Criminal Justice Other Consumer Price Index 4r 4r 4r 4r 4r 4r 4r 4r 4r 4r 4r 4r 4r 4r 4r 4r 4r $11 37,035 59.2% $3,295,604 21.1% 25.5% Cumulatively, over the past ten years Criminal Justice budgets have increased 59.1%. By comparison, all other General Government expenses have increased by only 21.1%. During this same ten-year period the Seattle -Tacoma Consumer Price Index increased by 25.5%. Criminal justice cost increases are more than double what increases are for other cost categories. When the increase in population and boundaries are considered over this same time frame, the fact that other services are still below the rate of inflation demonstrates a real reduction in service/costs per capita. CRIMINAL JUSTICE FUNDING With the flattening of revenues, funding available for criminal justice needs is insufficient to offset increases in Criminal Justice costs. (The following chart depicts the growth in Law and Justice operations costs for 2012, 2013 estimate and 2014 budget). Even with the negotiated reduction in outside jail costs, this category of expense still increased by $88,683. General Government Funds • Section II —15 CRIMINAL JUSTICE EXPENDITURES THREE YEAR COMPARISON Change 2012 2013 2014 2014 from Description Actual YE Estimate Forecast 2013 Police Operations & Administration $20,495,568 $21,329,962 $22,480,203 5.4% Outside/Inside Jail Costs 3,974,664 3,830,560 3,577,384 (6.6%) District Court/Municipal Court & Probation 1,173,262 1,345,450 1,344,118 (0.1%) Prosecution Costs/Indigent Defense 1,224,951 1,439,527 1,526,076 6.0% Other Related Expenses Police Pension 1,264,681 1,345,925 1,343,325 (0.2%) Emergency Dispatch Transfer 370,000 410,000 305,000 (25.6%) Transfer -Law & Justice Center (1) 190,242 177,000 190,000 7.3% Sub -total 1,824,922 1,932,925 1,838,325 (4.9%) Grand Total $28,693,367 $29,878,424 $30,766,107 3.0% (1) Utility Tax transfer from General Fund. In the 2 years from 2012 to 2014, criminal justice expenditures are estimated to increase by $2.6 million or 9.0%, keeping in line with the City Council's strategic priority to improve Public Safety. In reviewing the following chart and graph, it should be noted that it includes only General Fund expenditures on criminal justice. Another $0.5 million is budgeted in the "Police Grants" special revenue fund, which includes a portion of Police and Legal staff working with the DEA on drug enforcement. The Law and Justice Capital Fund includes a budget of $0.8 million. The Criminal Justice Expenditures as a Percentage of Total General Fund chart below demonstrates that over half of General Fund's budget is dedicated to criminal justice. Note: The large jump in the percentage in 2007 was the result of Council's adoption of the Safe Community Action Plan, which allocated a one-time gain in the property tax levy as a result of the library annexation of about $650,000 to fund additional Police officers in a dedicated proactive anticrime unit. This ratio keeps spreading as Criminal Justice has received increased allocations of resources to address the gang issues facing the City. In 2012, Council approved an increase of 6.0% in the tax rate for city owned utilities (Wastewater, Water, Refuse and Stormwater) which added about $2.2 million in 2013 growing to about $2.4 million in 2014. This additional tax was earmarked to save 6 police officer positions from elimination and add 6 more officers, along with other public safety related programs. The 2013 budget included a phased proposal to expand the gang unit by 2 officers, and to add an officer to participate in the Violent Offenders Task Force. Also affecting the 2013 budget is the Washington Supreme Court decision setting new rules for indigent defense. This one mandate added $0.2 million in 2013 and is expected to add almost $0.5 million annually by the end of 2015 - the first year of full implementation. 16 - Section II • General Government Funds CRIMINAL JUSTICE EXPENDITURES AS A PERCENTAGE OF TOTAL GENERAL FUND 60.0% 56.0% 52.0% 48.0% 44.0% 40.0% rll//O///O//O//////////ill U" 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Actual Actual Actual Actual Actual Actual Actual Actual YE Est. Budget Criminal Justice 4649, <AilOther PERCENT OF PER CAPITA TOTAL REVENUE SPENT ON CRIMINAL JUSTICE IN 2012 (1) Comparable Cities between 45,000 and 125,000 in Population 30.0% 25.0% 20.0 15.0% 10.0% 5.0% 0.0% Richland Redmond Bellevue Auburn The percentage of Yakima's total revenue spent on criminal justice is 21.0%, which is 4.2% more than the average percentage of 16.8 10.2% 13.8 14.4 Y. 14.9% 15.0% 15.4% 15.9% 19.9% 178°., mtlldtrtJt[rtJW' ,. '111111 Illlll111111 21.3 21.4% l%7(,(iF% 22.1 hill II Kent Everett Renton Kirkland Yakima Pasco KennewickMarysville (1) Data compiled from the State Auditor's Local Government Comparative Statistics. General Government Funds • Section II —17 The following chart depicts General government staffing levels per 1,000 population. 6.2 6.0 5.8 5.6 5.4 5.2 5.0 4.8 4.6 GENERAL GOVERNMENT BUDGETED POSITIONS COMPARISONS (1) FOR THE LAST TEN YEARS ,d1111 1111 %%%%%%%%%%%% w 1'l 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Number of Employees 462.3 471.1 476.7 497.3 502.8 501.6 489.6 475.1 473.17 471.2 Employees Per Capita 5.8 5.8 5.8 5.9 6.0 5.9 5.4 5.2 5.1 5.1 Square Miles 24.2 25.3 25.9 25.9 27.6 28.7 28.7 28.7 28.7 28.7 Population 79,480 81,470 82,867 83,646 83,731 84,850 91,067 91,630 91,930 92,620 (1) Does not include temporary employees (numbers of employees are stated in full-time equivalents). The following major events that have had significant effect on General Government staffing levels: ➢ City population has increased 13,140 from 2004 to 2013, or 16.5% ➢ In 2005, 12.75 FTE's in Police, Courts and legal were added as a result of voter approval of a 0.3% increase in the sales tax rate for Criminal Justice. ➢ In 2007, 9 positions were added in the Police Department as part of the Safe Community Action Plan (SCAP), paid for by the increase in property tax realized when the City annexed to the Rural Library District, 4 positions were added because of Public Safety grants, and 7 were added for 2 annexation areas. ➢ In 2010, 7 Police Officers were added, funded by a COPS hiring grant, and 2 positions were added for the purchasing consolidation with Yakima County. ➢ In 2012, 6 Police Officers were added, funded by an increase in the City -owned utilities. It should be noted that a net of 8.87 new FTE positions have been added since 2004, or 1.9% over the past 10 years; compared to the 16.5% increase in population during the same time period. Most of these additions were either in response to criminal justice issues, annexations, or both. This comparison also highlights the large reductions necessitated by the economic downturn starting in 2009 and continuing into 2013. Since 2009, staffing levels have been reduced by another 30.4 net positions. This reduced the ratio to 5.1 employees per 1,000 population in 2012 and 2013 - the lowest rate in well over two decades. 18 - Section II • General Government Funds GENERAL GOVERNMENT EXPENDITURE SUMMARY The following chart illustrates that the total 2014 General Government budget is $66,135,312, $2,458,093or 3.9% more than the 2013 amended budget of $63,677,219. 2013 - 2014 GENERAL GOVERNMENT BUDGET General Parks & Recreation Street & Traffic Operations Total General Government 2013 Amended Budget $54,053,971 4,132,425 5,490,823 2013 Est. Year -End Expenditures $53,431,799 4,128,949 5,335,438 $63,677,219 $62,896,186 2014 Projected Budget $56,936,455 4,412,448 4,786,409 $66,135,312 2014 vs. 2013 Preliminary Amended Dollars Percent 5.3% 6.8% (12.8%) $2,882,484 280,023 (704,414) $2,458,093 3.9% General Government Funds • Section II —19 20 — Section II • General Government Funds OTHER FUNDS 2013 year-end estimates for the City's Other Operating and Enterprise Funds are summarized below: BUDGET STATUS 2013 2013 2013 2013 Amended Est. Actual Estimated Est. Ending Budget Expenditures Variance Resources Balance Economic Development $277,332 $277,332 $0 $504,636 $227,304 Neighborhood Development (Housing) 2,564,724 2,415,534 149,190 2,641,367 225,833 Community Relations 922,855 918,800 4,055 1,454,472 535,672 Cemetery 267,327 267,287 40 307,169 39,882 Emergency Services 1,189,923 1,189,923 0 1,324,008 134,085 Public Safety Communications 3,520,154 3,441,871 78,283 3,759,600 317,729 Police Grants 708,078 835,439 (127,361) 1,264,318 428,879 Downtown Improvement District 287,522 287,522 0 318,826 31,304 Trolley (Yakima Interurban Lines) 77,246 24,568 52,678 32,604 8,036 Front Street Business Improvement 5,000 5,000 0 11,785 6,785 Tourist Promotion 1,460,299 1,460,299 0 1,894,858 434,559 Capitol Theatre 348,300 344,730 3,570 402,910 58,180 Public Facilities Dist Rev Cony Ctr 684,000 684,000 0 929,335 245,335 Tourist Promotion Area 667,000 667,000 0 745,685 78,685 Public Facilities Dist Rev Cap Theatre 517,000 517,000 0 613,837 96,837 Airport Operating 1,081,788 997,451 84,337 1,084,953 87,502 Stormwater Operating 2,087,622 2,080,778 6,844 3,530,147 1,449,369 Transit 8,042,762 7,995,954 46,808 9,463,726 1,467,772 Refuse 5,654,199 5,652,596 1,603 6,013,361 360,765 Wastewater 19,525,178 19,422,519 102,659 21,328,901 1,906,382 Water 8,546,883 8,273,043 273,840 10,679,620 2,406,577 Irrigation 1,509,163 1,509,073 90 2,428,215 919,142 Equipment Rental 5,978,336 5,975,598 2,738 10,070,909 4,095,311 Environmental 192,950 192,950 0 588,798 395,848 Public Works Admin. 1,202,645 1,197,546 5,099 1,621,656 424,110 $67,318,286 $66,633,813 $684,473 $83,015,696 $16,381,883 All Operating and Enterprise Funds are anticipated to end 2013 with positive fund balances. This analysis includes appropriations approved by Council through October. The Police Grants fund is estimated to exceed its current budget. The expenditures were budgeted based on conservative revenue estimates relating to DEA forfeitures. The revenue is exceeding estimates, and we are preparing an appropriation for Council for additional staffing/overtime and equipment to be supported by this fund. All other operating funds are anticipating actual expenditures within authorized levels. 2014 projections for Other Operating and Enterprise Funds expenditures and resources are reflected in the following chart. (Resources include the beginning fund balance plus current year revenue, to arrive at a total available to spend.) Other Funds • Section III -1 PROPOSED 2014 BUDGET 2014 2014 2014 Projected Projected Projected Fund Resources Expense Balance Economic Development $485,304 $456,622 $28,682 Neighborhood Development (Housing) 1,989,996 1,766,938 223,058 Community Relations 1,087,272 601,850 485,422 Cemetery 304,832 278,900 25,932 Emergency Services 1,471,111 1,339,282 131,829 Public Safety Communications 3,337,666 3,218,239 119,427 Police Grants 912,879 469,024 443,855 Downtown Improvement District 266,474 244,358 22,116 Trolley 62,962 57,809 5,153 Front Street Business Improvement Area 10,120 9,000 1,120 Tourist Promotion 1,982,809 1,483,667 499,142 Capitol Theatre 355,430 342,020 13,410 Public Facilities Dist Rev Cony Ctr 1,001,085 645,000 356,085 Tourist Promotion Area 765,685 687,000 78,685 Public Facilities Dist Capitol Theatre 672,337 531,000 141,337 Airport Operating 1,081,127 1,037,370 43,757 Stormwater Operating 3,614,369 2,325,519 1,288,850 Transit 9,128,689 8,240,033 888,656 Refuse 5,946,765 5,670,633 276,132 Wastewater 21,864,739 20,213,432 1,651,307 Water 10,404,077 9,022,649 1,381,428 Irrigation 2,685,242 2,063,884 621,358 Equipment Rental 9,415,022 5,671,800 3,743,222 Environmental 545,848 192,950 352,898 Public Works Administration 1,539,548 1,168,866 370,682 Total Other Operating and Enterprise Funds $80,931,388 $67,737,845 $13,193,543 See Exhibit I for additional detail of Other Operating and Enterprise Funds, including a 3 -year history of expenses, and a fund balance analysis, including the estimated beginning and ending fund balances, and projected revenue. The 2014 Operating and Reserve Funds chart at the end of Section I depicts a summary of resources and expenditures for major operating and Utility fund operations for 2014, including contingency, operating reserve funds and employee benefit funds. Although Equipment Rental is included on the table, it is split into an operating component and capital component for charting operating vs. capital budgets. OPERATING FUNDS For more information on strategic initiatives that affect these funds see the Strategic Initiatives section. The Economic Development Fund This fund reflects resources of $485,304 and expenditures of $456,622 for 2014. These funds are planned to be used to spur economic development. Expenditures include an allocation of the Code Enforcement program that is eligible to be funded by the Community Development Block Grant (CDBG) 2 - Section III • Other Funds ($172,800); the continuation of Federal legislative funding efforts ($72,000); the City's partnership with New Vision ($33,000); and the next steps in the downtown revitalization initiative ($170,000). The Community Development Fund (Office of Neighborhood Development Services - ONDS) This fund contains programs funded by Housing and Urban Development (HUD), including the Community Development Block Grant (CDBG) and Home ownership (HOME) grants. Expenditures are budgeted at $1,766,938 and are subject to the public hearing process. After reductions in Budget allocations at the Federal level in both 2012 and 2013, the 2014 allocation has stabilized. Because of the programmatic nature of the Community Development budget, along with differences in reporting time frame for Federal programs, the City budget is annually adjusted to reflect the final outcome of prior year programs. The 2014 ending balance is projected to be $223,058. The Community Relations Fund The Community Relations fund expects resources of $1,087,272 for 2014. Expenditures are estimated to be $601,850, leaving the balance estimated at $485,422 for year-end, earmarked primarily for capital expenditure on production equipment/cable TV facilities. Cemetery Fund Resources within this fund for 2014 are projected at $304,832. Expenditures are estimated to be $278,900, and the estimated ending balance is projected at $25,932. The Cemetery Fund is depending on a $120,000 operational subsidy from the Parks and Recreation Fund, which is a $30,000 increase from the 2013 budget of $90,000, as operating revenue is not keeping pace with operating costs. Parks management continues to monitor this situation. The Emergency Services Fund Resources in this fund reflect revenues of $1,471,111 and expenditures of $1,339,282 related to the provision of Emergency Medical Services, and are supported by an allocation of the county -wide special EMS Property Tax Levy. The City's allocation increased by $120,000 from 2013—the strategic initiative to add a new Training Lieutenant is included in this fund. The 2014 ending balance is projected to be $131,829. The Public Safety Communications Fund This fund expects resources of $3,337,666 and expenditures of $3,218,239 for 2014, leaving a balance of $119,427 at year-end. This fund accounts for 9-1-1 Call takers, supported by Yakima County 9-1- 1 resources in the amount of $1,786,262. General Fund expenditures include a transfer of $610,000 for dispatch. Two strategic initiatives affect this fund -1) a reorganization that splits the combined Information Technology/Communications manager back into 2 separate positions, and moves the electronics operation (both revenues and expenditures) into IT; and 2) the beginning of a move to a larger facility --$195,000 is new in the 2014 budget as an estimate for the 1st year of debt service for remodeling/equipping a new public safety communications center. Police Grants This fund accounts for the Federal / State forfeited narcotics and the COPS Hiring Recovery Program (CHRP), both of which have stringent reporting requirements. CHRP was a three year program grant started in 2010 with a total grant of $1.5 million and was being used to fund seven police officers. As grant funding was depleted, the officers were absorbed back into General Fund. The program is complete the end of 2013, so in 2014 the balance of staff (about $295,000) was Other Funds • Section III — 3 redirected into General Fund. Resources for 2014 are estimated to be $912,879 and expenditures are budgeted at $469,024, leaving an ending balance of $443,855. Downtown Yakima Business Improvement District (DYBID) Fund Resources in this fund are projected to be $266,474, while expenditures are projected at $244,358. The ending balance for 2014 is projected at $22,116. Much of the 2014 budget is targeted toward maintaining the recent downtown revitalization efforts. The Trolley Fund This fund projects resources of $62,962 and expenditures of $57,809 for a minimal maintenance program in 2014. The year-end balance is projected at $5,153. The Front Street Business Improvement Area Fund This fund projects resources of $10,120 and expenditures of $9,000 - leaving an ending balance of $1,120 for 2014. The Tourism Promotion/Yakima Convention Center Fund This fund's budget anticipates resources of $1,982,809 (this includes a transfer of $100,000 from the Public Facility District) and expenditures of $1,483,667, and thus is expected to end 2014 with a balance of $499,142. The budget includes an increase the Center's management fee from $694,300 to $708,200 or $13,900, and an increase in the maintenance of the Visitors Information Center from $40,000 to $60,000 or $20,000 (See strategic initiative section). The Capitol Theatre Fund This fund is expected to have resources of $355,430 and expenditures of $342,020, leaving an estimated ending balance of $13,410. The Capitol Theatre Committee management fee is unchanged at $232,000. The Public Facilities District - Convention Center Fund This fund includes resources estimated to be $1,001,085 for 2014. Expenditures are estimated to be $645,000. Of this amount $455,000 for debt service on the Convention Center bonds issued in 2002 and $100,000 is for supplemental support of Convention Center operations, while $70,000 is for Convention Center Capital Fund. This leaves a fund balance of $356,085 at the end of 2014. The Tourist Promotion Area This fund accounts for a self-assessment imposed by the lodging industry to promote tourism. Resources are estimated to be $765,685, with expenditures programmed at $687,000, leaving a balance at the end of 2014 of $78,685. The Public Facilities District - Capitol Theatre This fund includes resources estimated to be $672,337 for 2014. Expenditures are estimated to be $531,000. Of this amount $462,000 is designated for debt service on the Capitol Expansion bond issued in 2009 and $57,000 for supplemental support for Capitol Theatre operations. It should be noted that the Federal Government reduced the amount it is providing for the Buy America Bond program, so the City's contribution to debt service had to go up by almost $10,000. This leaves a fund balance of $141,337 at the end of 2014. 4 - Section III • Other Funds Airport Operating Fund This is a new fund to account for operations at the Yakima Air Terminal, after the joint venture with Yakima County was dissolved in February, 2013. Resources are estimated to be $1,081,127, with expenditures programmed at $1,037,370, leaving a balance at the end of 2014 of $43,757 After transferring to City ownership, cost containment measures have been taken to stabilize the financial position. The budget includes a strategic initiative to start upgrades at the terminal including carpeting and paint. Stormwater Operating Fund Expenditures in this fund are estimated to be $2,325,519 and resources are projected to be $3,614,369 for 2014. The budget is developed with the annual current rate of $43 per equivalent residential unit which is unchanged from 2013. An ending balance of $1,288,850 is currently projected for 2014. The expenditure budget includes a $200,000 transfer to the streets fund to support the street sweeping program and $50,000 to the General Fund for code compliance support relating to stormwater drainage systems. There is also $70,000 budgeted for a rate study (see Strategic Initiative section). Transit Fund Expenditures in this fund are estimated to be $8,240,033 and resources are projected to be $9,128,689 for 2014. Total Transit sales taxes for 2014 are forecast to be $4,900,000 with the $4.0 million allocated to operations and $0.9 million to capital. This fund also includes an operating grant of $2,200,000. Strategic initiatives include adding 2 permanent part-time Department Assistant II's, and increasing the hours of the Transit Cleaners, to enhance customer service. An ending balance of $888,656 is currently projected for 2014. Refuse Fund The expenditure budget in this fund for 2014 is $5,946,765. Total resources are estimated to be $5,670,633, and an ending balance is currently projected at $276,132. No rate adjustments are proposed for 2014. A recycling pilot program is included in this budget with a preliminary estimate of $40,000 (see the strategic initiative section). Additional revenue is being provided by new customers as the City begins service in a previously annexed area. Wastewater Fund Resources for this fund in 2014 are expected to total $21,864,739. Expenditures are budgeted at $20,213,432 and the 2014 year-end balance is currently projected to be $1,651,307. Transfers of about $2.5 million to Wastewater Construction funds and $2.6 million to provide for Wastewater Bond redemption and repayments of Public Works Trust Fund Loans are currently programmed in this budget. The proposed 2014 Sewer budget includes continued implementation of the Sewer Comprehensive Plan and the Wastewater Facilities Plan. Revenues are estimated to increase by 5.1% in accordance with the third year of a three year rate structure approved by Council in 2011. Water Fund Resources of $10,404,077 are projected for 2014 in this fund. Expenditures are estimated to be $9,022,649 leaving $1,381,428 at the end of 2014. These costs include $750,000 transfer to the Capital Fund, and about $1,100,000 to provide for Water Bond Debt Service, and repayments of Water Public Works Trust Fund Loans. No rate adjustments are included in the 2014 budget. A rate study is about complete, and the results will be presented to Council at a future date. Other Funds • Section III — 5 Irrigation Fund Resources for 2014 are projected to be $2,685,242 in this fund, and expenditures are estimated to be $2,063,884. The 2014 ending fund balance is projected to be $621,358. The 2014 projected resources include the rate adjustment of 5.5% rate increase (2011 approved policy issue - 5.5% annual rate increase from 2011 through 2013.) The Equipment Rental Fund The budget for this fund in 2014 is $5,671,800 of which $3.9 million is the maintenance and operations budget, and $1.7 million is the Equipment Replacement budget. Resources are expected to be $9,415,022 while the ending fund balance for 2014 is expected to be $3,743,222, most of which represents capital equipment replacement reserves. The Environmental Fund This fund was created to provide for cleanup of environmental hazards. Funding for the program is from a surcharge on vehicle fuel sales in the Equipment Rental Fund. For 2014, $545,848 in resources is expected to be available and $192,950 is budgeted primarily as a contingency. A year- end balance of $352,898 is projected. Public Works Administration Fund Expenditures for 2014 are expected to be $1,168,866 for this fund. Resources for 2014 are expected to be $1,539,548 generated from operating funds located in the Public Works complex, resulting in a year-end balance of $370,682. RESERVE FUNDS - EMPLOYEE BENEFIT RESERVES The Unemployment Compensation Reserve Fund This self insured fund is estimated to end 2014 with a balance of $267,577. Resources are projected to be $554,159 and expenditures for claims and other related expenses are estimated at $286,582, which includes a contingency, as the 2013 year end estimate is only $158,789. Rates are unchanged for 2014. Employees Health Benefit Reserve Fund Expenditures in this fund for 2014 are projected to be $9,867,703, while resources are $12,937,613, leaving an ending balance projected to be $3,069,910, which exceeds the State's minimum reserve and contingency requirements by about $700,000. The 2014 budget includes a rate roll -back of an average of 15% for medical while dental was flat, based on an 18 month rolling average of claims history ending in June 2013. Recent plan design changes combined with a better than average "large claim" year and the opening of our own medical clinic all combined to produce this reduction in expenditures and the resulting reduction in base rates. The insurance board continues to monitor the plan and review potential cost containment measures, with a goal of reducing the magnitude of future annual premium increases. The next major proposal for reduced costs is to begin an incentivized wellness program, which is being introduced this fall (2013). The Workers Compensation Reserve Fund This fund is estimating a year-end balance of $802,634, the result of resources totaling $2,061,264 and expenditures of $1,258,630. Ongoing efforts in claim management and safety training are in place to slowdown the number of claims/costs. Rates are unchanged for 2014. 6 - Section III • Other Funds Wellness/Employee Assistance Program (EAP) Fund Projected total resources for 2014 are $356,238 in this fund, and expenditures are $171,600 with a projected year-end balance of $184,638. The Firemen's Relief and Pension Fund This fund is projecting resources of $2,181,849 and expenditures of $1,259,308, leaving an estimated 2014 year-end balance of $922,541. The Fire Pension property tax allocation for 2014 of $1,186,000 is slightly below the 2013 estimate of $1,192,000. The City is mandated to allocate property tax to fund pension and LEOFF I medical and long-term care requirements. OPERATING RESERVES Risk Management Reserve For 2014, based on personnel costs, claims experience and other insurance/professional services costs, on-going expenditures are estimated to be $3,299,649 Risk Management Fund departmental contributions totaling $3,180,000 are programmed from City departments, an increase of 7.0 % for most operating divisions. The increase helps pay for liability and other insurance coverage and increased claims costs, and to meet reserve requirements. These charges, along with interest earnings of $100,000 and estimated recoveries combine for projected 2014 revenues of $3,360,000 for normal operations. In addition to on-going operations, the 2014 revenues and expenditures include $70,000 for anticipated possible mitigation of contamination from the former City landfill at the sawmill site. At this time, mitigation expenses are anticipated to be reimbursed by corresponding insurance recovery revenue. Therefore, total resources and expenditures of the Risk Management Reserve Fund for 2014 are expected to be $4,304,666 and $3,299,649 respectively. The year-end 2014 reserve balance is estimated to be $1,005,017. These reserve levels are still considered marginal in comparison to the existing liability for incurred claims. The reserve balance in this fund will continue to be monitored for adequacy. Capitol Theatre Reserve The Capitol Theatre Reserve projects revenues for 2014 of $500. The annual transfer of $71,927 to the Capitol Theatre is being changed from the Operating Fund to the Construction fund for both the balance of 2013 and 2014 so much needed safety/ADA improvements can be made. The projected 2014 ending balance is $109,068, and will be totally depleted after 1 more year. The City is pursuing funding alternatives for capital improvements with the Capitol Theatre Committee. General Fund Cash Flow Reserve General Fund cash flow reserves for 2014 are estimated at $9,490,707. This source is a contingency for Council policy changes, results of negotiations for unsettled bargaining units, other unknown expenses and potential revenue shortfalls. Other Funds • Section III - 7 In summation, the City's 2014 General Reserve position is estimated to be as shown in the following chart. 2014 GENERAL RESERVE POSITION 2012 2013 2014 Fund Actual Estimated Projected General Fund Cash Flow $9,182,140 $9,245,320 $9,490,707 Capitol Theatre Reserve 251,922 180,495 109,068 Risk Management Reserve 1,030,191 944,666 1,005,017 Total $10,464,253 $10,370,481 $10,604,792 The economic downturn has put pressure on the general reserves of the City. Because these reserves are at minimum levels, they will be scrutinized for negative trends and adequacy as the City moves forward. Exhibit I contains additional detail of funds categorized as Contingency/Operating and Employee Benefit Reserves. CAPITAL IMPROVEMENT FUNDS For 2013, a number of capital improvements were programmed for an amended capital budget of $64.2 million. However, capital improvement expenditures for 2013 were estimated to be $52.2 million, a spending level approximately $12.0 million below budgeted levels. These projects are rebudgeted in 2014 along with additional capital improvements. Examples of the projects being rebudgeted include the Yakima Sawmill Redevelopment Area; Railroad Grade Separation; 64th Avenue Nob Hill to Tieton reconstruction; Congdon wastewater main; and Biogas Enhancements; Biosolids Improvement. (See Exhibit 1 for a summary of the status of the capital funds.) The 2014 Capital and Debt Service Funds chart at the end of Section I depicts a summary of 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. For 2014, Capital Fund expenditures of $64,889,845 are estimated as follows, inclusive of carryover projects from 2013. Street/Other Infrastructure Improvement Proj ects Total projects of $28,060,126 million (including carryover projects and Debt Service). ➢ Street Improvements per City Charter amendment (General Obligation Bond) - $16,500,000 ➢ 64th Avenue , Nob Hill to Tieton Street Improvement (carryover, Federal grant) - $925,000 ➢ Lincoln Corridor Study (Federal Grant) - $415,000 ➢ 1st/Main Nob Hill Corridor (Federal Grant) - $375,000 ➢ City Streets Project Improvement (General Obligation bond, carryover from 2013) - $940,000 ➢ Railroad Grade Separation (State and Federal grants; Public Works Trust Fund loan) - $4,898,000 ➢ North 1st St. Revitalization Phase I (Federal Grant) - $1,200,000 ➢ Debt Service/Transfers - $1,309,876 8 — Section III • Other Funds ➢ Other miscellaneous projects — $1,497,250. These projects include: • Project Contingency (for project over runs or emergency repairs) — $105,000 • Citywide Safety Improvements (Federal Grant) — $275,000 • Citywide Street & Right -of -Way Project — $225,000 • River Road Project 16th Ave/Fruitvale — $218,850 • 64th & Tieton Signal — $140,000 Arterial Street Gas tax and the Real Estate Excise Taxes are the primary local revenue sources for street projects. These revenues are used to match state and federal grants when possible to maximize funding for projects. Irrigation Improvement Fund Total 2014 projects — $1,300,000 and Debt Service - $321,504, for a total of $1,621,504. ➢ Fruitvale Canal Diversion System — $100,000 ➢ West Yakima Avenue (18th to 28th) — $1,000,000 ➢ 2014 Main and Pump Refurbish — $200,000 Domestic Water Improvement Fund Total 2014 projects — $4,320,000. ➢ Design Water Treatment Lagoons (carryover) — $2,100,000 (funded by Public Works Trust Fund Loan) ➢ Automated Meter Reading System (carryover) — $500,000 ➢ Modifications to River at WTP Intake — $1,500,000 ➢ 2014 Water Main Replacement — $150,000 ➢ Other water capital projects — $70,000 Fire Capital Fund Total 2014 projects — $296,459. ➢ New brush truck — $130,000 ➢ Miscellaneous equipment and supplies — $96,500 ➢ Lease payments — $69,959 Wastewater Capital Expenditures Facility projects and other sewer improvements, including sewer line extension rehabilitation and other costs, total $12,975,000. ➢ Congdon Sewer Main (carry over) — $100,000 ➢ Wastewater System Evaluation — $100,000 ➢ Dry Storage Building — $100,000 ➢ New Industrial Waste Line (Force main Boise site) — $800,000 ➢ Toscana Development Castlevale/Fechter (carry over) — $300,000 ➢ Beech Street Interceptor/Phase III — $2,000,000 ➢ National Pollutant Discharge Elimination System (NPDES) and Total Maximum Daily Load (TMDL) Issues — $1,800,000 ➢ Biogas Enhancements (carry over) — $565,000 Other Funds • Section III — 9 ➢ Biosolids Improvements (carry over/additional project cost) - $4,700,000 ➢ Biosolids Screen Project - $1,100,000 ➢ Other Wastewater miscellaneous capital needs (including a $800,000 contingency) - $1,410,000 Stormwater Capital Fund Total 2014 budget - $790,000. ➢ Contingency for Capital Facilities projects - $65,000 ➢ Underground Injection Control (UIC) Retrofit project (carry over) - $125,000 (state grant) ➢ Drainage Basin Project - $600,000 Airport Capital Fund Total 2014 budget - $11,162,885. ➢ Taxiway Construction (Federal grant/interfund loan) - $11,162,885 Transit Capital The 2014 budget of $1,749,000 is for miscellaneous capital needs and vehicle replacement. ➢ 3 Heavy Duty Buses - $1,300,000 ➢ Replace Dial -a -ride vehicles - $392,000 ➢ Other capital needs - $57,000 Parks Improvements Projects The 2014 budget of $100,000 is for miscellaneous capital needs. Yakima Revenue Development Area The 2014 budget of $2,473,235 is for the Yakima Sawmill Redevelopment Area project. Other Capital Projects/Transfers ➢ Law and Justice Capital fund - $750,636 for the Police Station / Legal Center related equipment and projects including: • Vehicle replacement and accessories - $416,000 • Automated License Plate Reader - $135,000 • Miller Park Facility improvements - $100,000 • Technology and Equipment to enhance crime reduction - $51,636 (Federal grant) • Other miscellaneous projects and equipment - $48,000 ➢ Convention Center Capital Improvements - $360,000 is programmed for ongoing capital needs of the Center for 2014. ➢ CBD Capital Improvement - $91,000 for maintenance contract and other services. LID Construction There are no local improvement district projects budgeted in 2014. Capital Improvement Fund Summary Overall, Capital Fund expenditures in the 2014 Budget Forecast of $64.9 million are $0.7 million above the 2013 Amended budget of $64.2 million. Many areas are in the midst of capital programs 10 — Section III • Other Funds such as the utilities and streets (including the major upgrades to the wastewater facility, which is under construction in 2013). In some instances, the "next" phase as included in the 2014 budget is less than 2013, such as automated meter reading and the wastewater industrial waste line. Ongoing pressures on revenues available for General Government Capital funds have pushed spending down in Parks, Fire and Law & Justice. The Fire Department has requested an ongoing source of funding for apparatus replacement. Ongoing resources for capital needs have been diminishing, and this topic will likely remain in the forefront of future budget discussions. Although major capital projects in the wastewater utility and the 2"d railroad underpass on Martin Luther King Jr. Blvd. are finishing up, new capital programs tied to acquisition of the Airport and the passage of a City Charter amendment to invest $2 million annually in street improvements, along with the purchase and equipping of 74 Police vehicles, leave the 2014 budget slightly more than the 2013 amended budget. GRANTS The City has been successful in obtaining grants for many different purposes. The following table identifies all of the grants/interlocal revenues budgeted to be received in 2014. Citywide, grants add to over $33.5 million, which is about 16.0% of total revenues. This grant summary is included in the Capital Improvement section because Capital grants make up over half of the total grants awarded. Grants make up about 28.9% of revenue in the Capital Improvement funds. 2014 GRANTS (Federal, State & Interlocal Subsidies) Amount Department Description of Grant Federal/State Capital Grants Law & Justice Capital Arterial Streets Arterial Streets Arterial Streets Arterial Streets Arterial Streets Arterial Streets Trolley Cum Res for Capital Improvement Cum Res for Capital Improvement Transit Capital Airport Capital Wastewater Capital Wastewater Capital Stormwater Capital Total Federal/State Capital Grants JAG Grant Fair Ave/Nob Hill Intersection Rebuild 64th Ave. - Nob Hill to Tie ton N. 1st Street Revitalization Phase 1 Citywide Safety Improvements Lincoln Corridor Safety Project 1st/Main Nobhill Corridor Safety Project Trolley Enhancement Project Federal Highway Admin Transportation Improvement Board State Grant D/R Vehicles FAA Alpha Taxiway Construction Recreation & Conservation Department of Ecology UIC Project DOE Grant G1100273 41,636 25,900 725,000 1,038,000 275,000 415,000 375,000 53,308 2,000,000 900,000 313,507 10,054,597 1,300,000 249,900 94,000 $17,860,848 Other Funds • Section III —11 Department Federal/State Operating Grants - General Government Police Police Parks and Recreation Parks and Recreation Parks and Recreation Parks and Recreation Municipal Court General Fund Description Traffic Safety Commission OPD Public Defense Grant ALTC Reimbursement SCSA State Res Senior Center - Foot care State Day Care CFDA 93.044 State Transportation CFDA 93.043 Judicial Salary Contribution Property Taxes Total Federal/State Operating Grants - General Government Federal/State Operating Grants - Other Funds Community De velopment Community De velopment Transit Transit Transit Transit Emergency Services Total Federal/State Operating Grants - Other Funds Federal Entitlements PFD Capitol Theatre Police Total Federal Entitlements State Shared Revenue Police Police Police Police General Fund General Fund Economic Development Parks and Recreation Streets Arterial Streets Firemen Relief & Pension Total State Shared Revenue 12 — Section III • Other Funds Community Development Block Grant HUD HOME Program UMTA - Current Year per Grant Commute Trip Pass Thru WSDOT CMAQ DOT Sunday Service WA State Transit Operating Grant Department of Health - Pre -hospital Grant Amount of Grant $45,000 150,000 30,900 30,200 10,000 500 45,000 6,330 $317,930 $912,849 401,164 2,200,000 10,000 76,940 117,977 1,726 $3,720,656 Capitol Theatre - Build America Bond Subsidy $99,422 Federal Forfeited Property 100,000 Criminal Justice - High Crime Criminal Justice - Violent Criminal Justice - Special programs MVET DUI Payment Liquor Excise Tax Liquor Board Profits City Assistance Criminal Justice - Special Programs Gas Tax Arterial Street Gas Tax Fire Insurance Premium Tax $199,422 $344,000 107,000 62,800 17,000 195,000 829,500 80,000 20,400 1,297,100 606,400 72,838 $3,632,038 Amount Department Description of Grant Intergovernmental Contract / Services Police Police - Fairgrounds $10,000 Police Resource Officers 678,311 Police Selah Jail Contract 5,000 Police YPD OT Reimbursement by County 10,000 Police Violent Crimes Taxk Force 1,000 Fire Fire - EMS Levy 34,500 Fire Pe rs onne l Se rvice s -Training 5,000 Fire Fire Investigator Services 500 Fire Fire Training Programs 2,400 Fire Fire Training Services 8,000 Traffic Engineering Engineering Services 500 Purchasing Purchasing Services 259,700 Emergency Services EMS Levy 1,335,000 Public Safety Communications Fire District #10 24,000 Public Safety Communications 911 Service Contracts 1,786,262 Public Safety Communications Fire Dispatch Services 227,200 Public Safety Communications Police Dispatching Service 94,225 Public Safety Communications Information Technical Services 67,600 Public Safety Communications Union Gap Electronics 9,410 Public Facilities District Public Facilities District Revenue 755,000 PFD -Capitol Theatre Public Facilities District Capitol Theatre 575,000 YAKCORPS Intergovt IS Services 24,000 YAKCORPS YAKCORPS Assessment 610,671 Transit Selah Transit Bus 250,000 Transit Selah Transit Dial -a -Ride 50,000 Yakima County SIED Interlocal Grant 925,000 Total Intergovernmental Contract / Services $7,748,279 Total 2014 Grants and Other Subsidies $33,479,173 Other Funds • Section III —13 14 — Section III • Other Funds STRATEGIC INITIATIVES CITY ADMINISTRATION Economic Development Strategic Initiative Request / Justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Implement Downtown Retail Plan Economic Development Fund $25,000 ED Implement Downtown Master Plan Economic Development Fund $145,000 ED Enhance/Expand Downtown Events $70,000 in 2013, increased to $110,000 General Fund $40,000 ED Cascade Mill Site Project — 2014 Continue Redevelopment Project LIFT Funding $2,400,000 ED Convention Center Strategic Initiative Request / Justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Convention Center Management Fee Increase Tourist Promotion Operating Fund 170 $13,900 PA Visitor Information Center Strategic Initiative Request / Justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Increase Funding for the Visitor Information Center Tourist Promotion Operating Fund 170 $20,000 PA Capitol Theatre Strategic Initiative Request / Justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Plan and Implement Capitol Theatre Repair and Improvements (funded by Capital Transfers) Capitol Theatre Construction Fund $140,000 PA Economic Development Public Safety Built Environment Strategic Priority Legend ED Public Trust and Accountability PS Partnerships BE PT PA Strategic Initiatives • Section IV —1 Gang Free Initiative Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Gang Free Initiative: General Fund PS Add Operations Manager General Fund $88,600 Contracted Services (75,800) $237,500 Other Incidental Costs 45,000 $7,000 Total GFI 2014 — $333,100 Total General Fund ($77,000) Human Resources Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Reorganization — Eliminate net 1.4 positions PA Eliminate Deputy HR position- Total ($102,700) General Fund ($46,200) Eliminate HR Specialist —Total ($75,800) (75,800) Add 0.6 HR Assistant 45,000 Total General Fund ($77,000) Other Funds (56,500) Total ($133,500) Implement Quality Customer Service Academy General Fund $50,000 PA LEGAL Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P No 2014 Strategic Initiatives MUNICIPAL COURT Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P No 2014 Strategic Initiatives FINANCE Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P No 2014 Strategic Initiatives Economic Development Public Safety Built Environment 2 — Section IV • Strategic Initiatives Strategic Priority Legend Public Trust and Accountability Partnerships ED PS BE PT PA COMMUNITY DEVELOPMENT Code Administration Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Add 2 Code Compliance Officers - 9 months Annually: $133,300 General Fund $100,000 Revenue: $40,000 BE City Hall Improvements REET 1 Fund $64,800 $200,000 BE POLICE Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Reinstate One Parking Enforcement Officer Mostly funded by anticipated increase in parking ticket revenue. Net cost to General Fund: $16,800 General Fund $56,800 Revenue: $40,000 PS Expand Downtown Bicycle/Foot Patrol Start in March and extend through October. Overtime for 4 days/wk General Fund $64,800 PS Increase Training Program Funding Succession planning to train command staff. General Fund $75,000 PS Automated License Plate Reader Program Law and Justice Capital Fund $135,000 PS New Communications Center Construction $97,500 each fund 2014. Annually with debt service and annual lease payments: General Fund - $363,250 Yakima County 911 - $268,050 Public Safety Communication Fund: General Fund County 911 Fund 2014: $97,500 97,500 PS $195,000 Communications & Technology Reorganization Reinstate 1.0 Information Technology Manager Transfer Electronics program from Communications to IT: 3.0 Electronics positions - $293,000 Non-personnel expenses - $47,000 Total Electronics Program Transferred - $340,000 General Fund 911 Fund Citywide total Transfer from PS Comm Fund 152 to General Fund— Related Revenue $108,000 Reduced Transfer to 152 - $210,000 $100,200 42,000 PS $142,200 Economic Development Public Safety Built Environment Strategic Priority Legend Public Trust and Accountability Partnerships ED PS BE PT PA Strategic Initiatives • Section IV — 3 FIRE Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Reorganization General Fund $100,000 PS Eliminate 3.0 Battalion Chiefs General Fund Net savings — 50,000 Add 3.0 Shift Fire Captains Fund ($67,700) $150,000 Eliminate "brown -outs": Airport Capital $10,000,000 Reinstate 2.0 Firefighters Fund 163,700 BE Increase Overtime Budgets FAA Grant/Local 225,000 1,100,000 Match $321,000 $11,100,000 Increase Firefighter Training $75,000 Total Increase in General Fund -$396,000 EMS Fund: Add 1.0 Training Lieutenant EMS Fund 150 $107,900 Increase Overtime Budget 25,000 Total Increase in EMS Fund -$132,900 Purchase One Replacement Brush Truck Fire Capital $130,000 PS YAKIMA AIRPORT Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Implement Airport Marketing Plan General Fund $100,000 ED Terminal Improvements Airport Operating 50,000 Fund $150,000 Airport Taxiway/Lighting Improvements Airport Capital $10,000,000 Fund BE FAA Grant/Local 1,100,000 Match $11,100,000 Economic Development Public Safety Built Environment 4 — Section IV • Strategic Initiatives Strategic Priority Legend Public Trust and Accountability Partnerships ED PS BE PT PA UTILITIES & ENGINEERING Engineering Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Implement Right of Way/Street Cut Program Wastewater Collections Capital Fund: Wastewater Utility Revenues $100,000 BE Reinstate 1.0 Supervising Traffic Engineer General Fund $94,100 2014: $4,700,000 BE Transfer 2.0 Traffic Tech II's from Streets Collections Capital 146,400 2015: $3,200,000 Add Street Cut Charge Fund: $240,500 Revenue - $150,000 Net Program Cost- General Fund $90,500 Department of Street Fund — Transfer out 2.0 Traffic Tech II's Street Fund (146,400) Total General Govt. Net savings $55,900 Wastewater $1,500,000 BE Pedestrian and Bicycle Connectivity Plan Gas Tax/Arterial $40,000 BE Street Fund $1,800,000 Wastewater Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Complete Wastewater Collections Master Plan Wastewater Collections Capital Fund: Wastewater Utility Revenues $100,000 BE Installation of Biosolids Dryer Wastewater 2014: $4,700,000 BE State loans repaid by rates. Collections Capital 2015: $3,200,000 Fund: Total $7,900,000 Department of Ecology Loans Salmon Recover/Riparian Restoration Project Wastewater $1,500,000 BE Collections Capital 300,000 Fund: $1,800,000 Grants Utility Revenues Stormwater Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Implement Integrated Stormwater Plan Stormwater Capital $600,000 BE Economic Development Public Safety Built Environment Strategic Priority Legend Public Trust and Accountability Partnerships ED PS BE PT PA Strategic Initiatives • Section IV — 5 Stormwater/Wastewater Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Update Stormwater, Wastewater and Industrial Wastewater Rate Studies Stormwater Rates Wastewater Rates $59,500 $45,000 65,000 BE $110,000 PUBLIC WORKS Parks & Recreation Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Reinstate 1.0 Administrative Assistant Transfer .4 Associate Planner back to General Fund. With other changes, no General Fund net effect Parks and Recreation Fund $59,500 PA Streets Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Implement Phase I of North 1st Street Plan - Arterial Street Fund: $67,800 $10,000 BE to be completed over 2 years. Transit Capital Fund Local Sales Tax $1,290,000 BE Dial -A -Ride (DAR) Replacement Plan-- State Grant ($313,500) matched with Local Sales Tax ($78,500) Transit Capital Fund Grants and Local Sales Tax $392,000 BE Total Project: 2014: $2,718,000 STP Grant $1,038,000 406,000 Gas Tax 162,000 $3,124,000 $1,200,000 Road Improvements BE Improvements - New Street Capital Fund to account for Charter amendment G.O. Bonds Street Capital Fund $16,500,000 Debt Service on $16.5 million bond issue - General Fund 2,000,000 10 year payback $18,500,000 Transit Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Transit Center Staffing Changes Add 2 0.577 DA II's Add 0.3 Vehicle Cleaner -(Increase permanent part-time hours) Transit Operating Fund—Local Sales Tax $67,800 $10,000 BE Purchase 3 Heavy Duty Replacement Buses Transit Capital Fund Local Sales Tax $1,290,000 BE Dial -A -Ride (DAR) Replacement Plan-- State Grant ($313,500) matched with Local Sales Tax ($78,500) Transit Capital Fund Grants and Local Sales Tax $392,000 BE Economic Development Public Safety Built Environment 6 — Section IV • Strategic Initiatives Strategic Priority Legend Public Trust and Accountability Partnerships ED PS BE PT PA Equipment Rental Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Fleet Vehicle Additions and Replacements Equipment Rental $46,100 $1,621,000 PT Engineering Replacement Fund $45,000 PA Toyota Tacoma $27,000 Streets Ford 1 Ton Crew Cab 45,000 Front Loader 175,000 Water & Irrigation 1/2 Ton PU Ext Cab 30,000 Toro Dingo (addition) 44,000 Ford Utilimaster 100,000 Refuse Automated Sideloader 315,000 Automated Sideloader 315,000 Wastewater 1/2 Ton PU Ext Cab (addition) 40,000 For Transit Connect 40,000 For Transit Connect 40,000 Combination Sewer Cleaner 450,000 Total $1,621,000 Diesel Particulate Filter Cleaning Equipment Equipment Rental $85,000 PT Funded by operating reserves—to be repaid by funds contributing to M&O over 5 years. M&O Budget Note: possibility for grant—not yet awarded Public Works Administration Strategic Initiative Request / justification Proposed Funding Source Personnel Salary / Benefits Non -Personnel S/P Reinstate 1 Department Assistant II Shared by Funds paying PW Admin charges Public Works Admin Fund $46,100 PT Improvements to Southeast Community Center, in partnership with OIC Parks and Recreation Fund $45,000 PA Economic Development Public Safety Built Environment Strategic Priority Legend Public Trust and Accountability Partnerships ED PS BE PT PA Strategic Initiatives • Section IV — 7 CITY ADMINISTRATION / ECONOMIC DEVELOPMENT 2014 STRATEGIC INITIATIVE IMPLEMENT DOWNTOWN RETAIL PLAN BUDGETED PROPOSAL 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. Other work will include creating marketing materials that explain the direction the City is heading with the planning process, and arranging meetings with developers throughout the NW selling our downtown to future investors. IMPACTS 1. Fiscal Impact - $25,000. 2. Proposed Funding Source - Economic Development Fund. 3. Public Impact - New investment to the downtown district. 4. Personnel Impact - No additional staffing required at this time; work to be performed by Economic Development Staff and Community Partners. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - None. 8 — Section IV • Strategic Initiatives CITY ADMINISTRATION / ECONOMIC DEVELOPMENT 2014 STRATEGIC INITIATIVE IMPLEMENT DOWNTOWN MASTER PLAN BUDGETED PROPOSAL 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. IMPACTS 1. Fiscal Impact — $145,000. 2. Proposed Funding Source - Economic Development Fund. 3. Public Impact - This project will implement phase 1 of the downtown master plan as presented by Crandall Arambula. The key part of not only designing, but creating construction bid documents sends a strong signal of the City's intent of implementing the downtown master plan. 4. Personnel Impact - None, work performed by current Economic Development Staff and Community Partners. 5. Required Changes in City Regulations or Policies - As the downtown plan takes shape, design guidelines for the area will be proposed for Council approval—plans will ultimately need to be in compliance with any new development rules. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - The south plaza was the location recommended by Crandall Arambula and by an 80-1 vote at the second public session for the downtown plan. Strategic Initiatives • Section IV - 9 CITY ADMINISTRATION / ECONOMIC DEVELOPMENT 2014 STRATEGIC INITIATIVE ENHANCE / EXPAND DOWNTOWN EVENTS BUDGETED PROPOSAL 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. IMPACTS 1. Fiscal Impact - Additional $40,000. Increase budget from $70,000 in 2013 to $110,000 in 2014. 2. Proposed Funding Source - General Fund. 3. Public Impact - The public has responded well to new events and activities in the community and would enthusiastically like to see them continue. 4. Personnel Impact - None, work performed by current Economic Development Staff and Community Partners. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — None. 10 - Section IV • Strategic Initiatives CITY ADMINISTRATION / ECONOMIC DEVELOPMENT 2014 STRATEGIC INITIATIVE CASCADE MILL PROJECT - 2014 BUDGETED PROPOSAL 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 more than $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 Remedial Action Plan and 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. This evaluation will enable the City to better understand rental, occupancy, and absorption rates for various potential uses including: retail, office, hotel and institutional uses such as hospitals and educational facilities. ➢ 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. IMPACTS 1. Fiscal Impact - Total 2014 budget -- $2,473,235 i. Land purchase (if warranted for clean-up effort) $800,000 ii. Roundabout/first phase of Cascade Mill Parkway 619,914 iii. City share of East-West Corridor project 788,321 iv. City share of Interchange modification project 225,000 v. Economic Analysis 40,000 Strategic Initiatives • Section IV —11 Wood waste excavation and handling costs are under review at this time. 2. Proposed Funding Source - Yakima Redevelopment Area Fund -- 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. We anticipate our $1 million match to be provided by Right-of-way donation related to the Cascade Mill Parkway. Eligible project elements for LIFT funding and the roundabout was the subject of a TIB grant for $991,000, however, this revenue is not currently budgeted. Should the grant be awarded, an appropriation will be brought for Council approval 3. Public Impact - The public will benefit from a well-developed implementation plan which is consistent with market conditions in Yakima and will complement not compete with the efforts for downtown redevelopment. The public will experience improved access at the new roundabout and the commencement of clean-up activities at the landfill. 4. Personnel Impact - Existing staff and Lochner contract will handle these elements. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - The DOE permitting process will require support from the legal division. 7. Viable Alternatives - None. 12 — Section IV • Strategic Initiatives CITY ADMINISTRATION / CONVENTION CENTER 2014 STRATEGIC INITIATIVE CONVENTION CENTER MANAGEMENT FEE INCREASE BUDGETED PROPOSAL The Yakima Valley Visitors & Convention Bureau manages and operates the Yakima Convention Center. Over the years, operation and management costs have continued to increase. This proposal requests a $13,900 (2%) increase to the management fee. This line item includes wages for the Convention Center staff and the management fee to the Visitors and Convention Bureau (VCB). This increase will allow us to increase promotion and marketing to stimulate economic growth through convention business and tourism, while also assisting in covering increased costs of medical insurance and similar employee costs. IMPACTS 1. Fiscal Impact - $13,900 Increase—from $694,300 in 2013 to $708,200 in 2014. 2. Proposed Funding Source - Tourist Promotion Operating Fund—Hotel/Motel tax and Convention Center operations. 3. Public Impact - Continue to provide exceptional service. 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - None. Strategic Initiatives • Section IV —13 CITY ADMINISTRATION / CONVENTION CENTER 2014 STRATEGIC INITIATIVE INCREASE FUNDING FOR THE VISITOR INFORMATION CENTER BUDGETED PROPOSAL The City of Yakima with 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 which is 31% of the VIC budget). The balance of support (69%) comes from the private sector. City support has remained at $40,000 for the past ten years, but expenses have grown. As the structure is now 10 years old, there will be rising costs for maintenance, employee costs have risen as have various utilities and other operating expenses. Private sector support has been strong but alone can't 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. Our surveys of visitors this year 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, we estimate that these extended stays resulted in a minimum of $275,088 in new visitor spending in 2013 alone, and similar figures are expected for 2014. IMPACTS 1. Fiscal Impact — Additional $20,000. 2. Proposed Funding Source — Tourist Promotion Operating Fund--Hotel/Motel Tax. 3. Public Impact — The VIC provides an opportunity for businesses of all sizes to distribute information to travelers. Not only does it serve visitors but it is also a resource for residents and potential new businesses. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — None. 14 — Section IV • Strategic Initiatives CITY ADMINISTRATION / CAPITAL THEATRE 2014 STRATEGIC INITIATIVE PLAN AND IMPLEMENT CAPITOL THEATRE REPAIR AND IMPROVEMENTS BUDGETED PROPOSAL 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. The maintenance, repair and upgrade items that have been identified to date include: ADA and safety upgrades; repair and upgrade stage lighting system (includes safety issues); replace orchestra shell, theatrical masking/backing, asbestos fire curtain, main curtain and valance, counterweight rigging system, carpet, lobby elevator, dome lighting, front entry door, and Robertson room ceiling tile. The total cost of the above work is estimated to be $1.8 million. Funding for the entire list of capital projects is not currently in place. However, this program proposes to prioritize the work items, and then proceed with each item of work in order of priority as funds become available. Limited funding ($140,000) has been identified so it is anticipated that the ADA and priority safety upgrades as identified in a recent Life Safety Evaluation report on the facility will be completed in 2014. The Engineering Division will plan and begin implementation of a capital repair and improvement plan for the Capitol Theatre -- Engineering and Capitol Theatre staff will work together to make these needed improvements to this important piece of Yakima history and future revitalization. In light of the necessary capital improvements, the Capitol Theatre Committee is not asking for an increase in its management fee. This operational support will remain at $232,000 in 2014. IMPACTS 1. Fiscal Impact — $140,000. 2. Proposed Funding Source - Capitol Theatre Construction Fund - Transfer from Capitol Theatre Reserve Fund. 3. Public Impact - Better ADA access and safer facility. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives - Do nothing or delay starting the repairs and upgrades. This could cause safety concerns and allow further degradation of the facility. Strategic Initiatives • Section IV -15 CITY ADMINISTRATION / ECONOMIC DEVELOPMENT 2014 STRATEGIC INITIATIVE GANG FREE INITIATIVE BUDGETED PROPOSAL The City began the process to address the City's gang issue in 2011 by contracting with Magallan Consultancy to develop a Gang Free Initiative. Over the past few years, Magallan Consultancy has led the City through a visioning process to develop a strategy to understand how young people get caught up in gangs, and how the community can intervene to prevent the proliferation of gangs. This included collaboration with agencies that are already providing services to at -risk youth and partnering to support those existing efforts. The program has developed from a planning, developing stage into service delivery. The 2013 budget included several contracts with community organizations, such as YPAL, People for People, Madison House, and Comprehensive Mental Health. As the program matures, the oversight function is changing from one of facilitating collaboration and developing appropriate partnerships to one of contract management and service coordination. The consultant agrees that this is better done through the direct supervision by the City. Therefore, the proposed FY 2014 budget includes the hiring of 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. IMPACTS 1. Fiscal Impact — Add Operations Manager $88,600 Contracted Services 237,500 Other Incidental Costs 7,000 Total $333,100 2. Proposed Funding Source - General Fund. 3. Public Impact - Coordinated service delivery. 4. Personnel Impact - Addition of 1 additional FTE position. 5. Required Changes in City Regulations or Policies — Develop job description. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives - Keep coordination with consultant. 16 - Section IV • Strategic Initiatives CITY ADMINISTRATION / HUMAN RESOURCES 2014 STRATEGIC INITIATIVE REORGANIZATION BUDGETED PROPOSAL The Human Resources division has experienced significant turn -over in 2013. Upper management took this opportunity to review the staffing levels and is proposing to eliminate a mid-level manager, and replace a full-time staff position (Human Resource Specialist) with a lower -level permanent part-time (60%) position (Human Resource Assistant). This reduction in personnel results in a Citywide savings of $133,500, with $77,000 assisting in balancing General Fund, and $56,500 reducing the Unemployment, Workers' Compensation, and Medical Benefit internal service funds. IMPACTS 1. Fiscal Impact — Eliminate Deputy HR position ($102,700) Eliminate HR Specialist (75,800) Add 0.6 HR Assistant 45,000 Total ($133,500) 1. Proposed Funding Source — General Fund savings ($77,000); Other Fund savings ($56,500). 2. Public Impact — Reallocation of existing resources will maintain focus on the Civil Service hiring process. 3. Personnel Impact — Internal operational analysis possibly resulting in additional training opportunities. 4. Required Changes in City Regulations or Policies — Update position listings in the pay ordinance and payroll system. 5. Legal Constraints, if applicable — None. 6. Viable Alternatives — Staff is recommending that we move to this staffing complement. If service levels suffer, this could be revisited in future budget years. Strategic Initiatives • Section IV —17 CITY ADMINISTRATION / HUMAN RESOURCES 2014 STRATEGIC INITIATIVE IMPLEMENT QUALITY CUSTOMER SERVICE ACADEMY BUDGETED PROPOSAL 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. IMPACTS 1. Fiscal Impact — $50,000. 2. Proposed Funding Source — General Fund. 3. Public Impact — Improved, consistent Customer Service. 4. Personnel Impact — Participation in Customer Service training. 5. Required Changes in City Regulations or Policies — Contract with a consulting/training firm. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — We believe this is the most efficient way to do customer service training. 18 — Section IV • Strategic Initiatives COMMUNITY DEVELOPMENT / CODES/PLANNING 2014 STRATEGIC INITIATIVE ADD TWO CODE COMPLIANCE OFFICERS BUDGETED PROPOSAL 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. IMPACTS 1. Fiscal Impact - $100,000 (9 months/2014): $133,300 Annually 2. Proposed Funding Source - General Fund. 3. Public Impact - Improved response to code violations and complaints—ultimately a cleaner, safer community. 4. Personnel Impact - Additional code compliance officers to address areas of concern along with the ability to meet the public's demand of cleaning up the city. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives - Stay status quo with the three existing code compliance officers. Strategic Initiatives • Section IV -19 COMMUNITY DEVELOPMENT / CITY HALL MAINTENANCE 2014 STRATEGIC INITIATIVE CITY HALL IMPROVEMENTS BUDGETED PROPOSAL 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. Along with the ADA upgrades at the Utilities counter and at the west lobby entry doors, improvements to the lobby area for enhanced services are also scheduled. These include: ➢ Updating doors and entryways in the main lobby, as well as both entrances ➢ Updated lighting/ceilings in the main lobby ➢ Walk off mats, carpet and other updates to Council Chambers and adjoining areas ➢ Canopies over both main entryways IMPACTS 1. Fiscal Impact — $200,000. 2. Proposed Funding Source — Real Estate Excise Tax (REET) 1 Fund. 3. Public Impact — Appropriate ADA access to customer service counters. A sense of pride in a better functioning City Hall. 4. Personnel Impact — Managing contracts and staging the work. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — Follow proper purchasing procedures. 7. Viable Alternatives — Increase or reduce project scope. 20 — Section IV • Strategic Initiatives POLICE 2014 STRATEGIC INITIATIVE REINSTATE ONE PARKING ENFORCEMENT OFFICER BUDGETED PROPOSAL The Yakima Police Department proposes to re -instate one full time parking enforcement officer. The 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. IMPACTS 1. Fiscal Impact - $56,800. Estimated to generate ticket revenue of $40,000. Net cost to General Fund -- $16,800. 2. Proposed Funding Source - General Fund. Typically parking enforcement almost pays for itself by the ticket revenue generated. 3. Public Impact - More parking spaces available for shopping in the downtown. 4. Personnel Impact - One additional civilian FTE in the Police Department. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - None. Strategic Initiatives • Section IV — 21 POLICE 2014 STRATEGIC INITIATIVE EXPAND DOWNTOWN BICYCLE/FOOT PATROL BUDGETED PROPOSAL 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. IMPACTS 1. Fiscal Impact - $64,800 for two officers on four-day per week coverage in the patrol overtime budget. 2. Proposed Funding Source - General Fund. 3. Public Impact - This proposal would continue to improve the public perception of safety in the Downtown area. 4. Personnel Impact - There would be no additional staffing. Patrols would be done on an overtime basis. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives - Add staffing to conduct Downtown foot/bicycle patrols or continue with summer only patrols. 22 - Section IV • Strategic Initiatives POLICE 2014 STRATEGIC INITIATIVE INCREASE TRAINING PROGRAM FUNDING BUDGETED PROPOSAL 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. IMPACTS 1. Fiscal Impact — $75,000. 2. Proposed Funding Source — General Fund. 3. Public Impact - This proposal would provide citizens with highly trained police professionals in the management ranks of the Police Department. 4. Personnel Impact - Time invested in training. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives - Continue with current training program. Strategic Initiatives • Section IV - 23 POLICE 2014 STRATEGIC INITIATIVE AUTOMATED LICENSE PLATE READER PROGRAM BUDGETED PROPOSAL 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 (ALPR) 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. IMPACTS 1. Fiscal Impact - $135,000. 2. Proposed Funding Source - Law and Justice Capital Fund. 3. Public Impact - This proposal will aid in the investigation of auto theft and expedient recovery of stolen vehicles, providing better service to the public. 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - Identify information retention policies for the program. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - Continue without ALPR technology. 24 — Section IV • Strategic Initiatives POLICE/COMMUNICATIONS 2014 STRATEGIC INITIATIVE NEW COMMUNICATIONS CENTER CONSTRUCTION BUDGETED PROPOSAL 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. This joint operation is currently housed at the Law and Justice Center, but the operation has outgrown the current facility, and there is no more room for expansion. We have been in the planning stages with Yakima County, representing the 911 Call taking interests, and after careful and thorough evaluation have determine a remodel of the county -owned, minimum security jail building in Union Gap was the most economical course of action. A Pre -Design Study has been completed. The purpose of this phase is to identify needs, create a very preliminary design and determine the Rough Order of Magnitude (ROM) costs of the project. The next step will be to engage a firm to prepare the documents needed to go out to bid on construction. The ROM costs: Construction: (inc. design contingency 10%, Construct Cost Escalation 4%, soft costs 32%) Dispatch Console Furniture Office Furnishings Site Improvements $5,064,045 380,800 200,000 179,700 Shared Subtotal $5,824,545 Communication Systems (Dispatch Only) $1,354,200 911 Costs Dispatch Costs Annual Bond Payments Estimate: 911 Share Dispatch Share $2,912,273 $4,266,473 $203,700 $298,900 The Dispatch share of the bond assumes that the Communication Systems costs are included in the Bond rather than paid up front. If they are funded through a different mechanism, the annual bond payment for Dispatch will be the same or similar to the 911 share. At this point in time we anticipate the County will provide the bonding, so this project is not anticipated to be counted against our authorized debt limit. Strategic Initiatives • Section IV — 25 It should be noted that approximate $1.2 million of $5.064 million construction costs are additions specific to this being an emergency communications facility. With this taken into account the basic construction costs are approx. $328 per sq. foot which is not necessarily out of line with new construction. Once construction is complete and the facility occupied the annual lease payments will take effect. Annual Lease ($11/sq. ft.): 911 Share Dispatch Share Resulting in a total new added cost for each section of: Total additional cost once occupied: 911 Expense Dispatch Expense $64,350 $64,350 $268,050 $363,250 Once we move to the next step we are at least committed to seeing it through to review of the construction bid awards. At that time the primary parties; City of Yakima and Yakima County (representing the 911 system) would make a final decision. Assuming this goes forward as presented, the 2014 budget includes an estimate of $195,000 for the first year costs of debt service. Once the Communications Center is in its new facility, the space currently being occupied in the Law and Justice Center will be available for City needs. IMPACTS 1. Fiscal Impact — 2014: General Fund 911 Fund Annual estimate once project is completed: General Fund 911 Fund $97,500 $97,500 $363,250 $268,050 2. Proposed Funding Source — General Fund and Yakima County 911. 3. Public Impact — Better service provision in an updated facility. Potential to expand to a true regional dispatch center, producing economies of scale around the County. 4. Personnel Impact — Moving to a new facility while maintaining uninterrupted 911 call - taking and dispatching service. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — Ultimately a rental contract with Yakima County. May require Council approval to issue debt, depending on the financing structure. 7. Viable Alternatives — None. This is necessary to continue with the high level of service that is demanded of this joint communications center. 26 — Section IV • Strategic Initiatives POLICE / COMMUNICATIONS 2014 STRATEGIC INITIATIVE COMMUNICATIONS & TECHNOLOGY REORGANIZATION BUDGETED PROPOSAL It was approximately three years ago that 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, including a potential move to a new facility, and increasing demands on the ITS Division, it has become more challenging. Therefore, it has been determined that it is in the best interests of the city to return these divisions to their 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 costs savings of about $142,000 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. The last component of this reorganization is to move the Electronics operation from the Public Safety Communications (PSC) Fund into the ITS Division in General Fund, again in anticipation of the physical move of the communications center. This consists of 3 FTE positions that provide repair and maintenance for a variety of equipment, including radios, telephones, etc., for both the entire City and by contract for other agencies. There is no change in the citywide budget, but this does change both the General and PSC Funds' revenue and expenditure totals. This move adds $340,000 to the ITS budget, $108,000 in General Fund revenue representing their charges for service, and reduces the General Fund operating transfer to the Public Safety Communications Fund by $210,000. After this move, the transfer to PSC consists solely of dispatch services. IMPACTS 1. Fiscal Impact - Additional costs: General Fund Public Safety Communications Fund $100,200 $42,000 2. Proposed Funding Source - Primarily General Fund/Public Safety Communication Fund. 3. Public Impact - Indirect better service provision. 4. Personnel Impact - Fill the position of Communications Manager. Fill the position of ITS manager from existing personnel in the Communications & Technology Manager position. 5. Required Changes in City Regulations or Policies - Update the City Pay Ordinance and position master for the changes. Strategic Initiatives • Section IV — 27 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — None. 28 — Section IV • Strategic Initiatives FIRE 2014 STRATEGIC INITIATIVE REORGANIZATION BUDGETED PROPOSAL As a cost containment measure during the Great Recession, the Fire Departments overtime budget was severely reduced, and if regularly scheduled staff were not available, the sixth apparatus was not manned. Such days were considered "brownout" days. 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. To remedy this situation, $250,000 in additional overtime funds have been included in the proposed FY 2014 budget. In addition, $271,600 in next year's proposed budget has been included that will allow the 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. As the staffing complement was reviewed, upper management determined that the Department had a high ratio of management positions to non -management personnel, and proposed the elimination of three (3) Battalion Chief positions (management), and the institution of three (3) Shift Commander positions. This change in command structure is estimated to save $67,700. 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. Note: In 2013, 8 of the 81 commissioned fire personnel (about 10%) were being funded by the EMS levy in a separate special revenue fund. Because the EMS levy was re -approved by voters starting in 2014, and due to the funding formula of how the levy is distributed among County agencies, the City is expected to collect about $140,000 more in 2014 than the 2013 budget. This funding was available to cover the new Lieutenant and about 10% of the reinstated overtime. IMPACTS 1. Fiscal Impact - General Fund Eliminate 3.0 Battalion Chiefs & add 3.0 Shift Fire Captains (Net savings) Reinstate 2.0 Firefighters Increase Overtime Budget Increase Firefighter Training Total General Fund EMS Fund Add 1.0 Training Lieutenant Increase Overtime Budget Total EMS Fund Citywide Total ($67,700) 163,700 225,000 75,000 $396,000 $107,900 25,000 $132,900 $528,900 Strategic Initiatives • Section IV - 29 2. Proposed Funding Source — General Fund/EMS Fund. 3. Public Impact - The investment in the Fire Department will lead to the elimination of brown outs in the Fire Department and needed depth of service identified in the Regional Fire Authority project study. The Training Lieutenant position has been left vacant for many years due to budget constraints causing the EMS Captain to fill both roles. The increased training hours will bring the City closer to achieving the goal of a 3 rating by the Survey and rating Bureau as well as provide a safer work environment for fire employees. 4. Personnel Impact - Increased safety. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives - Continue reduced service with periodic "brownout" days. 30 — Section IV • Strategic Initiatives FIRE 2014 STRATEGIC INITIATIVE PURCHASE ONE REPLACEMENT BRUSH TRUCK BUDGETED PROPOSAL The Yakima Fire Department operates 2 wild land brush trucks to respond to wild land/urban brush and grassland fires. These trucks respond from fire station facilities that are closest in proximity to areas of the City that have the most potential for brush and grass fires. One of those two brush trucks is a 1990 model that was acquired through a transfer of assets when the City annexed Yakima County Fire Protection District #10, Fruitvale. This brush truck has served the citizens for nearly 24 years, but as an emergency response vehicle, its useful service life is nearing its end. The purchase of a replacement brush truck will help to maintain a reliable, safe and capable wild land fire suppression apparatus. IMPACTS 1. Fiscal Impact — Up to $130,000. 2. Proposed Funding Source — Fire Capital Fund. 3. Public Impact — Reliable equipment to respond to brush and grassland fires . 4. Personnel Impact — Enhanced reliability and passenger safety. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — Continue to use the aging vehicle. Strategic Initiatives • Section IV — 31 AIRPORT 2014 STRATEGIC INITIATIVE IMPLEMENT AIRPORT MARKETING PLAN/TERMINAL IMPROVEMENTS BUDGETED PROPOSAL 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 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. Note: the City applied for a grant to assist in this economic development initiative, but was not successful in obtaining an award. The City intends to continue applying for applicable grants. 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. IMPACTS 1. Fiscal Impact - Airport Marketing Plan/General Fund Airport Terminal Improvements/Air Terminal Operating Fund $100,000 $50,000 2. Proposed Funding Source - General Fund and Yakima Air Terminal Operating Fund 3. Public Impact - More air service opportunities out of the Yakima Air Terminal for the local community. 4. Personnel Impact - None. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - None. 32 — Section IV • Strategic Initiatives AIRPORT 2014 STRATEGIC INITIATIVE AIRPORT TAXIWAY/LIGHTING IMPROVEMENTS BUDGETED PROPOSAL 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 addition to the two grants, the airport will utilize its passenger facility charges to fund the remaining balance of the project. (Note: The local match is more than we currently have available in the capital. As previously approved by Council, the interfund loan program will be used as necessary.) 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. IMPACTS 1. Fiscal Impact — $11,100,000. 2. Proposed Funding Source - Yakima Air Terminal Capital Fund/FAA Grant- $10 million, matched by $1.1 million of airport passenger fees. The interfund loan program will be used as necessary. 3. Public Impact - Safer airport taxiways. 4. Personnel Impact - Manage the bidding process and resulting contract. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — Follow FAA grant requirements. 7. Viable Alternatives - None, the grant has been awarded. Strategic Initiatives • Section IV - 33 UTILITIES & ENGINEERING / ENGINEERING 2014 STRATEGIC INITIATIVE IMPLEMENT RIGHT-OF-WAY / STREET CUT PROGRAM BUDGETED PROPOSAL When commercial or government entities perform maintenance or construction activities in the public 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. By revising and updating chapter 8.72 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. Based on the Utility and Engineering Director's experience in other municipalities, the estimated revenue from this program is approximately $150,000, which has been added to General Fund revenue. The existing Traffic Engineering Division consists of the Streets & Traffic Operations Manager, a Traffic Systems Analyst, and two Traffic Engineering Technicians, and is included in the Streets and Traffic Engineering Fund. 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 or expertise to take on most of these tasks. Other work that needs to be done that has been 34 — Section IV • Strategic Initiatives 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. The new street encroachment program will also need staff to monitor and enforce its application. As much of this workload is tied more closely to Engineering than Street operations; the Supervising Traffic Engineer will be paid for out of the Engineering Division of General Fund, and move under the supervision of the City Engineer. The two Traffic Engineering Technicians are also being moved from the Streets Fund to General Fund, as they will be directly supervised by the new position. After the addition of the new position of $94,100 and the new revenue of $150,000, these changes are estimated to result in net savings of $55,900 to General Government operations. IMPACTS 1. Fiscal Impact - General Fund Reinstate 1.0 Supervising Traffic Engineer $94,100 Transfer 2.0 Traffic Tech II's from Streets 146,400 Add Street Cut Charge (150,000) Net General Fund 90,500 Street Fund -- Transfer out 2.0 Traffic Tech II's (146,400) Net Savings- General Government ($55,900) 2. Proposed Funding Source - ➢ General Fund: Expenditures increased by $240,500, revenues by $150,000 for a net increase of $90,500. ➢ Street Fund: Expenditures reduced by $146,400 Note: Property Tax was reallocated from the Street Fund to General Fund to balance the transfer of staff between the two funds. 3. Public Impact - Safer travel through work zones, fewer traffic delays caused by construction and less construction related damage to public infrastructure 4. Personnel Impact - Add one FTE position 5. Required Changes in City Regulations or Policies - Adoption of the new Chapter 8.72 of the Municipal Code. Communication of the new rules to the underground utility and development community. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - Do nothing or revise portions of the proposed Chapter 8.72. Resulting impacts would vary depending on severity of revisions, but doing nothing would result in no improvement over how construction activities in the public right -of way are currently handled. Strategic Initiatives • Section IV - 35 UTILITIES & ENGINEERING / ENGINEERING 2014 STRATEGIC INITIATIVE PEDESTRIAN AND BICYCLE CONNECTIVITY PLAN BUDGETED PROPOSAL Both the 2012 and 2013 Citizens 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. IMPACTS 1. Fiscal Impact - $40,000. 2. Proposed Funding Source - Gas Tax/Arterial Street Fund. 3. Public Impact - Connectivity provides safer and more efficient routes of travel for school children, pedestrians and bicyclists. Well planned sidewalks and bicycle lanes work in conjunction with pathways and busses to provide people with efficient alternatives to vehicular travel. 4. Personnel Impact - None, projects will be managed by existing Engineering staff. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - ➢ Do nothing. The existing voids in the City's sidewalk and bike lane network will continue to make alternative forms of travel difficult and potentially risky. ➢ Delay or revise starting the connectivity master plan design. This does nothing to solve the connectivity problem, but would allow the 2014 budget for the initial design work to be pushed into a later year. 36 — Section IV • Strategic Initiatives UTILITIES & ENGINEERING / WASTEWATER 2014 STRATEGIC INITIATIVE COMPLETE WASTEWATER COLLECTIONS MASTER PLAN BUDGETED PROPOSAL 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 for construction coordination of known wastewater deficiencies with street and other utility projects. Project coordination prevents costly repairs being made to street surfaces and reduces the overall impact to the community. It will also 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. IMPACTS 1. Fiscal Impact - $100,000 has been funded through a transfer of revenue to the collections capital fund 476 for 2014. 2. Proposed Funding Source - Wastewater Utility Revenues. 3. Public Impact - The public's infrastructure will be maintained and expanded to provide for sustainable reliable service and accommodate future economic growth. 4. Personnel Impact - Work with consultant to provide required data. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives - The project has maximized the effective use of city resources with consultant assistance to minimize the overall cost of the project. The collection of condition assessment data in the large trunk lines would have required the purchase of equipment and additional city staff. Contractors are able to collect and annotate data in the large lines at a rate of $5.00 to $10.00 per liner foot depending on pipe size and deployment conditions. An engineering consultant is under contract to provide capacity analysis of the system for $206,400. Strategic Initiatives • Section IV - 37 UTILITIES & ENGINEERING / WASTEWATER 2014 STRATEGIC INITIATIVE INSTALLATION OF BIOSOLIDS DRYER BUDGETED PROPOSAL 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, and reduces the facility's carbon emissions. Funding for this project will come from two Washington State Department of Ecology loans at 2.5% annual interest. Up to $4.7 million is budgeted to be spent in 2014. The second loan of $3.2 million will be used in 2015. IMPACTS 1. Fiscal Impact — ➢ The cost of the dryer facility is $7.9 million dollars. ➢ Annual revenues from the fertilizer product are expected to be $60,000. ➢ Savings of $200,000 in hauling and handling compared to the dried product uses. ➢ O&M costs for the dryer process are estimated to be $50,000 annually. ➢ City will significantly defer an $8-10 million digester when the dryer is installed. ➢ Annual debt service is estimated at $480,000. ➢ Annual net operating costs are estimated at $270,000. 2. Proposed Funding Source - The Washington Department of Ecology is funding this project through two loans which total $7.81 million at 2.5% interest. $324,734 of these loans is in the form of forgivable principle. 3. Public Impact - A dryer will reduces the biosolids production to 1/5 of current levels and produce soil amendments for City parks, golf courses, local agriculture, the Yakima Area Arboretum and private use. Increasing public and private partnerships will minimize handling costs. 4. Personnel Impact - The current personnel that operate the biosolids dewatering process are expected to be able to operate the dryer facility concurrently without additional coverage. 5. Required Changes in City Regulations or Policies - External and intra -City sales agreements of the Class A product will be required to be crafted and implemented. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - Option to register the facility as a Fertilizer Manufacturing Facility for tax purposes. 38 - Section IV • Strategic Initiatives UTILITIES & ENGINEERING / WASTEWATER 2014 STRATEGIC INITIATIVE SALMON RECOVERY/RIPARIAN RESTORATION PROJECT BUDGETED PROPOSAL The wastewater division is moving the City of Yakima Wastewater outfall in order to restore critical floodplain environment for salmon recovery and Yakima Basin Integrated Plan implementation. This project incorporates elements of the City of Yakima Strategic and Business Plans by investing in the City's appearance and built environment, improving trails, involving the public, and creating partnerships. This is a multi benefit project that will improve water quality, reduce flood hazards, enhance salmon and steelhead runs and foster growth by allowing upstream land to come out of flood insurance maps. IMPACTS 1. Fiscal Impact - Estimated $1,800,000 to $1,500,000 of the construction costs are grant funded. The Wastewater Division will have short term costs for engineering, permitting and cost share for grants. Project will need ongoing maintenance to keep up appearance of site. Long run fiscal savings will come from less flood damage repair to infrastructure and improved water quality. Increased salmon and steelhead habitat will promote recreation related economy. 2. Proposed Funding Source - Wastewater division capital fund and revenue from federal, state and local sources. Additionally, the City is partnering with many different groups to conduct volunteer clean up and tree planting on the site. 3. Public Impact - Temporary Greenway closures or detours during construction phases. Increase stability of trail in the long run. Greenway and new nature trail will surround a restored natural area after project completion. 4. Personnel Impact - Wastewater staff are expected to help with long term maintenance of the site. 5. Required Changes in City Regulations or Policies - Change easement for Greenway path. 6. Legal Constraints, if applicable - Grants will require maintenance consistent with original grant applications and agreements. Project requires approval of an extended mixing zone from Department of Ecology (currently under review). 7. Viable Alternatives - Several alternative were considered that were more costly, came with higher risk, and not consistent with other City strategic plan elements. Strategic Initiatives • Section IV - 39 UTILITIES & ENGINEERING / STORMWATER 2014 STRATEGIC INITIATIVE IMPLEMENT INTEGRATED STORMWATER PLAN BUDGETED PROPOSAL The City Stormwater program has completed a Stormwater Collection System Master Plan that identified $672 million in capital improvement needs for improving this sector of the built environment. The top priority list of projects could cost as much as $18.7 million dollars. Improved stormwater conveyance and retention is necessary to maintain NPDES permit compliance and to mitigate flood hazards. Additionally, flood control work by Yakima County identified specific project needs related to stormwater retention in the Boise Cascade Mill site and Gateway Shopping Center. 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 re -development could add value to these projects with improved drainage that incorporates improving the appearance and function of our built environment. IMPACTS 1. Fiscal Impact - $600,000 in 2014. Implementing the stormwater plan is estimated to cost $672 million over 20 years. Integrating stormwater work with ongoing initiatives can help reduce or off -set costs significantly. 2. Proposed Funding Source - City stormwater utility revenue, grants from Washington Department of Ecology, Yakima Basin Integrated Plan, and public and private partnerships. 3. Public Impact - An improved built environment also improves public safety, public trust, and economic development. 4. Personnel Impact - An integrated approach requires coordination between Stormwater, Economic Development and Planning personnel. Increased training/awareness on stormwater related "Low Impact Development" or other efforts for incorporating stormwater management into development is necessary. 5. Required Changes in City Regulations or Policies - Stormwater staff need to stay informed about opportunities with North 1st Street improvements, Boise Mill site, downtown and trails and park efforts. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - Treating stormwater at the end of pipes with mechanical and chemical treatment is an alternative, but the costs are much higher. 40 — Section IV • Strategic Initiatives UTILITIES & ENGINEERING / STORMWATER & WASTEWATER 2014 STRATEGIC INITIATIVE UPDATE STORMWATER, WASTEWATER AND INDUSTRIAL WASTEWATER RATE STUDIES BUDGETED PROPOSAL 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 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, compliance with debt service and cash reserve policies to provide a rationale and fair rate revenue strategy and establish costs for our utility customers. On top of being mandated, the rate study allows the City to ensure public trust and accountability with its rate structures. The study will document the sound financial practices the City uses to maintain the built environment and encourage economic development. The food and drink processing industry is a diversifying sector of the economy as large scale production is being augmented with smaller scale beer, wine and spirits production. A transparent evaluation of industrial wastewater rates is necessary information for potential new food and drink production in Yakima. IMPACTS 1. Fiscal Impact — $110,000. 2. Proposed Funding Source — Stormwater ($45,000) and Wastewater ($65,000) Funds. 3. Public Impact — A rate analysis with a three year proposed rate provides for a stable operating and capital budget. Maintaining the built environment is necessary to meet economic growth and expectations of the rate payers. Rate studies provide for establishing equity for utility customers and assign appropriate cost sharing of operations and capital projects. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — Council approval of an ordinance adopting a proposed rate structure for 2015 — 2017. 6. Legal Constraints, if applicable — Minimum Debt Service coverage and regulatory compliance. 7. Viable Alternatives — The rate study will include a review of viable funding options to meet capital and operating costs for the three utilities. Strategic Initiatives • Section IV — 41 PUBLIC WORKS / PARKS & RECREATION 2014 STRATEGIC INITIATIVE REINSTATE ONE ADMINISTRATIVE ASSISTANT BUDGETED PROPOSAL In August 2009, the Parks and Recreation Administrative Associate retired. This was the time of budget reductions and the position went unfilled for 16 months. Additional cuts were needed and due to reductions in the Planning Division a planner position was going to be eliminated. It was suggested at that time that the Planner position be split .6 FTE in Planning and .4 FTE in Parks and Recreation. At that time, the Parks and Recreation Division was beginning the process of updating the 2012 - 2017 Parks and Recreation Comprehensive Plan, and the assistance of a Planner became a valuable asset to Parks and Recreation in addition to some of the other duties that were performed by the Parks and Recreation Administrative Associate. The Parks and Recreation Division is proposing to reinstate the Parks and Recreation Administrative Associate position as permanent full time to maintain the highest level of service to the community. The Planner position will revert 100% to General Fund. Note: with other turnover in the Planning Division along with the reduction in medical rates, Planning's 2014 salary and benefits budget is virtually unchanged from 2013. IMPACTS 1. Fiscal Impact - $59,500. 2. Proposed Funding Source - Parks and Recreation Fund -Property Tax allocation. 3. Public Impact - Reinstatement of the Parks and Recreation Associate position will assist the Parks and Recreation Division in the ability to respond to citizen inquiries in a timely manner, increase the ability to create reports and publications, seek grants and donations for park projects and programs, assist with park planning, provide administrative support for the Parks and Recreation Commission and many other duties. 4. Personnel Impact - Increase staffing in Parks and Recreation Administration by .6 FTE. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - None. 7. Viable Alternatives - Leave position unfilled or replace vacancy with a part time employee. 42 — Section IV • Strategic Initiatives PUBLIC WORKS / STREETS 2014 STRATEGIC INITIATIVE IMPLEMENT PHASE I OF NORTH 1ST STREET PLAN BUDGETED PROPOSAL 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 grant has a 13% match, so the total project will be $3,124,000, with the match being provided by Arterial Street Gas Tax. The 2014 budget includes up to $1.2 million to be expended in 2014—the balance of $1,924,000 is slated to be spent in 2015. 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. IMPACTS 1. Fiscal Impact - Description 2014 2015 Total STP Grant $1,038,000 $1,680,000 $2,718,000 13% Local Match Gas Tax 162,000 244,000 406,000 Total Project Expense $1,200,000 $1,924,000 $3,124,000 2. Proposed Funding Source - Arterial Street Fund—grants and local match 3. Public Impact - Ultimately an inviting, aesthetically pleasing entrance into our community. 4. Personnel Impact - Project and Grant Management. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - Fulfill grant requirements. 7. Viable Alternatives - None - grant is approved. Strategic Initiatives • Section IV — 43 PUBLIC WORKS / STREETS 2014 STRATEGIC INITIATIVE ROAD IMPROVEMENTS BUDGETED PROPOSAL 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"d 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, $16.5 million dollar road rehabilitation bond is approximately $2,000,000, which is currently budgeted in a debt service fund. This investment would meet the minimum City Charter obligation to spend $2 million annually on road rehabilitation or reconstruction. Given the short time span to prevent the failure of 185 lane miles of road by 2020, the 2014 budget includes this 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. A prioritized listing of required street improvements follows, along with color -coded listings (including the current pavement condition index) of improvements constructed with the $5 million bond issue in 2013; the streets scheduled to be constructed with the $16.5 million in 2014; and the streets that will still need to be constructed. The final attachment is a map of these three lists. 44 — Section IV • Strategic Initiatives IMPACTS 1. Fiscal Impact - General Fund is transferring $2 million to a debt service fund to fulfill the requirements of the Charter amendment. $500,000 is being covered by a redirection of a 5% Cable TV utility tax that was originally levied to fund debt service on the building of the Law and Justice Center in 1993. That 20 year bond issue will be paid in full in 2013, and the revenue is being moved into General Fund to help support this initiative. Debt Service Road Improvements Total Project $2,000,000 16,500,000 $18,500,000 2. Proposed Funding Source - Councilmanic General Obligation Bonds, $16,500,000 in a new Street Capital Fund. Related debt service of $2 million is coming out of General Fund to a debt service fund. 3. Public Impact - Reinvestment in infrastructure to bring 92 lane miles of roads back into good condition. 4. Personnel Impact - Design work, bid development, contract management. 5. Required Changes in City Regulations or Policies - A new Street Capital Fund is being established to account for projects related to the Charter amendment. 6. Legal Constraints, if applicable - Council will need to approve a bond ordinance in order to issue debt. 7. Viable Alternatives - Do some combination of bonding and "pay as you go". This delays the improvements. Strategic Initiatives • Section IV — 45 46 — Section IV • Strategic Initiatives 2014 - 2015 Grind and Overlay Priority Street From To PCI Cost - Accum. Lane Miles Accum. Lane Miles ADT '~ 1 HillNob�ou|,vod~ 3rd Bridge 16 $551,580 $551,580 3.2 3.2 26,775 2 40thAvenue * � Englewood Fruitvale 36 $780,000 $1,331,580 4.5 7.6 27,600 3 z6tbAvenue * Madison SR 12 10 $390,080 $1,721'580 2.2 9.9 18,734 4 VVa|nut~ 7th Avenue 1st Street 21 $900,000 $2,621,580 5.2 15.0 17,550 5 r,oitvae8nu|evard* 21st Avenue 4Oth Avenue 15 $1,596,000 $4'227'580 9.2 24.2 I0,525 6 Tieton Drive * 16th Avenue 32nd Avenue 30 $696'960 $4'914'540 4.0 28.2 16,800 7 Tieton rive* 40th Avenue 48thxvem 24 $362,250 $5,276,790 2.1 30.3 15,680 ' � Washington Avenue ~ 16th Avenue 1st Street 37 $1,533.600 $6,810.390 8.8 39.1 16,000 9 SummitvievvAvenue ^ 56th Avenue � 62ndAvemue 31 $356,400 $7,166,790 2.0 41.1 17,750 10 3rd Avenue ^ Walnut �oS«,eo 26 $604,860 $7,771,650 3.5 44.6 11,358 11 Lincoln Avenue 16th Avenue 10th Street � 43 $1'186560 $O.958,I10 6.8 5I.4 ' 1�83O l� MLK 8ou|evard 7th Avenue 10th Street 40 $1,002,000 S9,960210 5.8 57.2 10,777 13 Nob Hill Boulevard * 32nd Avenue 48th Avenue 36$893,250 $10,853,460 5.1 62.3 16,205 14 FruitvahnBuuevard * 21st Avenue 11th Avenue 27 $67I,000 $11,5I5,460 3.9 66.1 13,625 15 Mead Avenue * 10thAvenue 10th Street 28 $1,058,640 $12.584,100 6.1 72.2 10'510 16 Yakima Avenue * 12th Avenue 16thAvenue 31 $243,600 $12,8I7'700 1.4 73.6 10,780 17 Lincoln Avenue* 24th Avenue 32nd Avenue 36 $327,000 $13,154,700 1.9 75.5 10'300 18 6th Street * Pacific Yakima _ 24 _660,000 ,13,8I4,780 3.8 79.3 4,730 19 6th Street + Yakima 'H' Street 35 $0l0U0 $14,414,700 3.4 82.7 7,600 20 Sth Avenue * VY Walnut Yakima 17 $184,830 $14,599,530 $14.599,530 1.1 83.8 1I,050 21 2nd Street * WILKBbd. '1' Street 21 $5I5'000 $15,124,538 3.0 86.8 I'000 n 4th Avenue ° Division MLK Blvd. 19 $711,000 $15,835,530 4.1 90.9 1'000 23 19thAvenue ^ � Chestnut MacClaren 28 $180'000 6,015'530 1.0 91.9 1,000 * Could fail if riot replaced by 2020 PRINCIPAL ARTERIALS, MINOR ARTERIALS AND COLLECTORS CONSTRUCTED IN 2013 Name From To Nob Hill Boulevard* 100 1000 1st Street 1800 (Mead) 1400 (Nob Hill) 40th Avenue* 600 (Tieton) 130 (Summitview) 16th Avenue* 600 (Englewood) 1100 (Madison) Tieton Drive* 4000 3200 Summitview Avenue* 5600 4800 40th Avenue* 1100 (Nob Hill) 600 (Tieton) Fair Avenue* 1800 (Mead) 1400 (Nob Hill) Washington Avenue* 100 120 Fair Avenue* 1400 (Nob Hill) 900 (Pacific) Walnut Street 100 (1st St) 300 (3rd St) Walnut Street 300 (3rd St) 600 (6th St) 64th Avenue* 2200 (Occidental) 2000 (Washington) PCI 29 37 30 38 27 29 37 17 36 33 40 40 32 Legend * Could fail if not replaced by 2020 Constructed in 2013 Scheduled to be constructed ($16 Million) Remaining to be constructed Policy Issues • Section V — 47 SCHEDULED TO BE CONSTRUCTED ($16 MILLION) Name From To PCI Nob Hill Boulevard * 300 100 16 40th Avenue * 600 (Englewood) 1220 (Fruitvale) 36 16th Avenue * 1100 (Madison) CL (SR 12) 10 Nob Hill Boulevard * 4800 3200 36 Walnut Street * 300 (3rd Ave) 100 (1st St) 12 Washington Avenue * 16th Avenue 1st Street 37 Summitview Avenue * 6200 5600 31 Tieton Drive * 4800 4000 24 Tieton Drive * 3200 1600 30 Fruitvale Boulevard * 4000 3000 10 5th Avenue * 200 (Walnut) 10 (Yakima) 17 Martin Luther King Blvd * 100 1000 16 Lincoln Avenue * 1600 700 33 Walnut Street * 700 (7th Ave) 500 (5th Ave) 11 Fruitvale Boulevard * 3000 2100 21 Mead Avenue * 10th Avenue 10th Street 28 Yakima Avenue * 1600 1200 31 3rd Avenue * 200 (Walnut) 10 (Yakima) 19 Lincoln Avenue 700 200 43 Lincoln Avenue * 3200 2400 35 Walnut Street 500 (5th Ave) 300 (3rd Ave) 51 Lincoln Avenue 400 1000 43 6th Street * 900 (Pacific) 10 (Yakima) 24 Lincoln Avenue 200W 400E 52 3rd Avenue * 10 (Yakima) 1320 (D St) 30 Martin Luther King Blvd 700 100 69 Fruitvale Boulevard * 2100 1100 27 6th Street * 10 (Yakima) 720 (H St) 35 Legend 1 * Could fail if not replaced by 2020 Constructed in 2013 Scheduled to be constructed ($16 Million) Remaining to be constructed 48 — Section V • Policy Issues REMAINING TO BE CONSTRUCTED Legend * Could fail if not replaced by 2020 Constructed in 2013 Scheduled to be constructed ($16 Million) Remaining to be constructed Policy Issues • Section V — 49 Name From To PCI 16th Avenue 1100 (Nob Hill) 10 (Yakima) 55 1st Street 900 (I St) 1904 (C.L.) 51 16th Avenue 10 (Yakima) 600 (Englewood) 59 Summitview Avenue 4800 4000 46 Tieton Drive * 7200 6400 23 1st Street 2415 (Miners) 1800 (Mead) 51 1st Street 1400 (Nob Hill) 10 (Yakima) 44 Tieton Drive * 6400 5600 34 Nob Hill Boulevard 1000 1800 41 Nob Hill Boulevard 5200 4400 50 1st Street 10 (Yakima) 900 (I St) 68 72nd Avenue * 2103 (Coolridge) 1900 (Washington) 27 Summitview Avenue 3200 2300 45 Summitview Avenue 4000 3200 49 Lincoln Avenue* 6600 5600 11 24th Avenue * 1820 (Washington) 1100 (Nob Hill) 32 Summitview Avenue 2300 1400 54 G Street * 100 (1st St) 300 (3rd St) 18 ■ 32nd Avenue * 200 (Summitview) 650 (Englewood) 23 64th Avenue * 2600 (Ahtanum) 2300 (Occidental) 32 Englewood Avenue * 5600 4800 36 40th Avenue 4000 (Washington) 1100 (Nob Hill) 53 Ahtanum Road 2600 (26th Ave) 1600 (16th Ave) 53 G Street * 300 (3rd St) 600 (6th St) 23 Englewood Avenue * 7400 6600 23 Summitview Avenue 1400 700 62 Pecks Canyon Road * 5300 (Scenic Dr) City Limits 27 Lincoln Avenue 4000 3200 53 Scenic Drive * 58th Ave 53rd Ave 34 Castlevale Road * 2800 2400 36 Viola Avenue * 1000 (Fair Ave) 1800 (18th St) 34 Scenic Drive * 6600 5800 37 32nd Avenue 600 (Tieton) 200 (Summitview) 53 Viola Avenue 1800 (18th St) 2100 (Rudkin Rd) 47 Legend * Could fail if not replaced by 2020 Constructed in 2013 Scheduled to be constructed ($16 Million) Remaining to be constructed Policy Issues • Section V — 49 sdnssl fi o j . 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Earl CNna;Nag KOn91. sOt:elope. aro Te GIS User Carmlvny 1 j�_ PUBLIC WORK / TRANSIT 2014 STRATEGIC INITIATIVE TRANSIT CENTER STAFFING CHANGES BUDGETED PROPOSAL Staff the Downtown Transit Center with permanent part-time DA -II employees (up to 3/4 time each as needed) to perform ticket and pass sales and provide transit information to the patrons, replacing the four part-time temporary contract employees. This proposal will also increase the two part-time Vehicle Cleaners from 75% to 90% (as needed) by reassigning work previously performed by a cleaning/maintenance contractor to our existing cleaning staff in order to reduce costs. The workload will increase due to maintenance of transit's assets (transit center, shelters, bus sign, benches, etc). For the past several years, Yakima Transit has contracted for employment services through Entrust (employment service agency). Due to issues related to customer service and poor performance, Yakima Transit did not renew the employment service contract that ended on June 30, 2013. From an employment/business analysis, it was determined that several issues (lack of customer service, control over the contractor's employees, and daily inconsistencies with the cash register) could be resolved by reorganizing the way Yakima Transit provided their service. The plan will relocate two existing employees (part of the time) and hire two part-time employees to replace the four part-time employees that the employment agency hired to provide the service. This plan will also allow Yakima Transit to assign transit administrative work to staff at the transit center during down times and provide phone and other assistance to Yakima Transit's dispatchers. IMPACTS 1. Fiscal Impact — $77,800. 2. Proposed Funding Source — Transit Operating Fund/Local Sales Tax. 3. Public Impact — Preserve the ability to serve the public more efficiently and productively at Yakima Transit's Downtown Transit Center. 4. Personnel Impact — Up to 1.5 FTE's at DA -II level & up to 0.3 FTE at Vehicle Cleaner level. The two DA-II's are currently temporary employees working at the Transit Center. They were hired to replace employees working for a temporary employment agency. By increasing vehicle cleaner hours, we are able to reduce costs associated with contracted cleaning services at the transit center and along routes. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — Continue to operate as is and postpone streamlining staff positions to a later date. Strategic Initiatives • Section IV — 51 PUBLIC WORK / TRANSIT 2014 STRATEGIC INITIATIVE PURCHASE 3 HEAVY DUTY REPLACEMENT BUSES BUDGETED PROPOSAL Purchase three (3) heavy-duty low -floor buses, estimated to cost $430,000 each. Buses typically have a 12 -year useful life. Seven (7) of Yakima Transit's twenty-eight (28) buses are past the 12 -year period. Three (3) more have not made it to that 12 -year period and also need to be replaced. Buses are disposed of when the vehicle is either beyond the 12 -year period and spends a lot of time in the shop, or sooner if the cost to repair the vehicle outweighs the potential benefits of repairing the vehicle. Two (2) of the seven (7) buses are 22 years old; the other five (5) are 18 years old. The other three (3) that didn't make it to the 12 -year period are 11 years old. At maximum service, Yakima Transit operates 19 buses, additional vehicles are necessary to maintain an adequate operational fleet. Buses will be replaced as soon as practical; however, at this time, Yakima Transit needs to keep the older buses to maintain an adequate spare ratio to fill in when other vehicles are taken out off the road for service. IMPACTS 1. Fiscal Impact — $1,290,000. 2. Proposed Funding Source — Transit Capital Fund/Accumulated reserves of Local Sales Tax. 3. Public Impact — Allows Yakima Transit to maintain an adequate amount of operational vehicles in stock. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — FTA has stringent rules regarding the number and condition of the transit fleet. 7. Viable Alternatives — Procure used buses that are less expensive, yet costly to maintain and do not provide the same level of reliability. 52 — Section IV • Strategic Initiatives PUBLIC WORK / TRANSIT 2014 STRATEGIC INITIATIVE DIAL -A -RIDE (DAR) REPLACEMENT PLAN BUDGETED PROPOSAL Purchase eight (8) paratransit minivans. DAR vehicles typically have 5 to 7 years of useful life. Twenty (20) of Yakima Transit's 39 paratransit vehicles are past the seven year mark. The vehicles being replaced include four 1999 cutaways, three 2006 Taurus, and one 2007 Ford Taurus. All of the cutaways are currently being used as parts vehicles to keep other vehicles in service. At maximum service, Medstar (Dial A Ride service provider) uses 34 vehicles. Without the new vehicles, Yakima Transit may miss trips violating ADA/FTA regulations. WSDOT has allocated the grant funding for Yakima Transit for the purchase of these vehicles. IMPACTS 1. Fiscal Impact — $392,000. 2. Proposed Funding Source — Transit Capital Fund: State grant $313,600 (80%) and local sales tax $78,500 (20%). 3. Public Impact — Allows Yakima Transit to replace the DAR vehicles that are well past their useful life and must be replaced. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — There are no other reasonable alternatives that could be cost effective. Yakima Transit could refurbish many of the vehicles at a much higher cost than Yakima Transit's grant match rate. Four of the vehicles (sedans) were not as feasible to use in the service and Yakima Transit has switched them over to function as relief, administration vehicles instead of purchasing new admin vehicles. Several vehicles are being parted out and require substantial repairs to make them roadworthy. Strategic Initiatives • Section IV — 53 PUBLIC WORK / EQUIPMENT RENTAL 2014 STRATEGIC INITIATIVE FLEET VEHICLE ADDITIONS & REPLACEMENTS BUDGETED PROPOSAL Replace or increase the Equipment Rental fleet per the included listing below. Fire, Police and Transit rolling stock are managed separately by the respective departments. Vehicle replacement is determined by maintenance costs, usage, and technical service need. Division Description Replacing 2014 Budget Fund Total Engineering Toyota Tacoma Ext Cab 4X2 PU ER2248 $27,000 $27,000 Street & Traffic Ford 1 Ton Crew Cab F350 w/Flatbed ER3098x 45,000 Poor - 20 years old, 116,000 miles Front Loader s/4-1 Multi -Purpose Bucket/Coupler ER6063 175,000 220,000 Water & Irrigation lh Ton PU Ext Cab 4X2 w/Cab High Canopy ER2224 30,000 Poor - 13 years old, 120,000 miles Toro Dingo TX 525 w/Trailer Add 44,000 Poor - 12 years old, 103,000 miles Refuse Ford/Utilitmaster Step Van ER3158 100,000 174,000 Refuse Automated Sideloading Refuse Truck ER3151 315,000 Poor - 10 years old, exceeds life expectancy Wastewater Automated Sideloading Refuse Truck ER3168 315,000 630,000 Wastewater lh Ton PU Ext Cab 4x2 w/Service Body Add 40,000 Poor - 12 years old, exceeds life expectancy Ford Transit Connect ER2265 40,000 Poor - 26 years old, obsolete Ford Transit Connect ER2266 40,000 Combination Sewer Cleaner ER3071X 450,000 570,000 Total $1,621,000 The chart below details the condition of the vehicles and equipment being replaced: Division Description E/R Number Model Year Condition/Application Engineering GMC Sonoma Pickup 4X4 ER 2248 2001 Poor - 13 years old, 107,000 miles Streets Chevrolet 1 Ton Truck ER 3098X 1994 Poor - 20 years old, 116,000 miles Caterpillar 928G Loader ER 6063 1998 Poor - 16 years old, 6,500 hours (*) Water Dodge Ram Quadcab Pickup 4X2 ER 2224 2001 Poor - 13 years old, 120,000 miles Workhorse/Grumman Step Van ER 3158 2002 Poor - 12 years old, 103,000 miles Refuse Automated Sideloader Refuse Truck ER 3151 2002 Poor - 12 years old, exceeds life expectancy Automated Sideloader Refuse Truck ER 3168 2004 Poor - 10 years old, exceeds life expectancy Wastewater GMC Sonoma Pickup ER 2265 2002 Poor - 12 years old, exceeds life expectancy Ford Ranger Supercab Pickup 4X4 ER 2266 2002 Poor - 12 years old, exceeds life expectancy International Truck w/Vactor ER 3071X 1988 Poor - 26 years old, obsolete (*) 6,500 hours is equivalent to 195,000 to 325,000 miles 54 — Section IV • Strategic Initiatives IMPACTS 1. Fiscal Impact — $1,621,000 from the accumulated reserve dedicated for this purpose. 2. Proposed Funding Source — The Equipment Replacement Fund for replacements. 3. Public Impact — Delaying purchase would ultimately reduce ability to provide respective services to the community and shift operating costs to Fleet Maintenance. 4. Personnel Impact — None. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — Delaying these purchases is an option, though excessive maintenance costs would shift expense to Fleet Maintenance budget. Strategic Initiatives • Section IV — 55 PUBLIC WORK / EQUIPMENT RENTAL 2014 STRATEGIC INITIATIVE DIESEL PARTICULATE FILTER CLEANING EQUIPMENT BUDGETED PROPOSAL Purchase and install diesel particulate filter cleaning equipment allowing the City to clean DPF's in house, replacing expensive and time consuming outsourced services. IMPACTS 1. Fiscal Impact — All diesel powered trucks purchased after 2007 are required to have DPF's in the exhaust system, mandated by the Environmental Protection Agency of the Federal Government. Currently DP Filters are cleaned by sending to outside vendors. Costs are expensive and downtime is experienced while the filters are in process. Extra spare filters are high cost, thereby increasing spare parts inventory costs. Estimated cost of equipment delivered to Yakima, installed, ready to operate is $85,000. 2. Proposed Funding Source — Funding will be generated over time, in the M&O Budget of the Equipment Rental Division from charges to the divisions requiring the service. In addition, a search is being conducted for funding through state or Federal grant programs. 3. Public Impact — The public sector will benefit by improved air quality by cleaner exhaust emissions from diesel powered vehicles. 4. Personnel Impact — Employees will be able to provide lower cost and timelier maintenance services. 5. Required Changes in City Regulations or Policies — The City is obligated to conform to Federal Mandates with regard to Air Quality Standards governing diesel engine emissions. 6. Legal Constraints, if applicable — City must conform to Federal mandates. 7. Viable Alternatives — Continuing "as is" is not a viable alternative due to excessive costs and extended turnaround time for repairs. 56 — Section IV • Strategic Initiatives PUBLIC WORKS / ADMINISTRATION 2014 STRATEGIC INITIATIVE REINSTATE ONE DEPARTMENT ASSISTANT II BUDGETED PROPOSAL In August 2012, the employee holding the Public Works Department Assistance II stationed at the service counter resigned. The permanent full-time position was then eliminated from the 2013 budget as a cost containment measure. Because of the continuing workload, a temporary employee has been in that position. Staff is proposing that the permanent position be reinstated. IMPACTS 1. Fiscal Impact — $46,100. 2. Proposed Funding Source — Public Works Administration — PW Administration charges to divisions housed at that facility. 3. Public Impact — Reinstatement of the Public Works DA II position will increase continuity and quality of customer service and also provide support to Public Works Department staff. The DA II position interacts with the general public in person and on the phone regarding many different issues. This position regularly answers questions regarding Water and Irrigation, Transit, Parks and Recreation, Streets and Refuse. This position serves as a cashier for bus pass purchases and Parks and Recreation program registrations and facility reservations. In addition, this position provides administrative support to the Public Works Managers and Supervisors and other staff. 4. Personnel Impact — Utilize a full time employee for the DA II position. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — Leave position filled by temporary employees. Strategic Initiatives • Section IV — 57 PUBLIC WORKS / ADMINISTRATION 2014 STRATEGIC INITIATIVE IMPROVEMENTS TO SOUTHEAST COMMUNITY CENTER BUDGETED PROPOSAL 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 (OIC), the facility's contracted operator, has agreed to contribute the construction labor portion of the updated services. The total renovation is estimated to cost over $100,000 if contracted out. The cost for supplies and materials is estimated at $45,000, or less than half of the total cost. IMPACTS 1. Fiscal Impact — $45,000. 2. Proposed Funding Source — Parks & Recreation Fund. 3. Public Impact - Improved Community Center. 4. Personnel Impact - Coordinate with OIC to accomplish the needed improvements. 5. Required Changes in City Regulations or Policies — None. 6. Legal Constraints, if applicable — None. 7. Viable Alternatives — None. 58 - Section IV • Strategic Initiatives Three -Year Budget Comparison • Exhibits -1 THREE-YEAR BUDGET COMPARISON - 2014 BUDGET BY CITY FUNCTIONAL GROUPING 2012 2013 2013 2014 2014 2014 2014 2014 2014 Actual Amended Year -End Preliminary vs 2013 Projected Use of Fund Beginning Est. Ending Expenditures Budget Estimate Budget Estimate Revenue Balance Fund Balance Fund Balance General Government City Council $236,321 $284,751 $275,801 $282,076 2.3% City Manager 357,542 366,555 371,626 372,684 0.3% State Examiner 105,946 110,000 110,000 110,000 0.0% Records 520,503 461,070 455,179 563,922 23.9% Financial Services 1,437,305 1,478,418 1,463,365 1,488,836 1.7% Human Resources 437,905 459,969 458,094 513,151 12.0% Legal 1,087,024 1,287,573 1,273,983 1,314,323 3.2% Municipal Court 1,173,262 1,384,004 1,345,450 1,344,118 (0.1%) Purchasing 503,721 541,244 542,991 549,369 1.2% Hearing Examiner 22,475 26,000 27,500 31,000 12.7% Environmental Planning 550,322 534,116 529,622 458,481 (13.4%) Code Administration 1,164,991 1,389,047 1,387,163 1,537,371 10.8% Indigent Defense 487,601 833,500 540,500 600,500 11.1% Economic Development 42,485 457,216 454,640 486,733 7.1% Gang Free Initiative - - 333,105 n/a Police 24,470,231 25,880,899 25,160,522 26,057,587 3.6% Fire 9,419,820 9,909,477 9,789,746 10,167,258 3.9% Police Pension 1,264,681 1,297,225 1,345,925 1,343,325 (0.2%) Engineering 659,375 686,172 662,004 1,109,632 67.6% City Hall Maintenance 320,121 372,923 361,918 407,885 12.7% Information Systems 2,216,953 2,435,038 2,291,558 2,912,612 27.1% Utility Services 1,281,779 1,324,950 1,320,889 1,316,181 (0.4%) Intergovernmental 241,669 261,549 261,049 244,031 (6.5%) Nonrecurring Expenses - (730,000) (950,000) n/a Transfers 3,485,667 3,002,275 3,002,275 4,342,275 44.6% Total General Fund $51,487,699 $54,053,971 $53,431,800 $56,936,455 6.6% 57,181,843 Parks & Recreation 4,046,898 4,132,425 4,128,949 4,412,448 6.9% 4,357,215 Street & Traffic Operations 5,237,585 5,490,823 5,335,438 4,786,409 (10.3%) 4,596,360 Total General Government Funds $60,772,182 $63,677,219 $62,896,187 $66,135,312 5.1% 66,135,418 245,387 9,245,322 9,490,709 (55,233) 678,057 622,824 (190,049) 1,159,849 969,800 105 11,083,228 11,083,333 2 — Exhibits • Three -Year Budget Comparison 2012 2013 2013 2014 2014 2014 2014 2014 2014 Actual Amended Year -End Preliminary vs 2013 Projected Use of Fund Beginning Est. Ending Expenditures Budget Estimate Budget Estimate Revenue Balance Fund Balance Fund Balance Other Operating/Enterprise Economic Development $256,503 $277,332 $277,332 $456,622 64.6% $258,000 ($198,622) $227,304 $28,682 Community Development 2,258,745 2,564,724 2,415,534 1,766,938 (26.9%) 1,764,163 (2,775) 225,833 223,058 Community Relations 480,705 922,855 918,800 601,850 (34.5%) 551,600 (50,250) 535,672 485,422 Cemetery 264,453 267,327 267,287 278,900 4.3% 264,950 (13,950) 39,882 25,932 Emergency Services 1,175,527 1,189,923 1,189,923 1,339,282 12.6% 1,337,026 (2,256) 134,085 131,829 Public Safety Communications 3,230,863 3,520,154 3,441,871 3,218,239 (6.5%) 3,019,937 (198,302) 317,729 119,427 Police Grants 1,086,380 708,078 835,439 469,024 (43.9%) 484,000 14,976 428,879 443,855 Downtown Improvement District 154,116 287,522 287,522 244,358 (15.0%) 235,170 (9,188) 31,304 22,116 Trolley (Yakima Interurban Lines) 1,217 77,246 24,568 57,809 135.3% 54,926 (2,883) 8,036 5,153 Front St Business Impr Area 1,533 5,000 5,000 9,000 80.0% 3,335 (5,665) 6,785 1,120 Tourist Promotion 1,426,855 1,460,299 1,460,299 1,483,667 1.6% 1,548,250 64,583 434,559 499,142 Capitol Theatre 346,200 348,300 344,730 342,020 (0.8%) 297,250 (44,770) 58,180 13,410 PFD Revenue -Convention Center 717,685 684,000 684,000 645,000 (5.7%) 755,750 110,750 245,335 356,085 Tourist Promotion Area 632,725 667,000 667,000 687,000 3.0% 687,000 78,685 78,685 PFD Revenue -Capitol Theatre 516,985 517,000 517,000 531,000 2.7% 575,500 44,500 96,837 141,337 Recovery Program Grants 37,348 - - - n/a Airport Operating Fund - 1,081,788 997,451 1,037,370 4.0% 993,625 (43,745) 87,502 43,757 Storm Water Operating 1,939,945 2,087,622 2,080,778 2,325,519 11.8% 2,165,000 (160,519) 1,449,369 1,288,850 Transit 7,900,929 8,042,762 7,995,954 8,240,033 3.1% 7,660,917 (579,116) 1,467,772 888,656 Refuse 5,435,765 5,654,199 5,652,596 5,670,633 0.3% 5,586,000 (84,633) 360,765 276,132 Sewer Operating 19,278,273 19,525,178 19,422,519 20,213,432 4.1% 19,958,357 (255,075) 1,906,382 1,651,307 Water Operating 8,204,797 8,546,883 8,273,043 9,022,649 9.1% 7,997,500 (1,025,149) 2,406,577 1,381,428 Irrigation Operating 1,386,481 1,509,163 1,509,073 2,063,884 36.8% 1,766,100 (297,784) 919,142 621,358 Equipment Rental 5,864,466 5,978,336 5,975,598 5,671,800 (5.1%) 5,319,711 (352,089) 4,095,311 3,743,222 Environmental Fund 146,154 192,950 192,950 192,950 0.0% 150,000 (42,950) 395,848 352,898 Public Works Administration 1,117,602 1,202,645 1,197,546 1,168,866 (2.4%) 1,115,438 (53,428) 424,110 370,682 Total Other Operating/Enterprise $63,862,252 $67,318,286 $66,633,813 $67,737,845 1.7% $64,549,505 ($3,188,340) $16,381,883 $13,193,543 Three -Year Budget Comparison • Exhibits - 3 2012 2013 2013 2014 2014 2014 2014 2014 2014 Actual Amended Year -End Preliminary vs 2013 Projected Use of Fund Beginning Est. Ending Expenditures Budget Estimate Budget Estimate Revenue Balance Fund Balance Fund Balance Capital Improvement Arterial Street $2,368,655 $8,935,977 $6,865,515 $5,106,566 (25.6%) $3,823,975 ($1,282,591) $1,748,436 $465,845 C.B.D. Capital Improvement 72,210 229,500 229,500 91,000 (60.3%) 22,400 (68,600) 156,385 87,785 Capitol Theatre Construction 3,201 - 140,000 n/a 71,927 (68,073) 72,546 4,473 Yakima Rev Development Area 1,299,536 2,509,240 1,913,005 2,473,235 29.3% 2,850,000 376,765 208,278 585,043 Parks & Recreation Capital 819,062 100,000 100,000 100,000 0.0% (100,000) 139,540 39,540 Fire Capital 271,094 1,246,896 1,246,459 296,459 (76.2%) 134,500 (161,959) 534,108 372,149 Law & Justice Capital 953,846 5,289,102 5,289,047 750,636 (85.8%) 382,886 (367,750) 527,162 159,412 Public Works Trust Construction 631,315 958,782 958,782 732,773 (23.6%) 676,306 (56,467) 403,137 346,670 REET 2 Capital Construction 506,822 506,822 506,822 772,787 52.5% 592,000 (180,787) 513,132 332,345 Street Capital Fund - - 16,500,000 n/a 16,500,000 - - - Airport Capital - 1,897,707 1,897,707 11,162,885 488.2% 10,666,597 (496,288) 531,920 35,632 Stormwater Capital 378,233 503,424 229,550 790,000 244.2% 444,000 (346,000) 1,166,613 820,613 Transit Capital Reserve 294,088 545,500 67,630 1,749,000 2486.1% 1,268,507 (480,493) 2,257,292 1,776,799 Convention Center Capital Impr 211,826 295,000 225,000 360,000 60.0% 260,500 (99,500) 583,267 483,767 Cum. Reserve for Capital Impr 2,197,797 12,537,058 9,621,094 4,948,000 (48.6%) 4,004,489 (943,511) 1,996,764 1,053,253 Wastewater Facilities Capital Rsv 14,280 50,000 50,000 400,000 700.0% 505,500 105,500 976,035 1,081,535 Sewer Construction 1,506,642 6,365,000 4,190,000 4,200,000 0.2% 1,500,000 (2,700,000) 4,677,701 1,977,701 Domestic Water Improvement 426,833 7,150,896 6,995,000 4,320,000 (38.2%) 2,264,800 (2,055,200) 3,615,836 1,560,636 Wastewater Facilities 6,573,146 14,040,000 10,980,630 8,375,000 (23.7%) 8,496,400 121,400 1,703,507 1,824,907 Irrigation System Improvement 1,757,032 1,073,252 845,123 1,621,504 91.9% 1,741,060 119,556 454,784 574,340 Total Capital Improvement $20,285,618 $64,234,156 $52,210,864 $64,889,845 24.3% $56,205,847 ($8,683,998) $22,266,443 $13,582,445 Contingency/Operating Reserves FRS/Capitol Theatre Reserve Risk Management Total Contingency/Operating Rsys $71,927 $71,927 $71,927 $71,927 0.0% $500 ($71,427) $180,495 $109,068 2,973,111 3,846,337 3,723,925 3,299,649 (11.4%) 3,360,000 60,351 944,666 1,005,017 $3,045,038 $3,918,264 $3,795,852 1 $3,371,576 (11.2%) $3,360,500 ($11,076) $1,125,161 $1,114,085 4 — Exhibits • Three -Year Budget Comparison 2012 2013 2013 2014 2014 2014 2014 2014 2014 Actual Amended Year -End Preliminary vs 2013 Projected Use of Fund Beginning Est. Ending Expenditures Budget Estimate Budget Estimate Revenue Balance Fund Balance Fund Balance Employee Benefit Reserves Unemployment Compensation $150,116 $293,796 $158,789 $286,582 80.5% $177,000 ($109,582) $377,159 $267,577 Employees Health Benefit 10,882,062 11,628,854 9,416,162 9,867,703 4.8% 9,158,200 (709,503) 3,779,413 3,069,910 Workers' Compensation 993,530 1,244,636 1,167,825 1,258,630 7.8% 1,033,000 (225,630) 1,028,264 802,634 Wellness/EAP Fund 56,208 120,200 120,200 171,600 42.8% 175,000 3,400 181,238 184,638 Firemen's Relief & Pension 1,292,617 1,347,493 1,234,967 1,259,308 2.0% 1,259,338 30 922,511 922,541 Total Employee Benefit Reserves $13,374,533 $14,634,979 $12,097,943 $12,843,823 6.2% $11,802,538 ($1,041,285) $6,288,585 $5,247,300 Trust and Agency Funds Cemetery Trust YakCorps Agency Fund Total Trust and Agency Funds $20,000 $5,500 $12,000 $12,000 0.0% $14,500 $2,500 $616,224 $618,724 187,672 511,700 511,700 610,671 19.3% 610,671 - 392,200 392,200 $207,672 $517,200 $523,700 I $622,671 18.9% $625,171 $2,500 $1,008,424 $1,010,924 Debt Service L.I.D. Guaranty $20,000 - n/a $50 $50 $60,214 $60,264 PFD Debt Service 1,018,253 1,017,000 1,017,000 1,015,650 (0.1%) 1,016,422 772 159,626 160,398 General Obligation Bonds 2,217,082 2,529,384 2,418,000 3,708,199 53.4% 3,522,969 (185,230) 264,284 79,054 L.I.D. Debt Service 211,908 285,000 255,000 245,000 (3.9%) 270,000 25,000 69,154 94,154 Water-Irrigation/Sewer Bonds 3,480,991 2,127,561 2,127,561 2,144,786 0.8% 2,146,286 1,500 1,758,712 1,760,212 Total Debt Service $6,948,234 $5,958,945 $5,817,561 I $7,113,635 22.3% $6,955,727 ($157,908) $2,311,990 $2,154,082 Total City Budget $168,495,529 I $220,259,049 $203,975,920 I $222,714,707 9.2% $209,634,706 ($13,080,002) $60,465,714 $47,385,712 WHAT YOU PAY AND WHAT YOU GET This section is presented to assist the reader in understanding the taxes they pay, what governmental entity receives those tax revenues and how the City spends their allocated portion. Enclosed, you'll find charts and graphs which identify how much of the taxpayers' dollar comes to the City and what percentage of the City's total revenues each type of tax/charge represents. Also included is (a) an outline of the City taxes and utility charges collected from a typical Yakima household; (b) a depiction of how those revenues are then distributed between the various City services/functions and (c) the amount a typical four person household pays for these services. MAJOR TAXES PAID Sales and Use Tax There is an 8.2% sales tax charged on the sale of goods within the City. The vast majority of this revenue is allocated to the State, not the City. The State receives 6.50% while the City receives .85% for the general fund and an additional .30% that is restricted for transit services. .15% goes directly to the County, and .40% represents countywide taxes for Criminal Justice that is allocated between Cities and the County. (Refer to the following chart for a complete detailed listing of how this revenue is allocated.) Following is an example of how the sales taxes paid by the consumer are allocated between the City and the State. Based on the assumption that a family with a taxable income of $40,000 will spend $10,000 on items on which sales tax will be applied, they will pay approximately $820 in sales taxes annually. Of this amount, 14.0% or approximately $115 goes to the City ($85 or .85% for general fund and $30 or 0.3% for transit services). The following chart depicts how much of each dollar of sales tax revenue is allocated to the State, the City and the County. ALLOCATION OF SALES TAX COLLECTION State of Washington 79.3e Yakima Transit 3.7e City of Yakima (General Fund) 10.3e County 6.7e What You Pay and What You Get • Exhibits — 5 SALES TAX RATES WITHIN YAKIMA CITY LIMITS (In descending order by total allocation) Percent Example Rate of Total $100 Sale State of Washington 6.50% 79.27% $6.50 City of Yakima (General Fund) (1) 0.85% 10.37% $0.85 Yakima Transit 0.30% 3.66% $0.30 Yakima County (Current Expense Fund) (1) 0.15% 1.83% $0.15 Yakima County Criminal Justice (2) 0.40% 4.88% $0.40 Total Sales Tax Rate in City Limits 8.20% 100.00% $8.20 (1) The City charges 1%; however, the county receives .15% of the cities' sales tax collections. (2) This tax is allocated among the cities and the county to support Criminal Justice uses. Property Taxes The total property taxes paid by property owners within the City of Yakima include taxes levied by several governmental entities: the State, School Districts, special county -wide voted levies and the City's general and special voter approved levies. The percentage of the total property taxes levied by, and allocated to, each individual governmental entity will change slightly from year to year. The City's portion is generally under 30% of the total amount collected. (Refer to the graph and chart below for how the 2013 property taxes were allocated between these governmental entities.) 2013 PROPERTY TAX DISTRIBUTION Yakima School District 0.37 m& add �i'., Mn State of Washington Schools 0.19 Library .04( City of Yakima .25( Yakima County .13( EMS .02( City of Yakima Property Tax — In 2013, a typical City resident pays approximately $12.92 per thousand of assessed value on property taxes. Only $3.12, or about 24.5%, goes to the City, with the balance divided between the County, schools, and other special districts. Description Of How Property Taxes Are Levied — The following explanation is included to help the reader understand how property taxes are assessed to the individual property owners. To aid in this explanation, three commonly used terms must be understood. They are Property Tax Levy, Property Tax Rate and Assessed Value. 6 — Exhibits • What You Pay and What You Get ➢ Property Tax Levy — is the total amount of money that is authorized to be collected. ➢ Property Tax Rate — is the property tax amount that will be applied to every $1,000 of assessed value; the rate is determined by simply dividing the levy amount by the total assessed value amount and dividing that number by 1,000. ➢ Assessed Value — is the total value, as determined by the County Assessor's Office, of all property within the City. All taxing jurisdictions annually set the levy (i.e. amount of tax) in accordance with the limitations set by state law. The County Assessor then takes the levied amount and divides it by total assessed value to arrive at the rate/$1,000. In other words, an increase in assessed value does not affect the total amount levied or collected by the governmental entity. Nor does it automatically affect the amount the property owner must pay. The dollar amount of the levy is restricted by law — the assessed value is simply the means to allocate the total dollars among the property owners. A change in one property owner's assessed value will affect his/her property tax bill only if the change is significant enough to change that property owner's percentage of the total assessed value of all property within the taxing districts. (Example: if the amount of property tax levied does not change from one year to the next, and every property owner's assessed value goes up 3%, there will be no change in the property tax owed by any of the property owners. This is due to the fact that everyone's assessed value increase by the same amount; therefore, every property owner's percentage of the total tax levy remained the same.) PROPERTY TAX CODE AREA #333 (YAKIMA SCHOOLS) — CONSOLIDATED LEVY AND RATES 2011 ASSESSED VALUATION — 2012 TAX YEAR Property Tax Levy Amount Percent 2012 2013 of Rate Levy Levy City Levy General Fund $1.8946 $10,410,000 Parks & Recreation 0.3298 1,812,000 Street & Traffic Operations 0.6681 3,671,000 Firemen's Relief & Pension 0.2169 1,192,000 Total Operating Levy 3.1094 17,085,000 24.1% Total Bond Levy 0.0541 107,230 0.4% Total City Levy $3.1635 $17,192,230 24.5% Other Levies Yakima School District #7 Operation & Maintenance 3.0385 16,457,971 36.4% Bond Redemption 1.6610 8,996,772 State Schools 2.5116 13,799,979 19.4% Library 0.4763 2,617,029 3.7% Yakima County 1.7493 9,611,524 14.2% Yakima County Flood Control 0.0903 496,153 Juvenile Justice Bond 0.0001 542 EMS Levy 0.2258 1,240,657 1.7% Total Other Levies 9.7529 53,220,627 75.5% Total Levy Code #333 $12.9164 $70,412,857 100.0% What You Pay and What You Get • Exhibits — 7 City Taxes and Utility Charges The taxes and utility charges shown in the following charts are only those directly levied by the City. In the cases of sales and property taxes, the 2 major taxes paid directly by Washington residents, only a small portion of the total tax belongs to the City. To illustrate what a typical household might pay, the following assumptions were made. Property tax based on $120,000 home; Sales tax based on $42,000 annual income and $10,500 taxable purchases; Utilities based on 96 gallon can for Refuse, 1,300 cubic foot monthly consumption for Water/Wastewater; Irrigation for 7,000 square foot lot; Stormwater based on impervious surface; Gas/electricity $3,000, telephone $1,200, cable television $1,200. Based on these assumptions, a typical household in Yakima paid approximately $218 a month, or $2,617 a year, as depicted in the following charts. ANNUAL TAXES AND UTILITY CHARGES LEVIED BY THE CITY OF YAKIMA ON THE TYPICAL HOUSEHOLD FOR 2012 Rate Cost Per Revenue Per 1,000 Household Property Taxes - General $3.0516/1,000 $371 Special Levy Property Taxes $0.0541/1,000 6 Sales Tax - General 121 Transit Sales Tax 32 Tax on City -owned Utilities - General 238 Tax on Private Utilities - General 324 Utility Charges (Water/Wastewater/Refuse) - Exc. Utility Tax 1,236 Stormwater 43 Irrigation Assessment 246 CITY TAXES AND UTILITY CHARGES COST TO TYPICAL HOUSEHOLD — $2,617 ANNUALLY Water $330 Irrigation $246 Refuse $189 ,11111111111111111111111111111111111111111111111111111111111111111111116 General Government $133 ,1111111111111111111111111111111111111111111111111111111111111111 Streets $58 Park $2,617 a pital Project Funds $52 Other $114 Other Special Revenue Funds 25 Wastewater $717 8 — Exhibits • What You Pay and What You Get Debt Service F $8 Public Safety $722 Special Levy Debt $6 GENERAL GOVERNMENT REVENUE The total 2014 proposed General Government Revenue Budget is approximately $66.1 million. The following chart breaks this dollar amount down by the source of the revenue. You'll note that three revenue sources — sales tax, property tax and franchise and utility taxes — generate 74.1% of the total general fund revenues. 26.9¢ Sales Tax ($17,790,000) GENERAL GOVERNMENT REVENUE (BASED ON 2013 BUDGET OF $66.1 MILLION) 23.2 Franchise & Utility Tax ($15,332,500) 5.5ct 4.3¢ Intergovernment & Other State Shared Revenue Revenue ($3,604,600) ($2,875,500) 24.0(t 11.4(t 4.7(t Property Tax Licenses, Permits Fines & ($15,899,000) & Charges Other Taxes for Services ($3,106,751) ($7,527,067) Note: The term "General Government" refers to basic tax supported functions. The major functions included in this category are: Police, Fire, Streets and Traffic Operations, Parks and Recreation and Municipal Court services. These functions use about 70.7% of General Government revenues. Other administrative services include Information Systems (i.e. computer support), Legal, Finance, Purchasing and Human Resources — services necessary for any organization to function. GENERAL GOVERNMENT EXPENDITURES The following chart depicts the breakdown of the proposed 2014 general government expenditure budget. This breakdown identifies that the City spends over $45.9 million (or 68.1%) of its available resources on providing public safety services (Police & Courts, Fire & Code Enforcement). Additionally, the City allocates over 7.0% of its resources to maintaining and operating the Streets and Traffic Systems and another 6.5% to provide Parks and Recreation programs and services. Providing the existing services in these four basic categories takes 81.5% of all the City's available general government resources. What You Pay and What You Get • Exhibits — 9 Providing the services in these four critical areas is labor intensive; approximately 70.2% of these costs are personnel related. Therefore, any significant budget reductions in these areas will require a reduction in personnel and the related services these individuals perform. Conversely, any significant reductions in the overall general government budget that do not include these four largest areas of the budget will severely limit the services the remaining departments will be able to provide (i.e.: Financial (including Information Technology), Legal, Community Planning and Project Engineering and Administration). Breaking down the City's general government budget by these major service areas and identifying the percentage of each available dollar that the City allocates to each of these areas provides the reader with a visual picture of where the focus and priorities of the City have been placed. Additionally, this chart will assist the reader in understanding the difficult challenges facing the City should it become necessary to implement a significant reduction in the City's proposed budget without affecting the public safety budget and services. GENERAL GOVERNMENT EXPENDITURES (BUDGET OF $66.6 MILLION - INCLUDES FIRE PENSION OF $1.3 MILLION) 45.8 ct Police & Courts $30,501,404 7.0¢ Streets & Traffic $4,664,411 6.5¢ Parks & Recreation $4,299,982 2.3¢ Community Planning Project Engineering $1,558,355 iY nazi Iilti . 1111 1;1,1; li). r �WFPr W�IIYr I^or A2 2123 1111' A fY)JJli��p 22.3ct Fire / Code Enforcement $14,839,192 5.Ict Financial & Legal Services $3,888,413 10.3 ¢ Governance/ Administration $6,868,498 Allocation of Expenditures Following is a detailed analysis of the City of Yakima's local tax structure. This analysis shows the various sources of City revenue and identifies what type of services these revenues will fund in 2014. Additionally, this analysis reflects the cost of each of these services to a typical household. The non -tax funding sources identified include all sources except directly levied taxes (shown in the adjacent column) which are property, sales and utility taxes. The non -local tax amounts are made up of direct charges for services, state shared revenues, grants, interfund charges, beginning balances, and other miscellaneous sources. 10 — Exhibits • What You Pay and What You Get Municipal public safety services consume the greatest share of local taxes, $722 per household per year, or 68.5% of the total general taxes paid. Other General Government services cost $133 per household annually, or 12.6%. Streets and Parks together cost $115 per household annually, or 10.8% of general taxes paid. The Refuse, Water and Wastewater utilities combine to cost approximately $1,236 annually per household. (Many of the costs included in the budgets of the utilities fund State and Federal mandates that local citizens must pay.) ALLOCATION OF TAXES AND UTILITY CHARGES (BASED ON 2013 PROPOSED BUDGET - BUDGET NUMBERS IN THOUSANDS) Tax Supported Functions 2014 2014 Non -Tax Allocation Household Permanent Proposed Funding Local of Taxes Typical Budgeted Budget Sources Taxes Collected Cost(1) Positions Local Direct General Purpose Tax Supported Functions Public Safety (Police Fire & Pensions) $45,520 $7,065 $38,455 68.5% $722 332.1 General Government 17,714 10,637 7,077 12.6% 133 134.4 Streets Department 4,786 1,714 3,072 5.5% 58 32.0 Parks Department 4,412 1,403 3,009 5.4% 56 21.3 Other Special Revenue Funds 3,715 2,395 1,320 2.4% 25 15.0 Debt Service Funds 2,807 2,379 428 0.8% 8 0.0 Capital Project Funds 14,484 11,733 2,751 4.9% 52 0.0 Local Direct Special Purpose Tax Supported Functions Special Levy Debt 540 433 107 - 6 0.0 Transit Division 9,989 5,089 4,900 - 32 54.0 Non -Local Tax Supported Functions Street Construction 6,729 6,729 - - 0.0 Refuse -18,767 Residential accounts 5,671 5,671 - - 189 20.5 Wastewater -22,591 Residential accounts 34,771 34,771 - - 717 61.5 Water -17,349 Residential accounts 13,583 13,583 - - 330 35.0 Equipment Rental 5,672 5,672 - - 12.0 Public Works Administration 1,169 1,169 - - - 9.0 Self-insurance Reserve 5,038 5,038 - - - 0.0 Employee Benefit Reserve 10,039 10,039 - - 0.0 Irrigation -10,541 Residential accounts 4,008 4,008 - - 246 7.0 PBIA 253 253 - - 0.0 Storm Water 3,116 3,116 - - 43 7.7 Airport 12,200 12,200 - 7.0 Totals $206,216 $145,097 $61,119 100.0% $2,617 748.4 Based on 2014 cost for a typical four person household: Property tax based on $120,000 home; sales tax based on $42,000 annual income and $10,500 taxable purchases; utilities based on 96 gallon can for refuse, 1,300 cubic foot monthly consumption for water/wastewater; irrigation for 7,000 square foot lot; gas / electricity $3,000, telephone $1,200, and cable TV $1,200. What You Pay and What You Get • Exhibits -11 TAX BURDEN — FEDERAL VS. LOCAL The Tax Foundation of Washington D.C. publishes a Special Report each April, called "America Celebrates Tax Freedom Day". This is when Americans will have earned enough money to pay off their total tax bill for the year. Taxes at all levels of government are included, whether levied by the federal government or state and local governments. Tax Freedom Day in 2013 fell on April 18th, five days later than it did in 2012, due mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll. On average in 2013, Americans will work 69 days to afford their federal taxes and 38 more days to afford state and local taxes. As the economic recovery continues, the growth in individual incomes and corporate profits will increase tax revenues and push Tax Freedom Day ever later in the year. The total tax burden borne by residents of different states varies considerably, not only due to differing state tax policies, but also because of the progressivity of the federal tax system. This means higher -income states celebrate Tax Freedom Day later than lower-income states. The report indicates that Washington State was ranked 9th highest in the nation for overall per capita taxes paid in 2012. This demonstrates that Puget Sound, with a higher cost of living and commensurately higher salaries, generated high federal income tax payments. (Some of the wealthiest people in the world live in Washington State.) However, estimated at 9.3% of income, Washington's state and local tax burden percentage ranks 29th highest nationally, below the national average of 9.8%. It also demonstrates how small the state and local tax burden is in comparison to the total taxes paid — at roughly one third of the total tax burden (currently at 29.2%). For the most part, local taxes cost the least and provide citizens with the services they need and care about the most — they have the most direct bearing on their quality of life. This is also the level where citizens are most empowered to affect government policy and monitor accountability. There are per capita comparisons presented in the Budget, which contrasts the City of Yakima with other similar cities in Washington State. Yakima is consistently below the average in per capita taxes. 12 — Exhibits • What You Pay and What You Get EXHIBIT III — SUPPLEMENTAL INFORMATION TABLE OF CONTENTS CRIMINAL JUSTICE Criminal Justice Costs General Government Budgets Criminal Justice Sales Tax SALARY AND BENEFIT COSTS Costs to Total Budget Operating Funds RESOURCE AND EXPENDITURE BREAKDOWN Graphic Portrayal Total Resources — by Category Total Resources — by Category and Source Total Expenditures Supplemental Information • Exhibits —13 CRIMINAL JUSTICE This analysis compares Criminal Justice expenditures to other General Government costs. Criminal Justice costs include: Police Department (including jail costs); Police Pension; Court and Probation costs; Prosecution and Indigent Defense (included in the Legal Department budget) and forty percent of Information Systems budget (the amount dedicated to Law and Justice support). This category also includes one-half of the transfer from the General Fund to the Public Safety Communications Fund for Dispatch and the transfer from the General Fund to Debt Service funds to repay debt borrowed for Criminal Justice purposes. This graph reflects the City's efforts to meet Council's Strategic Priorities. Public safety has been a high priority focus of City Council for the last two decades. GENERAL GOVERNMENT BUDGETS (1) LAST TEN YEARS 2005 2006 2007 2008 Amended Amended Amended Amended Budget Budget Budget Budget General Fund Criminal Justice $20,794,116 $22,857,422 $25,014,331 $26,935,856 Other 17,862,426 19,557,208 18,856,452 19,782,839 Parks & Recreation 3,905,396 4,074,592 4,199,143 4,420,906 Street/Traffic 5,273,574 5,522,653 5,907,882 6,213,833 Total $47,835,512 $52,011,875 $53,977,807 $57,353,434 Consumer Price Index June June June June 2004 2005 2006 2007 190.4 194.8 203.8 210.6 (1) Excludes double budgeted transfers between general government funds 14 — Exhibits • Supplemental Information COSTS VS. OTHER GENERAL GOVERNMENT FUNCTIONS Parks & Recreation $4,412,448 7.1% Street/Traffic $4,786,409 7.7% Criminal Justice $31,931,151 51.3% Other $21,158,029 34.0% 2009 2010 2011 2012 2013 2014 2014 Amended Amended Amended Amended Amended Preliminary VS 10 Year Budget Budget Budget Budget Budget Budget 2013 Increase $28,471,541 $27,554,732 $28,192,940 $29,522,541 $31,849,983 $31,931,151 0.3% 59.2% 20,240,301 19,912,799 19,279,670 19,343,517 19,727,486 21,158,029 7.4% 21.1% 4,249,796 4,133,782 4,042,938 4,048,697 4,132,425 4,412,448 6.9% 15.1% 5,686,692 5,308,117 5,218,691 5,199,157 5,490,823 4,786,409 (13.5%) (2.0%) $58,648,330 $56,909,430 $56,734,239 $58,113,912 $61,200,717 $62,288,038 1.9% 34.7% June June June June June June 10 Year 2008 2009 2010 2011 2011 2012 Increase 223.6 219.9 221.7 227.5 236.2 239.0 25.5% Supplemental Information • Exhibits —15 CRIMINAL JUSTICE SALES TAX - .3% EXPENDITURES AND REVENUES 2013 2014 2010 2011 2012 Year -End Proposed Actual Actual Actual Estimate Budget General Fund Police Department Salaries & Benefits (includes overtime) $659,059 $671,542 $704,378 $702,241 $715,539 Miscellaneous (uniform/fuel/travel) 31,592 14,639 13,345 50,000 50,000 Liability Insurance 7,322 7,542 8,296 8,877 9,498 Professional Services/R&M Contractors 0 0 75 0 5,000 Yakima County Jail Cost 436,612 350,000 479,692 380,000 422,000 Total Police Department 1,134,585 1,043,723 1,205,786 1,141,118 1,202,037 The .3% Criminal Justice funds support six full time Patrol Officers including, all wages, overtime, uniforms, supplies, insurance and training expenses. Additionally, these funds are used for repairs, maintenance, communications and fuel used for additional patrols. A portion of the increased Jail costs are also paid out of this fund. Municipal Court Salaries & Benefits (includes overtime) 165,745 145,841 142,074 165,776 208,857 Professional Services 33,633 30,722 38,922 45,000 45,000 Miscellaneous (office supplies/travel/dues) 5,513 0 1,259 5,000 5,000 Total Municipal Court 204,891 176,563 182,255 215,776 258,857 The Criminal Justice funds support two Municipal Court Clerk positions and a half-time Court Commissioner including all wages, overtime, supplies and training. Additionally, this fund supports building security, interpreter services and witness and juror fees associated with processing the court's case load. Legal Dept Salaries & Benefits (includes overtime) 153,382 154,948 166,771 186,877 182,465 Professional Services 4,576 0 70 3,000 5,000 Miscellaneous (office supplies/travel/dues) 2,296 3,086 1,878 3,350 8,750 Total Legal Department 160,254 158,034 168,720 193,227 196,215 The .3% Criminal Justice Sales Tax is being used to supplement criminal justice functions throughout Yakima County. This money fully funds one Legal Assistant If position, one Assistant City Attorney If position including mandatory continuing legal education expenses and dues and subscriptions for required Associations. Information Systems Salaries & Benefits (includes overtime) 28,061 22,191 29,016 16,619 16,734 Miscellaneous 22,411 100 0 57 57 Professional Services/R & M Contractors 0 39,692 91,256 94,600 119,400 Total Information System 50,472 61,983 120,272 111,276 136,191 The portion of the .3% Criminal Justice Sales Tax allocated to Information Systems is used to enhance the effectiveness of the law enforcement and other Criminal Justice personnel through the expanded use of technology. Currently, the emphasis is on mobile technology for the patrol officers. A portion of these funds are budgeted for temporary salaries used to support the mobile computing and technology infrastructure that has been expanded and enhanced through Criminal Justice Tax over the last several years. YAKCORPS member fees have been added to this budget in 2012. 16 - Exhibits • Supplemental Information Animal Control/Codes Salaries & Benefits (includes overtime) Misc (uniforms/supplies/fuel/cell phone) Total Animal Control/Codes 2013 2014 2010 2011 2012 Year -End Proposed Actual Actual Actual Estimate Budget $67,264 $66,212 $68,644 $72,321 $70,190 1,446 6,841 8,892 10,000 10,467 68,710 73,053 77,536 82,321 80,657 The .3% Criminal Justice Funds support one full-time Animal Control Officer including all wages, overtime, supplies and communication necessary for this position. Human Resources Professional Services (employee recruitment) 6,000 3,250 3,250 6,500 6,500 The .3% Criminal Justice funds are used to provide for contract services, testing and other necessary recruitment costs for positions funded by the criminal justice sales tax. General Fund Total Expenditures $1,624,912 $1,516,606 $1,757,819 $1,750,218 $1,880,457 Other Funds Public Safety Communication Salaries & Benefits (includes overtime) $142,863 $159,287 $139,930 $177,408 $174,364 Small Tools & Equipment 0 0 Total Public Safety Communication 142,863 159,287 139,930 177,408 174,364 Criminal Justice funds allocated to this department are used for additional positions necessary to accommodate the increased workload generated by law enforcement activities. These funds provide for two full-time Dispatcher and temporary support for Police. Law & Justice Small Tools & Equipment 15,268 2,867 Operating Equipment 5,365 1,618 44,179 96,500 26,000 Total Law & Justice 20,633 4,485 44,179 96,500 26,000 The .3% Criminal Justice funds support Capital expenses related to the new positions, technology and services created with this tax. Total Expenditures $1,788,408 $1,680,378 $1,941,927 $2,024,126 $2,080,821 Revenue $1,789,171 $1,831,296 $1,935,069 $2,021,000 $2,081,000 Revenue over (Under) Expenditures $763 $150,918 ($6,858) ($3,126) $179 Cumulative Balance $470,147 $621,065 $614,207 $611,080 $611,259 Supplemental Information • Exhibits -17 SALARY AND BENEFIT COSTS COSTS TO TOTAL BUDGET The following chart represents the relationship of the City's salary and benefit costs to total budget for General Government and other funds of the City. The City's General Fund ranks in the top three with salary and benefit costs, representing 68.9% of total fund expenditures. However, employee compensation and benefit costs for an individual department within the General Fund as a percentage of its total costs range from 26.6% to 94.6%. In several departments (including Police, Legal and Information Systems) if contracted services were excluded, the percentage of salary and compensation costs as a percentage of the division total costs would be considerably higher than what is depicted on the following chart. Parks, Streets and other operations for the most part are more capital intensive, and the ratio of salary and benefits to total costs are representative of that type of operation. Section I includes an analysis based on information gathered by the State Auditor's Office. The chart in this section identifies the per capita salary costs for Yakima and 11 other comparable cities, and indicates that: ➢ The City of Yakima spends, on the average, $44 less per capita on salaries than other comparable cities, even though we are a full service city providing Refuse, Irrigation and Transit while most other cities do not directly provide these functions. ➢ Yakima employs fewer people per capita than other cities. To minimize the number of regular employees and to maintain service levels during periods of peak workload demands, the City uses contract and temporary labor when feasible. 18 — Exhibits • Supplemental Information OPERATING FUNDS SALARIES & BENEFITS AS A PERCENTAGE OF TOTAL DEPARTMENT/FUND BUDGET 2014 2014 Salaries & Labor General Government Budget Benefits Percentage Police $26,057,587 $19,359,662 74.3% Fire 10,167,258 8,507,692 83.7% Information Systems 2,912,612 2,081,732 71.5% Financial Services 1,488,836 1,307,658 87.8% Utility Services 1,316,181 972,629 73.9% Municipal Court 1,344,118 1,105,517 82.2% Code Administration 1,537,371 1,166,631 75.9% Legal 1,314,323 1,172,379 89.2% Engineering 1,109,632 1,031,475 93.0% Environmental Planning 458,481 413,673 90.2% City Manager 372,684 333,484 89.5% Purchasing 549,369 519,616 94.6% Human Resources 513,151 366,898 71.5% Records 563,922 310,384 55.0% Economic Development 486,733 254,733 52.3% City Hall Maintenance 407,885 146,786 36.0% Gang Free Initiative 333,105 88,618 26.6% City Council 282,076 102,800 36.4% Other General Fund Expenditures 5,721,131 0 0.0% Total General Fund $56,936,455 $39,242,367 68.9% Parks & Recreation 4,412,448 2,162,443 49.0% Street & Traffic Operations 4,786,409 2,349,744 49.1% Total General Government $66,135,312 $43,754,554 66.2% Economic Development 456,622 172,887 37.9% Community Development 1,766,938 514,014 29.1% Community Relations 601,850 412,904 68.6% Cemetery 278,900 167,535 60.1% Emergency Services 1,339,282 973,934 72.7% Public Safety Communications 3,218,239 2,526,670 78.5% Police Grants 469,024 232,593 49.6% Airport 1,037,370 578,096 55.7% Stormwater 2,325,519 732,615 31.5% Transit 8,240,033 3,826,041 46.4% Refuse 5,670,633 1,389,749 24.5% Wastewater Operating 20,213,432 5,143,215 25.4% Water Operating 9,022,649 2,440,269 27.0% Irrigation Operating 2,063,884 650,058 31.5% Unemployment Comp Reserve 286,582 24,911 8.7% Employment Health Benefit Reserve 9,867,703 109,614 1.1% Workers Compensation Reserve 1,258,630 93,386 7.4% Risk Management Reserve 3,299,649 635,067 19.2% Equipment Rental 5,671,800 884,866 15.6% Public Works Administration 1,168,866 581,026 49.7% Other Funds (Capital/Debt Serv. etc) 78,321,790 0 0.0% Total City-wide Budget $222,714,707 $65,844,004 29.6% Supplemental Information • Exhibits -19 RESOURCE AND EXPENDITURE BREAKDOWN GRAPHIC PORTRAYAL OF CITY RESOURCE CONSUMPTION The purpose of this section is to graphically present total City resources by category, and distribute them by function and type of expenditure for the 2014 budget year. This "flow of resources" concept is designed to give the taxpayer a basic understanding of how tax dollars and other revenues are spent in the City. Interfund transactions have been eliminated (i.e., those items that flow out of one fund and into another; these are referred to as double budgeted items) in order to portray only external revenue sources available to the City. The broad revenue categories are based upon the State of Washington's mandated accounting structure. A definition of the terms is included below: Borrowings — Proceeds from long-term debt issued by the City. In 2014 this includes primarily a revenue bond for Councilmanic general Obligation bonds for street improvements and Public Works Trust State Revolving Fund loans for utility capital needs. Capital Reserves — Accumulated fund balances set aside for specific capital projects. Charges for Services — Fees charged to outside users to cover the cost of providing services (e.g. utility rates, golf course and swimming pool fees, transit fare box revenues). Intergovernmental Revenues — Revenues received from other governmental agencies (i.e. federal, state, and county). This category includes primarily grants and state -shared revenues (such as gas and liquor tax revenues). Operating Reserves — Accumulated fund balances in operating funds. Prudent reserves generally are a minimum 8-16% of annual operating budgets. Other — All revenue sources which are not included in other categories. This includes primarily investment income, program income, fines and forfeitures, and licenses. Taxes — Tax assessments are levied for the support of the governmental entity. Sales tax is the largest item in this category. It is followed by property tax, utility and franchise taxes, and various other business taxes. The first graph identifies the total revenue picture by category. The second revenue graph depicts the relationship of the various revenue sources to each function. Lastly, included is a graphic by major object (or type) of expenditure, net of double budgeted expenditures. 20 — Exhibits • Supplemental Information CRY OF (Yakima TOTAL RESOURCES BY CATEGORY 2014 BUDGET TOTAL RESOURCES = $222,641,573 (Excludes Internal Service Funds and other double budgeted resources of $47,458,844) Operating Reserves $25,214,548 11.3% Capital Reserves $24,025,155 10.8% Other $9,611,859 4.3% Taxes $61,119,229 27.5% Borrowings $25,929,800 11.6% Charges for Services $43,261,809 19.4% Intergov't $33,479,173 15.0% Supplemental Information • Exhibits — 21 Police & Fire Gen Government Parks & Recreation Street Operations Street Construction Gen Govt Const G.O. Debt Service Special Revenue Transit Airport Utilities CRY OF (Yakima TOTAL RESOURCES BY CATEGORY AND SOURCE 2014 BUDGET 1 i i pr 7 HI • ($10.00) $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 • Taxes • Intergov't • Charges ■ Borrowings • Operating • Capital ■ Other for Services Reserves Reserves 22 — Exhibits • Supplemental Information CRY OF (Yakima TOTAL EXPENDITURES BY TYPE 2014 BUDGET TOTAL EXPENDITURES = $179,702,865 (Excludes double budgeted expenditures of $43,011,842) Debt Service $10,247,611 5.7% Salaries $52,827,671 Capital 29.4% $58,729,093 '111132.7% 1 Intergov't $3,438,109 1.9% Other Services $28,697,012 16.0% Supplies $8,130,403 4.5% Benefits $17,632,966 9.8% Supplemental Information • Exhibits — 23 24 — Exhibits • Supplemental Information 11 Distributed It he Meeting City of Yakima — Strategic Initiatives in the 2014 Budget-- -- — Public Safety Expand Police Force Presence and ✓ Expand Police vehicle take-home program Response Capacity. ($798,000 - funded ✓ 74 new equipped patrol vehicles mid -year 2013) ✓ Additional Fleet Maintenance Specialist ✓ Police Union deferred wage increases for 2 years to help pay for program Eliminate Fire Service Brownouts and ✓ Reorganization eliminates Battalion Chiefs - Enhance Fire Department Training. creates Shift Commanders ($528,900 - 2014) ✓ Reinstates 2 Firefighters and 1 Training Lint ✓ Restores Overtime to pre -recession levels ✓ Adds $75k for training Expand Police Downtown Bike/Foot ✓ Addresses citizen safety concerns Patrols. ($64,800 - 2014) ✓ Adds patrols for coverage March -October Purchase New Fire Brush Truck. ✓ Replaces 23 year old truck ($130,000 - 2014) Invest in Police Training. ($75,000 - 2014) ✓ Addresses succession planning -management skill training Indigent Defense. ($600,000 budgeted ✓ New caseload limit rule deferred until 2015- 2013, continued into 2014) will likely need $360k more in 2015 Gang Free Initiative Operation Manager. ✓ Visioning/planning stage wrapping up ($88,600 - 2014) ✓ Transitioning to contract management ✓ Adding 1 FTE to report to City Manager Automated License Plate Reading ✓ Provides new system for 8 police vehicles Technology. ($135,000 - 2014) ✓ Goal to reduce auto theft trends Parking Enforcement Officer. ($56,800 - ✓ Reinstates 1 FTE to adequately cover area 2014) ✓ Estimate $40k of additional ticket revenue Communications/Dispatch ✓ Reinstates separate Information Technology Reorganization. ($142,200 - 2014) and Public Safety Communication Managers ✓ Electronics unit moved into IT Communication Center ✓ Outgrowing current 911 and City's Construction/Relocation - ($195,000 - dispatching space in the Law and Justice Ctr. 2014; Future years est. $630,000) ✓ Est. $7.2 million to remodel County restitution center in Union Gap ✓ Future costs split 43% - 911 board; 57% City Economic Development Downtown Retail/Master Plan. ($170,000 ✓ Proposed Plaza follow-up/design - $145k - 2014) ✓ Retail development - $25k Downtown Special Events. ($110,000 total ✓ Goal to elevate quality and quantity of budgeted - 2014) Downtown events Airport Marketing & Terminal ✓ Promote air service at the Yakima Air Improvements. ($150,000 - 2014) Terminal -goal to secure 4th daily flight ($100k) ✓ Invest $50k in aging terminal -carpet & paint City of Yakima - Strategic Initiatives in the 2014 Budget Cascade Mill Site. ($2,400,000 - 201.4 Funding - :` ✓ Develop final plans for Cascade Mill Parkway $1,000,000 State LIFT ✓ Right-of-way acquisition for infrastructure Possible grants ✓ Clean-up old City landfill site -Wood waste $1,850,000 SLED funding available removal and Remedial Action Plan with City Match -right of way donation Dept of Ecology ✓ Complete a Land Use study Built Environment Road Improvements. ($16,500,000 project; ✓ Result of voted change to City Charter $2,000,000 debt service / - voter approved ✓ Goal to improve Paving Condition Index mid -year 2013) ✓ Staff recommendation -bond entire amount - 10 -yr term gets $16.5m program -improves 92 land miles in first two years ✓ $2.0m for debt service- 10 -yr term Airport Taxiway/Airfield Lighting ✓ Two grants by FAA -$10m Improvements. ($11,100,000 - 2014) ✓ Local match -Airport Passenger Fees -$1.1m ✓ To maintain taxiways to FAA standards Streets Right-of-Way/Street Cut ✓ Develop comprehensive right-of-way Program. (Revenue $150,000 - 2014) encroachment and street cut program ✓ Reinstated Supervising Traffic Engineer will help oversee the program ✓ Revises permitting fee structure ✓ Goals -reduce time in ROW; improve traffic safety; and protect City infrastructure North 1St Street Improvements. ✓ $2,718,000 grant from Surface Transportation ($1,200,000 - 2014: $1,518,000 - 2015) Program ✓ Design landscape & pedestrian improvements; underground utilities ✓ Will take next 2 years to complete Graffiti Abatement Coordinator. ($50,000 ✓ Improve visual quality of the City - Mid -Year 2013) ✓ Organize timely removal of graffiti sites Stormwater, Wastewater & Industrial ✓ Conduct utility rate studies Waste studies. ($110,000 - 2014) Reinstate Supervising Traffic Engineer. ✓ Address deferred workload - i.e. traffic ($94,100 - 2014) signal timing patterns; traffic data collection, including high accident locations, etc. Expand Code Enforcement. ($100,000 - ✓ Adds 2 Code Enforcement Officers as of 2014) 4/1/14 - Arinualized cost $133k ✓ Address low marks on citizen survey ✓ Goal to provide pro -active code enforcement Implement Integrated Stormwater Plan. ✓ Start implementation of Stormwater ($600,000 - 2014) Collection System Master Plan City of Yakima - Strategic Initiatives in the 2014 Budget Installation of Biosolids Dryer. ($4,700,000 — 2014 / Total - $7,900,000) ✓ Goal to produce Class A high quality biosolid product to sell as fertilizer ✓ Defers $8-$10m digester project ✓ Funded by Dept of Ecology loans ✓ Annual operating savings of $210k ✓ Debt service of $480k — $210k = $270k net Wastewater Collections Master Plan. ✓ Wastewater pipeline capacity and condition ($100,000 — 2014) analysis underway since 2010 ✓ Data to be used to develop Master Plan ✓ Goal to identify improvements to maintain service and ensure capacity for growth Pedestrian/Bicycle Connectivity Plan. ✓ Map existing sidewalks and bicycle lanes ($40,000 — 2014) ✓ Design a plan to connect routes Pilot Recycling Program. ($40,000 — 2014) ✓ Conduct a small (500-600 household) low- cost curbside recycling pilot program City Hall Improvements. ($200,000 — V Customer -focused interior improvements 2014) ✓ Update appearance, lighting, ADA access Partnership Development Capitol Theatre Upgrades. ($140,000 ✓ Goal to address deferred maintenance capital, keep CTC Management Fee at ✓ 2014 focus on ADA and priority safety $232,000 — 2014) upgrades Convention Center Mgmt Fee Increase. ✓ 2% increase to address operational needs ($13,900 increase to $708,200 — 2014) and support marketing efforts of Center YPAL ($50,000/City — 2014 plus possible ✓ City committing $50k annually for 5 yrs to $50,000 in private donations) improve the YPAL Center at Miller Park ✓ Potential local match ✓ New windows, paint, floors ✓ Upgrade Classrooms and restrooms New Vision. ($33,000 — 2014) ✓ Increase $3k for new business development Southeast Community Center ✓ Currently contracted to OIC for operations Improvements. ($45,000/City/Materials — ✓ Upgrade restrooms 2014: OIC providing labor for upgrades) ✓ City provides materials—OIC provides labor Yakima Valley Visitors & Convention V City support has been unchanged since 2004 Bureau: Visitor Information Center V Increase $20k to cover operating expenses Maintenance. (Additional $20,000 — 2014: ✓ Goal to make a great "first impression" Total Budget $60,000) City of Yakima - Strategic Initiatives in the 2014 Budget Public Trust & Accountability Capital Improvements. ($50,100,000) V ✓ Addresses infrastructure needs in Streets, Wastewater, Water, Irrigation, Stormwater, Airport Equipment replacement in Transit, ER&R Quality Customer Service Academy. ($50,000 - 2014) ✓ ✓ "Train the Trainer" program 15-20 employees to be trained in 2014 Annual Citizen Survey. ($35,000 in 2013 - funding continued into 2014) ✓ Continue citizen feedback—track progress and ensure focus on priorities Annual Employee Survey. ($13,000 in 2013 -funding continued into 2014) ✓ Continue employee feedback—leverage strengths and address opportunities to create a higher performing organization PROPOSED 2014 BUDGET HIGHLIGHTS > The Budget is Balanced and Prudent at $222 million > Responsive to City Council's Strategic Priorities and Community's Citizen Survey by ensuring a safe community, economic growth, and improved community infrastructure and appearance > It proposes small property tax increases; and living within existing resources > Enhances Core Services (police, fire) > Invest in Capital Infrastructure - $65 M > Maintains Adequate Operating Reserve of $47.4 million or 21% for all funds and $11 million or 16.7% of annual General Government Fund Operating Reserve > Uses $13.1 million excess reserves primarily for Capital improvements > Lowers Personnel Costs by 2% of total General Government Fund cost 2014 PROPOSED BUDGET General Government Enterprise & Non -General Gov't Total Proposed Budget 2013 Year- end Estimate $62,896,187 141,079,763 $203,975,950 2014 Budget $66,135,312 156,579,395 $222,714,707 9% % Change 50/0 11% 2014 PROPOSED BUDGET Summary of Proposed FY 2014 Budget (All Funds - numbers in millions) Est. 2014 Estimated Beginning 2014 2014 Use of 2014 Ending Fund Balance Revenue Expenditure Reserves Fund Balance General Fund $9.2 $57.2 $56.9 ($0.2) $9.5 Parks and Recreation 0.7 4.4 4.4 0.1 0.6 Street & Traffic Operations 1.2 4.6 4.8 0.2 1.0 General Government Subtotal 11.1 66.1 66.1 (0.0) 11.1 Utilities/Other Operating 16.4 64.5 67.7 3.2 13.2 Capital Improvement 22.3 56.2 64.9 8.7 13.6 Risk Management Reserves 1.1 3.4 3.4 0.0 1.1 Employee Benefit Reserves 6.3 11.8 12.8 1.0 5.2 G.O. Bond Debt Service 0.6 4.8 5.0 0.2 0.4 Utility Revenue Bond Debt Service 1.8 2.1 2.1 (0.0) 1.8 Trust and Agency Funds 1.0 0.6 0.6 (0.0) 1.0 Total $60.5 $209.6 $222.7 $13.1 $47.4 2014 PROPOSED EXPENDITURE BUDGET $222.7 Million Capital Improvement $64.9 29.1% Utilities/Other Operating $67.7 30.4% G.O. Bond Debt Risk Management Service Reserves Employee $5.0 $3.4 Benefit 2.2% 1.5% Reserves $12.8 Utility Revenue 5.8% Bond Debt Service /'------ $2.1 1.0% Parks and Street & Traffic Recreation Operations $4.4 $4.8 2.0% 2.1% Trust and Agency Funds $0.6 0.3% General Fund $56.9 25.6% 2014 GENERAL GOVERNMENT EXPENDITURES BY DEPARTMENT $66.1 Million Fire $10.0 15.2% City Management $6.0 9.1% Legal $1.3 2.0% Municipal Court $1.3 2.0% Finance $8.0 12.1% Community Development $2.4 3.6% Utilities & Engineering Police $1.1 $27.0 1.7% 40.8% Public Works $9.0 13.5% 2014 GENERAL GOVERNMENT EXPENDITURES BY CLASSIFICATION $66.1 Million Salaries & Benefits $46.6 70.4% Supplies $2.7 4.0% Other Services & Charges $6.8 10.4% Intergov't Fund Services $6.8 10.3% Capital Outlay $0.0 0.1% Interfund Payments for Service $2.2 3.3% Debt Service $1.0 1.5% GENERAL GOVERNMENT REVENUE BUDGET OVERVIEW > Started with Projected 2014 Deficit in excess of $4 m > Major Budget Balancing Strategy ■ 2% Vacancy rate ■ Position attrition / vacancy ■ Health Plan ■ Jail contract > Revenue Assumptions ■ Proposed 1% inflation adjustment in property taxes plus an estimate of 0.7% new construction ■ 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 $950,000 $175,000 $1,000,000 $324,000 $285,000 $720,000 $777,500 $904,000 $150,000 CITY COUNCIL STRATEGIC PRIORITIES Public Safety Investments • Expand Police Force Presence and Response Capacity. ($798,000 — funded mid -year 2013) • Eliminate Fire Service Brownouts and Enhance Fire Department Training. ($528,911 — 2014) • Expand Police Downtown Bike/Foot Patrols. ($64,800 -2014) • Purchase New Fire Brush Truck. ($130,000 — 2014) • Invest in Police Training. ($75,000 — 2014) • Indigent Defense. ($600,000 — 2014) • Gang Free Initiative Operation Manager. ($88,600 — 2014) • Automated License Plate Reading Technology. ($135,000 — 2014) • Parking Enforcement Officer. ($56,800 — 2014) • Communications/ Dispatch Reorganization. ($142,200 — 2014) CITY COUNCIL STRATEGIC PRIORITIES Economic Development Investments • Downtown Retail/Plaza Conceptual. ($170,000 - 2014) • Downtown Special Events. ($110,000 - 2014) • Airport Marketing & Terminal Improvements. ($150,000 - 2014) • Cascade Mill Site. ($2,400,000 / $1,400,000 funded via LIFT — 2014) CITY COUNCIL STRATEGIC PRIORITIES Built Environment Investments • Road Improvements — 92 lane miles ($18,500,000 — 2014) • Airport Taxiway / Airfield Lighting Improvements ($11,100,000 — 2014) • Martin Luther King Jr. Railroad Grade Separation ($4,900,000 — 2014) • Streets Right -of -Way / Street Cut Program (Revenue $150,000 — 2014) • North 1st Street Improvements ($1,200,000 — 2014: $1,518,000 — 2015) • Graffiti Abatement Coordinator ($50,000 — Mid -Year 2013) • Stormwater, Wastewater & Industrial Waste studies ($110,000 — 2014) • Add Supervising Traffic Engineer ($94,100 — 2014) • Expand Code Enforcement ($100,000 — 2014) • Implement Integrated Stormwater Plan ($600,000 — 2014) • Installation of Biosolids Dryer ($4,700,000 in 2014; $3,200,000 in 2015) • Wastewater Collections Master Plan ($100,000 — 2014) • Pedestrian / Bicycle Connectivity Plan ($40,000 — 2014) • Pilot Recycling Program ($40,000— 2014) • City Hall Improvements ($200,000 — 2014) • Wastewater Collections System — Beech Street ($2,000,000 — 2014) • Water Treatment Plant Lagoons ($2,100,000 — 2014) CITY COUNCIL STRATEGIC PRIORITIES Partnership Development Investments • Capitol Theatre Upgrades / Management fee ($372,000) • Convention Center Mgmt Fee (Additional $13,900 — 2014: Total Budget $708,200) • YPAL Center Improvements ($50,000 - 2014) • New Vision ($33,000 - 2014) • Southeast Community Center ($45,000 - 2014) • Visitors Information Center (Additional $20,000 — 2014: Total Budget $60,000) CITY COUNCIL STRATEGIC PRIORITIES Public Trust & Accountability • Capital Improvements ($64,900,000) • Quality Customer Service Training ($50,000 — 2014) • Annual Citizen Survey ($35,000 - 2014) • Annual Employee Survey ($13,000 - 2014) FY 2014 BUDGET SUMMARY > Started with $4 million projected deficit > Balanced budget > Focus on core services and Strategic Priorities > Infrastructure investments of $64.9 million for roads, utilities and rolling stock > No service reductions Distributed at he 7 Meeting / l' '(3 MEMORANDUM To: Honorable Mayor and Members of the Yakima City Council From: Dave Ettl, Council Member Date: December 12, 2011 Re: budget proposal — REVISED Hello fellow City Council persons. I have a pre -LAST -meeting -of -the -year proposal for your consideration. I plan to make a motion at tomorrow's meeting and because of its potential impact on the future; I didn't want it to catch you off guard. As it stands now we have approved a 6% utility tax increase that will raise $2 million a year and will basically just maintain the status quo in terms of service to City residents. I am of the belief that such an increase in tax, without an upgrade in service, should be voted on by the public. I believe Bill Lover expressed a similar concern at the last meeting. Rick Ensey has indicated his interest in overturning the vote next year because he doesn't believe the people want it or can afford it. We hear over and over "live within your means". Rick has indicated he has Sara Bristol's agreement. Is Rick right? Is that what people want? I am willing to find out. Will the residents be willing to vote to overturn the utility tax increase for no increase in service? I believe they will. I think most of us believe that such a vote would fail at the polls. I don't know if I would join a Council vote to overturn the tax or not because I PREFER a citywide vote on the issue as I have said from the beginning. So, if Rick trusted City residents to vote no, and thus was willing to put it up to a vote in the new year, I could certainly support that. If Bill and Sara agree, which I assume they would, the tax increase with its six police officers dangling in the balance would go back to City voters. Then we would all know for sure how voters feel about the current Priorities of Government (POG) model budget reinstatements If Rick is wrong, and the public votes yes and nothing changes, then we get what we have. If he is right, and the public votes no, then that will result in no tax increase and the loss of six police officers. This would come at a time when the Congressional Quarterly has just reinforced what we already know about Yakima's crime and gang problem. Yakima is ranked as one of the 10 worst cities for crime in the nation for a city of our size. The questions to consider are: 1. Is this what's best for the city at this time? 2. Do you believe that Rick will really move to rescind the vote after Dave Edler is off the council? 3 Is a public vote a risk that Maureen, Kathy, Dave Edler and Micah (four of the five original "yes" votes) are prepared to take? Now, to my point. At the last meeting I made a motion for a 5% increase with the money funding 10 police and reserves. As you will recall, this motion was voted down. In retrospect a "yes" vote would have done much needed good to law enforcement and would have negated the threat of an overturn. Hey, even the Yakima Herald Republic editorial board wrote that I had a point when it quoted me as saying we missed a huge opportunity to bolster police and fight crime. So, tomorrow I will make a new motion. I ask you to consider its merit in light of our crime fighting needs, the likelihood of the current tax being overturned, and the important messages we need to send to our community, criminals, and gangs I will move that we reallocate the 6% utility tax distribution from reinstating P.O.G. model cuts to substantially investing in fighting our crime problem In essence that motion will: 1.) Make the P.O.G cuts and the supplemental cuts as outlined by the City Manager sending a message to the residents of Yakima that we are prepared to suck it up, make tough million -plus dollar cuts to the general budget, and position ourselves to better "live within our means". 2.) Insure the implementation of the 6% utility tax which would be used to hire, train, and outfit 12 police officers, preserve the prosecuting attorney's secretarial capability, hire a Gang Free Initiative Coordinator, set money aside for a Gang Free Initiative (GFI) program implementation, and set aside some money to offset anticipated cuts in State shared revenue to the City. This would send a message to the criminals and gangs that we are serious and proactive about our number one community priority of Public Safety. It would also send a message to our residents that we acknowledge that extreme times, such as our current criminal climate, call for extreme measures such as a utility tax increase. We would take additional steps above and beyond what we are doing now to create a safer community where ultimately business and prosperity will feel safe in returning. We say it all the time... "until we get a handle on gangs and crime... blah blah blah". Now it's time to step up. 3.) In addition, we already made a sizeable investment in time, money and community effort in the GFI which has more or less stalled out due to lack of funding. This can be an important weapon in the war on gangs and had to be implemented or we risk losing all interest, momentum, and the value of past investment. 4.) Yes, we are open to unions going after the money. But yes, we are still open to that even without additional money being raised. Generally speaking, the money breaks down this way. Cost for 12 additional police officers per year $1,100,000* Cost to outfit and train one time), $500,000** **These costs will be phased in over the course of 15 months -- hiring can be regul ted not to exceed $1.3 million in year one** Secretarial help for Prosecutor Restore firefighter position Gang Free program Implementation Money set aside to offset anticipated state cuts $80,000 $80,000 $140,000 $400,00q Total $2,000,000 After the initial training and outfitting, as we continue to fight gangs and crime in subsequent years, the $500,000 can be used for other law enforcement needs and proven effective GFI programs. If there is support for this plan with even three of the four votes that passed the original utility tax, I think it is safe to say it will hold up in the new year and will pay dividends to our City's safety for years to come. If there isn't enough support for it to pass there is a pretty good chance the emotion of tax burdened voters will decide the future direction of our City and its safety. I prefer my plan but I can live with either Thanks for your consideration in the difficult matter of taxation in tough times versus the need for public safety Call if you have any questions. 949-6931 BUDGET IN BRIEF Distributed at Meeting The Budget In Brief provides a high-level overview of the preliminary 2014 budget, along with significant issues that are anticipated to have a material impact in 2014. Even as the local economy is gradually bouncing back to pre -recession levels, we are still struggling with underlying conditions that has Yakima's unemployment and poverty rates higher than the state and national averages. Given these economic challenges, the 2014 budget is balanced within available resources without new taxes, and is responsive to the City Council's strategic priorities and the community's needs. 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 and stimulate economic development. 2013 VS. 2014 BUDGET COMPARISON AND 2014 BUDGET OVERVIEW The chart below shows the 2014 budget, including beginning and ending fund balances in summary format. 2013 ESTIMATE / 2014 BUDGET COMPARISON RevenuesExpenditures i,. 2013 2013 Year -End 2014 °' Year -End 2014 % Fund Estimate Budget Chng Estimate Budget Chng General $53,494,980 $57,181,843 6.9% P1 $53,431,800 $56,936,455 6.6% Parks and Recreation 4,346,215 4,357,215 0.3% e 4,128,949 4,412,448 6.9% Street & Traffic Operations 5,230,123 4,596,360 (12.1%) 5,335,438 4,786,409 (10.3%) iii General Gov't Subtotal 63,071,318 66,135,418 4.9% 62,896,187 66,135,312 5.1% Utilities/Other Operating 65,321,537 64,549,505 (1.2%) fA 66,633,842 67,737,845 1.7% Capital Improvement 52,451,182 56,205,847 7.2% 52,210,864 64,889,845 24.3% Risk Management Reserves 3,638,900 3,360,500 (7.7%) !I 3,795,852 3,371,576 (11.2%) Employee Benefit Reserves 13,444,849 11,802,538 (12.2%) 12,097,944 12,843,823 6.2% G.O. Bond Debt Service 3,594,215 4,809,441 33.8% 3,690,000 4,968,849 34.7% Utility Rev Bond Debt Service 2,129,686 2,146,286 0.8% ft 2,127,561 2,144,786 0.8% Trust and Agency Funds 527,200 625,171 18.6% ra 523,700 622,671 18.9% Total $204,178,887 $209,634,706 2.7% $203,975,950 $222,714,707 9.2% The estimated revenues for all funds are $209.6 million. This represents an increase of $5.4 million or 2.7% more than the 2013 Year -End Estimate of $204.2 million. The expenditure budget for FY 2014 for all funds is $222.7 million. This represents an increase of $18.7 million or 8.4% more than the 2013 Year -End Estimate, primarily in the area of capital improvement. Introduction • Section I -1 2014 BUDGET SUMMARY Est. 2014 Estimated Beginning 2014 2014 Use of 2014 Ending Fund Balance Revenue Expenditure Reserves Fund Balance General $9,245,322 $57,181,843 $56,936,455245,387 ($ ) $9,490,709 Parks and Recreation 678,057 4,357,215 4,412,448 55,233 622,824 Street & Traffic Operations 1,159,848 4,596,360 4,786,409 190,049 969,799 General Government Subtotal 11,083,227 66,135,418 66,135,312 (105) 11,083,332 Utilities/Other Operating 16,381,886 64,549,505 67,737,845 3,188,340 13,193,546 Capital Improvement 22,266,439 56,205,847 64,889,845 8,683,998 13,582,441 Risk Management Reserves 1,125,161 3,360,500 3,371,576 11,076 1,114,085 Employee Benefit Reserves 6,288,585 11,802,538 12,843,823 1,041,286 5,247,299 G.O. Bond Debt Service 553,278 4,809,441 4,968,849 159,408 393,869 Utility Revenue Bond Debt Service 1,758,713 2,146,286 2,144,786 (1,500) 1,760,213 Trust and Agency Funds 1,008,424 625,171 622,671 (2,500) 1,010,924 Total $60,465,713 $209,634,706 $222,714,707 $13,080,003 $47,385,710 • The estimated resources (revenues plus beginning fund balance) for all funds are $270.1 million, an increase of $5.7 million or 3.1% more than the 2013 Year -End Estimate of $264.4 million. • The use of reserves of $13.1 million is programmed to be primarily out of capital funds, which is typical as reserves are built over time to be used in major projects. Both Wastewater and Water utilities are in the middle of major capital programs, and Transit is purchasing 3 buses. • The operating funds are set with conservative revenue estimates—even though many of them are budgeted to use reserves, it is likely that future revenue will exceed budget, bringing them closer to "break-even" by next year-end. 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%). > 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. 2 — Section I • Introduction 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 in the 2014 Preliminary Budget document for more information. Capital Improvements > The City will invest $64.5 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. General Government Revenues/Balancing 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 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 $285,000 of 0.7% new construction. The combined general operating and debt service property tax levy will decrease by .36% over 2013 combined tax levy. > 5% growth in sales tax (3% base plus new major retailer) $720,000 > Franchise and utility tax growth of 5.3% ($500,000 cable tax moved to GG) $777,500 > Charge for services growth of 14.8% (New Engineering Programs) $904,000 > State liquor excise tax reinstated $150,000 We have balanced the 2014 General Government Fund budget using the following strategies: > Instituting a 2% vacancy rate. Personnel costs are budgeted at 98% to account for a minimum 2% position turnover/vacancy Savings: $950,000 > Attrition/vacancy of positions Savings: $175,000 > Health plan cost down 15% Savings: $1,000,000 > Renegotiated Jail contract Savings: $324,000 Introduction • Section I — 3 • MAJOR POLICY CONSIDERATIONS The 2014 budget includes the following investments in the community's key priorities: Strategic Priority Budgeted Item(s) Expand police presence with 74 additional vehicles Eliminate fire brownouts/additional training Expand bike/foot patrols & additional Parking Enforcement officer Purchase new fire brush truck Additional Police training Invest in Public Safety $798,000 528,900 64,800 130,000 75,000 Increase attorneys to meet Indigent Defense mandates 600,000 $2,814,300 Hire Gang Free Initiative Operations Manager 88,600 Install 8 automatic license plate readers in police vehicles 135,000 Parking Enforcement Officer 56,800 Reorganize Communications & Information Te chnology divisions 142,200 Construct/relocate Communications center 195,000 Downtown Master Plan and Retail Master Plan Invest in Economic 170,000 Downtown Special Events Development 110,000 Airport marketing and terminal improvements 150,000 $2,830,000 Cascade Mill Site 2,400,000 ,.a..r �. ,� . �� r, ......v �""z,v`�' , ,d: ..- x t� s,t a�� , ..., 4,+ }� �� + u�''�`: .''; Road improvements 16,500,000 Airport taxiway improvements & airfield lighting improvements 11,100,000 Street Right of Way use permits (revenue) 150,000 North 1st Street improvements 1,200,000 Hire Graffiti Abatement Coordinator & reinstate Traffic Engineer 144,100 Improve the Built Update Stormwater, Wastewater & Industrial Wastewater rate sti 110,000 Environment Expand Code Enforcement 100,000 $34,984,100 Implement Stormwater plan 600,000 Installbiosolids dryer 4,700,000 Complete Wastewater collections master plan 100,000 Pedestrian and bicycle connectivity plan 40,000 Implement pilot recycling program 40,000 City Hall improvements 200,000 a i .�" �,:: .c- .. .". �.�r- � , v. � r. ';Lr.J�-�=L rwAi. Capitol Theatre improvements and management fee 372,000 Increase Convention Center management fee $13,900 708,200 Partnership Development YPAL facility improvements 50,000 $1,268,200 New Vision contribution 33,000 Southeast Community Center improvements 45,000 Additional $20,000 Visitor Information Center funding 60,000 ..e.. '. .,.r'., ..r , v..'vY, Capitol improvements Public Trust and 65,000,000 Customer service academy Accountability 50,000 $65,098,000 Annual citizen survey 35,000 Annual employee survey 13,000 4 - Section I • Introduction • 2014 EXPENDITURE BUDGET BY FUND ($222.7 MILLION) Utility Revenue Bond Debt Svc $64.9 29.1% Utilities/Other Operating $67.7 Parks & 30.4% Recreation Street & Traffic 4 $4.8 2.0% 2.1% Capital Trust and General Improvement Agency Funds $5.0 Obligation 2.2% Bond Debt Svc/ 1.5% $12.8 Contingency/ Risk Management $2.1 1.0 .0 5.8% 2014 RESOURCES BUDGET BY FUND ($270.1 MILLION) Trust and Agency Funds $4.5 Utility Revenue 1.7% Bond Debt Svc $78.5 29.1% Utilities/Other Operating $80.9 30.0% Resources = Revenues plus Beginning Fund Balance Street & Traffic $5.8 2.1% Employee Benefit Reserves $0.6 0.3% General Fund $56.9 25.6% Capital Improvement General $5.4 Obligation 2.0% Bond Debt Svc $18.1 Contingency/ 6.7% Risk Management / $3.9 1.4% Employee Benefit Reserves $1.6 0.6% Parks & Recreation $5.0 1.9% General Fund $66.4 24.6% Introduction • Section I - 5