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HomeMy WebLinkAbout11/01/2022 08. First public hearing on the 2023-2024 Preliminary Biennial Budget for the City of Yakima 1 5l BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 8. For Meeting of: November 1, 2022 ITEM TITLE: First public hearing on the 2023-2024 Preliminary Biennial Budget for the City of Yakima SUBMITTED BY: Bob Harrison, City Manager Jennifer Ferrer-Santa Ines, Director of Finance and Budget SUMMARY EXPLANATION: This is the first public hearing prior to adoption of the 2023-2024 Preliminary Biennial Budget. The second hearing is scheduled for November 15, 2022. The Preliminary 2023-2024 Biennial Budget was submitted to City Council and reviewed and discussed in Study Sessions on Oct. 4th, 6th and 11th. ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: Conduct the Public Hearing and accept public testimony. ATTACHMENTS: Description Upload Date Type 0 Memo 10/20/2022 Omer(Memo 0 Power Point Presentation 10/20/2022 Presentation 2 "5. F . FINANCE DATE: October 22, 2021 TO: Honorable Mayor and Members of City Council FROM: Bob Harrison, City Manager Jennifer Ferrer Santa-Ines, Director of Finance & Budget Kimberly Domine, Finance Division Manager RE: 2023-2024 Biennial Revised Preliminary Budget Staff respectfully submits the 2023-2024 Biennial Revised Preliminary Budget for consideration, following publicly-noticed Study Sessions held on October 4th, 6th and 11th for public hearings on November 1st and 15th. The 2023-2024 Biennial Revised Preliminary Budget incorporates direction given by Council during the October 2022 Budget Study Sessions, as detailed on the last page of this document. The 2023-2024 Biennial Budget forecasts a balanced General Fund using $1.6 million of fund balance reserves. Staff will work closely with council in the upcoming years to discuss long-term planning towards fiscal sustainability. At the aggregate level, The City maintains a projected ending fund balance of 20% at the end of 2023 and 17% through year-end 2024. Achievements. The City Council made policy decisions, enabling Finance to finalize ordinances, reports, narratives and other documents that must all agree with each other at final adoption on November 15th. Council and staff have worked hard throughout a challenging process exploring creative options and alternatives to maintain current service levels. As discussed in the City Council's public study sessions, the budgetary goals for the biennium include the following: ➢ Achieve a balanced budget in every fund. ➢ Assure prioritized services citywide. ➢ Preserve General Fund's reserve, with a goal of 25% of expenditures. ➢ Establish sustainable funding for equipment replacement. ➢ An updated 5-year capital budget, developed for all funds, including projects within the General Fund. Priorities. The budget process requires us to evaluate the city's priorities, between immediate services and infrastructure, across many funds, being mindful of long-term fiscal sustainability. The Yakima Council Strategic Priorities were re-affirmed from last year as follows: 1. Public Safety 2. Fiscal sustainability 3. Housing 4. Strengthening Partnership 5. Investment in infrastructure 3 FINANCE Process input. Staff participates year-round providing service delivery and managing the budget through unforeseen surprises. The budget for the biennium is largely based on what we know today. City Council exercises governance year-round and makes policy decisions. Citizens had the opportunity to provide study session input and will have additional opportunities at this hearing and the hearing on November 15th. Property Tax, Sales Tax and Utility & Franchise Tax are the largest sources of revenue for the General Fund, the most material forecasting assumptions. The following table summarizes the proposed budget across all funds. Some Enterprise and Construction Funds are budgeting to spend expenditures over current-year revenues for current and previous year projects, some of which comes from prior-year project approvals or savings in those funds. 2023 RESERVE BALANCE SUMMARY Estimated 2023 2023 Increase in Budgeted %of 2023 Beg Projected Proposed (Dec in) 2023 Ending Prop Fund Balance Revenues Expenditures Reserves Balance Exp General Fund $16,251,335 $71,773,445 $73,349,628 ($1,576,183) $14,675,152 20.0% Parks and Recreation 488,660 6,162,752 6,233,727 (70,975) 417,685 6.7% Street&Traffic Operations 1,318,167 6,415,663 6,517,426 (101,763) 1,216,404 18.7% General Government Subtotal 18,058,162 84,351,860 86,100,781 (1,748,921) 16,309,241 18.9% Other Governmental Operating Funds 20,366,497 16,063,629 20,982,018 (4,918,389) 15,448,108 73.6% Government Capital Funds 15,705,268 18,435,284 23,098,236 (4,662,952) 11,042,316 47.8% Enterprise Operating Funds 30,180,682 65,952,528 66,503,931 (551,403) 29,629,279 44.6% Enterprise Capital Funds 21,685,860 26,808,444 30,676,588 (3,868,144) 17,817,716 58.1 % Internal Service Funds 3,233,360 10,307,381 11,930,152 (1,622,771) 1,610,589 13.5% Employee Benefit Reserve 6,137,063 17,909,046 17,272,153 636,893 6,773,956 39.2% Risk Management Reserves 4,985,438 5,438,458 6,418,704 (980,246) 4,005,192 62.4% Debt Service&Agency Funds 3,609,717 6,837,743 6,837,234 509 3,610,226 52.8% Total $123,962,047 $252,104,373 $269,819,797 ($17,715,424) $106,246,623 39.4% 2024 RESERVE BALANCE SUMMARY Estimated 2024 2024 Increase in Budgeted %of 2024 Beg Projected Proposed (Dec in) 2024 Ending Prop Fund Balance Revenues Expenditures Reserves Balance Exp General Fund 8 $14,675,152 $73,500,799 $75,106,942 ($1,606,143) $13,069,009 17.4% Parks and Recreation 417,685 6,691,386 6,362,168 329,218 746,903 11.7% Street&Traffic Operations 1,216,404 6,435,518 6,642,466 (206,948) 1,009,456 15.2% General Government Subtotal 16,309,241 86,627,703 88,111,576 (1,483,873) 14,825,368 16.8% Other Governmental Operating Funds 15,448,108 16,236,849 19,253,194 (3,016,345) 12,431,763 64.6% Government Capital Funds 11,042,316 19,358,327 21,450,951 (2,092,624) 8,949,692 41.7% Enterprise Operating Funds 29,629,279 66,227,943 68,644,017 (2,416,074) 27,213,205 39.6% Enterprise Capital Funds 17,817,716 16,715,026 12,080,147 4,634,879 22,452,595 185.9% Internal Service Funds 1,610,589 10,107,344 11,148,566 (1,041,222) 569,367 5.1 % Employee Benefit Reserve 6,773,956 18,610,432 17,614,254 996,178 7,770,134 44.1 % Risk Management Reserves 4,005,192 5,764,765 7,299,121 (1,534,356) 2,470,836 33.9% Debt Service&Agency Funds 3,610,226 5,621,050 5,620,751 299 3,610,525 64.2% Total $106,246,623 $245,269,439 $251,222,577 ($5,953,138) $100,293,485 39.9% im of Yw Preliminary ry BiennialBudge 1st Pu Hearing November 1 , 2022 ,,,,.„‘„..„..."..,,,,, r,--4,11- \...-1, "',,, rib., x r :� . ��u r�&r{'x Yakima Council StudySessions October 4th • 2023-2024 Biennial Budget Overview • Economic Development • Fire • Police October 6th • Community Development • • Parks and Recreation • Capitol Theatre • TBD, REETI & II • Clean City �... �.October 11th • Refuse $ • Water and Irrigation • ARPA Update • Transit • YWCA • Equipment Rental • Community Partnerships • Wastewater and Stormwater ' • Affordable Housing Programs • Streets • Yakima Arts Center • Public Safety-Vehicle Update • Engineering • Yakima Convention and Event Center • GRIT • Parks and Recreation Fee Schedule • Permitting and Fire Inspection Fee Analysis KeyDates 4 Council Study Session 1 6 Council Study Session 2 Oct 11 Council Study Session 3 1 1st Budget Public Hearing Nov 1 Public Hearing and Ordinances on Ad Valorem Tax Rate 15 2nd Budget Public Hearing & Ordinance to Adopt } 4 d .....� { v wv.kx. kW: f Yakima Council Strategic Priorities I Public Safety 2 . Fiscal Sustainability 3 . Housing 4 . Strengthening Partnership 5 Investment in Infrastructure CAIrk,„n ,� 0 • ED SO ash OW Achieve a balanced budget in every fund. Assure prioritized services cit ide. Preserve General 'Fun 's reserve, with a goal of 25% of expenditures. Establish sustainable funding for equipment replacement. An updated 5-year capital budget, developed for all funds, including projects within the General Fund. } Revenues by Source General Fund , , Citywide % of % of ' % of % of 2023 Total 2024 Total 2023 Total 2024 Total Sales Tax $ 29,454,000 41.0 % $ 31,005,950 42.2 % $40,347,000 16.0 % $42,016,136 17.1 % Utility & Franchise Taxes 20,334,354 28.3 % 20,554,893 28.0 % 21,944,962 8.7 % 22,185,608 9.0 °A) Property Tax 9,229,468 12.9 % 8,990,443 12.2 °/© 22,863,709 9.1 % 23,285,527 9.5 % Charges for Services 3,105,310 4.3 % 3,172,501 4.3 % 60,137,914 23.8 °A) 61,520,239 25.1 °A) Intergovernmental Revenues 3,499,577 4.9 % 3,549,875 4.8 %I 38,780,698 15.4 % 22,144,126 9,0 % Other Taxes & Assessments 1,112,400 1.5 °A) 1,126,389 1.6 °A' 7,463,400 3.0 % 7,477,389 3.1 % Licenses & Permits 1,908,700 2.7 % 1,927,700 2.6 °/0: 3,389,585 1,3 % 3,408,585 1.4 °A) Fines and Forfeitures 1,291,000 1.8 °A) 1,306,540 1.8 % 1,341,000 0.5 % 1,356,540 0.6 % Transfers - - % - - %. 17,810,700 7.1 % 19,125,588 7.8 % Miscellaneous Revenues 1,838,636 2.6 % 1,866,508 2.5 % 38,025,405 15.1 % 42,749,701 17.4 % $ 71,773,445 $ 73,500,799 ' $ 252,104,373 $ 245,269,439 423ogob„$ i II I t A I _INOMMINNIN A I 1 1/ I _ / R II‘ / 411 \ WV/ ' -a Iv r--1 --r T I VII-1111-1-1r-r-iwr- (; 0 Expenditures by MONTHLY EXPENSES F[K€I V :r Category „ ,_ INAEN ROE IIITEANET I__. la General Fund Citywide % of % of % of % of 2023 Total 2024 Total 2023 Total 2024 Total Salaries & Wages $42,530,162 58.0 % $ 43,922,083 58.5 % $ 71,125,687 26.4 % $ 73,586,964 29.3 % Personnel Benefits 14,664,269 20.0 °/© 15,053,109 20.0 % 41,038,408 15.2 % 42,200,089 16.8 % Supplies for Consumption & Resale 2,079,730 2.8 % 2,089,699 2.8 %s 9,634,115 3.6 % 9,913,410 4.0 % Services & Pass-Through Payments 11,575,415 15,8 % 11,550,942 15.4 % 64,060,900 23.7 % 64,554,691 25.7 % Capital Outlays 100,000 0.1 % 100,000 0.1 % 57,021,733 21.1 % 34,244,400 13.6 % Transfers 2,193,819 3,0 % 2,224,257 3.0 % 17,810,700 6.6 % 19,125,588 7.6 % Debt Service 206,233 0.3 % 166,852 0.2 %1 9,128,254 3.4 % 7,597,435 3.0 % $ 73,349,628 $ 75,106,942 $ 269,819,797 $ 251,222,577 i.-1.F1 I1%\ .... \ I _\41111\ .I I I/ 1 /\1 " I1/ 1.1.. 2023 Citywide 2023 REVENUES BY SOURCE EXPENDITURES BY CATEGORY $252,104,373 269,819,797 Utility Fr hise Taxes Supplies tsar Services & Pass- Franchise Tax Consumption&Resale Through h Payments .7 ` ,' 9.1% 3. % 2 .7% Sales Tax !`.. 1 a.0 Charges to Personnel el Services 'Benefits 15.2% N . xr- Capital Outlays z, 21.1% Fines&Fort, Tiansfers, Sise intergovernmental ermnental x ",.. Debt Service 4.4 22.7% Revenues 3.4% 15.4% Salaries&Wages Transfers Licenses other Taxes& 2E.4 6.6% Permits Assessments 1, % 3.0% 2024 Citywide REVENUES BY SOURCE EXPENDITURES BY CATEGORY $245,269,439 $251,222,577 Utility Supplies for Sr Pass- Franchise Taxes Property Tax C'on um tion . Fie:E le er l e 9,0% = 9.5% 4.0Fb Through Pavements 25,76 d Jri.: Sales Tax „to.,-6/...',- Personnel . 1t. asp r�r..rr Benefit r• Charges for :.-rr . .190 , :---' ..:. Capital Outlays -',, }fir:;'. - Debt Bernice Fines Fort, v Inter o £ernmental 3 Transfers, •iso �rr Revenues es Transfers 2 .S it 9.0' Salaries 7. .eenses ' Other Taxes . % Permits Assessments 1.4 tom -ic"% Property Tax Yakima county Tax District Levy 2022 Yakima # Region r t Liibrary Yakima Countnty Flood Control 7 y Bonds '1 0-Eli` it l b corn EMS f `l , 2%,.* '; ' .r:+- -.�1 k ,xr5 :,.:944-r,rr. •'S^x.s: si3�}4 s7Sy„i}' ta. ss%5,% %s' y,.�:}'Fip's: ' 1 .:::,v,+Yq':y§+ys_%.i.�4. •,t: 's sy"::Y�<•x}}.y�;}'.*v:�%=.v:d==y:r}rv=S`�:;�'?,w�.y: 1 v..; ,,,m's..':.Y'==,•.ar..:;..:.rsx.yyx,s::.n.4t...:w''.i:�:''=..?:w'i.v _ ::'. '%,�. .ti};:�=.ayv;.p:�1` *s,.;�grSy'''w,:w34�:= } -; -ry,;ice;%:~:N.w r:;f.„'. •"��.i.: r x�%� n=�..wry a � �:srr-:�-::.:�:-��:W�:.�= '' �' } �` itY ..::'s�,y„;sz, .�x,.rt ir;+:'}y.wx .�..:-_4% n= ;rz .:.':i=x.�`.ry: ..:+':a:~~.-.x-`'.N .' ':�' '"t'"..N �A y .x."t.4 x.4.,;:i:irw:.. 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Tax Yea,' r Budget Challenges DHealth insurance rate increase, 3% tvwcopiE ❑Collective ini bar an (unsettled Ig g contracts-Public Safety) EXPENSES ©Staffing needs ❑Significant unfunded capital z — -� facilities/equipment needs © Inflation, 9% URecruit and retain-competitive wages "our only problem is figuring out how to switch these." . A L.1 ........., !_ I 111O111.111111111MIIIIII I .. 1...I.., Budget Development EXPENDITURES REVENUE Reorganizations to improve coordination of programs and services ➢Alternative revenue options >Expand understanding of necessary repair/maintenance/upgrade of several facilities >Continued discussion of equipment replacement funding for public safety Sustainable path to maintain existing levels of service beyond the next biennium 0 2023 Reserve Balance Summary Estimated 2023 2023 2023 Increase in Budgeted % of Beginning Projected Proposed (Dec in) 2023 Ending Prop Fund Balance Revenues Expenditures Reserves Balance Exp General Fund $ 16,251,335 $ 71,773,445 $ 73,349,628 ($ 1,576,183) $ 14,675,152 20.0 % Parks and Recreation 488,660 6,162,752 6,233,727 (70,975) 417,685 6.7 % Street & Traffic Operations 1,318,167 6,415,663 6,517,426 (101,763) 1,216,404 18.7 % General Government Subtotal 18,058,162 84,351,860 86,100,781 (1,748,921) 16,309,241 18.9 % Other Governmental Operating Funds 20,366,497 16,063,629 20,982,018 (4,918,389) 15,448,108 73.6 % Government Capital Funds 15,705,268 18,435,284 23,098,236 (4,662,952) 11,042,316 47.8 % Enterprise Operating.Funds 30,180,682 65,952,528 66,503,931 (551,403) 29,629,279 44.6 % Enterprise Capital Funds 21,685,860 26,808,444 30,676,588 (3,868,144) 17,817,716 58.1 % Internal Service Funds 3,233,360 10,307,381 11,930,152 (1,622,771) 1,610,589 13.5 % Employee Benefit Reserve 6,137,063 17,909,046 17,272,153 636,893 6,773,956 39.2 % Risk Management Reserves 4,985,438 5,438,458 6,418,704 (980,246) 4,005,192 62.4 % Debt Service & Agency Funds 3,609,717 6,837,743 6,837,234 509 3,610,226 52.8 % Total $ 123,962,047 $ 252,104,373 $ 269,819,797 ($ 17,715,424) $ 106,246,623 39A % 2024 Reserve Balance Summary Estimated 2024 2024 2024 Increase in Budgeted % of Beginning Projected Proposed (Dec in) 2024 Ending Prop Fund Balance Revenues Expenditures Reserves Balance Exp General Fund 8 $ 14,675,152 $ 73,500,799 $ 75,106,942 ($ 1,606,143) $ 13,069,009 17.4 `)/0 Parks and Recreation 417,685 6,691,386 6,362,168 329,218 746,903 11.7 % Street& Traffic Operations 1,216,404 6,435,518 6,642,466 (206,948) 1,009,456 15.2 `)/0 General Government Subtotal 16,309,241 86,627,703 88,111,576 (1,483,873) 14,825,368 16.8 °/c) Other Governmental Operating Funds 15,448,108 16,236,849 19,253,194 (3,016,345) 12,431,763 64.6 % Government Capital Funds 11,042,316 19,358,327 21,450,951 (2,092,624) 8,949,692 41.7 % Enterprise Operating Funds 29,629,279 66,227,943 68,644,017 (2,416,074) 27,213,205 39.6 °/0 Enterprise Capital Funds 17,817,716 16,715,026 12,080,147 4,634,879 22,452,595 185.9 °A Internal Service Funds 1,610,589 10,107,344 11,148,566 (1,041,222) 569,367 5.1 `)/0 Employee Benefit Reserve 6,773,956 18,610,432 17,614,254 996,178 7,770,134 44.1 % Risk Management Reserves 4,005,192 5,764,765 7,299,121 (1,534,356) 2,470,836 33.9 % Debt Service &Agency Funds 3,610,226 5,621,050 5,620,751 299 3,610,525 64.2 % Total $ 106,246,623 $ 245,269,439 $ 251,222,577 ($ 5,953,138) $ 100,293,485 39.9 % NN / ' Ally • • • • • Questions _ "" Thank car your Y � time• • (//)