HomeMy WebLinkAbout10/21/2008 08 2009 Budget Forecast Report BUSINESS OF THE CITY COUNCIL
411 YAKIMA, WASHINGTON
AGENDA STATEMENT
. Item No. S
For Meeting Of: October 21, 2008
ITEM TITLE: Presentation of the 2009 Budget Forecast Report
SUBMITTED BY: Dick Zais, City Manager -.
Rita DeBord, Finance Directovl
Cindy Epperson, Deputy Director, Accounting/Budget CE
CONTACT PERSON /TELEPHONE: Rita DeBord or Cindy Epperson; # 575 -6070
SUMMARY EXPLANATION:
Staff is pleased to submit the 2009 Budget Forecast document to Council and the public; the
submission of this document represents the formal kick -off of the annual Council Budget
Review Process. The 2009 Budget Forecast document is a preliminary look at the City's
current fiscal status, based on known and estimated 2008 results and projected fiscal impacts
in 2009, and beyond. (Further detailed information regarding the proposed 2009 budget will be
submitted to Council in early November.)
2009 Budget Schedule:
S Council Budget Review Meetings:
• The 2009 Preliminary, City -wide Budget and Policy Issues Documents are scheduled for
distribution to Council on Friday, October 31, 2008
• In -depth reviews of the Preliminary Budget will be conducted by Council from 8:30 to
Noon on each of the following dates: November 4, 10, 18 and 25, 2008
• Council holds two public hearings, one on the 2009 property taxes and one on the
proposed 2009 budget; both are tentatively scheduled for Tuesday, November 18, 2008.
Council Decision Making Meetings:
• , Budget Wrap -up is scheduled for Tuesday, December 2, 2008 from 8:30 to Noon
(At this meeting Council votes on policy issues and provides direction to staff regarding preparation
of final 2009 budget ordinance for approval at a subsequent regular Council business meeting.)
• Budget Adoption is scheduled for Tuesday, December 9, 2008 at Council's regular business
meeting, which commences at 6:00 pm
Note: All meetings are scheduled to be held' in Council. Chambers at City Hall; public hearings
are scheduled to commence at 7:00 pm.
Resolution Ordinance Other (Specify) Report
Contract Mail to (name and address): Phone:
Funding Source
APPROVED FOR SUBMITTAL: \ ----1 'Y City Manager
STAFF RECOMMENDATION: Accept Budget Forecast Report
BOARD /COMMISSION RECOMMENDATION:
COUNCIL ACTION:
City of Vitra/rut
Washington
2009 B utfget Forecast
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YAKIMA
VALLEY
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Mount Adams, Washington
CITY OF Yffibitil/
Washington
2009 BUDGET FORECAST
Equipment Insurance & Risk
Rental Management
$6.5 Million $11.4 Million
Police, Courts, Fire
Stormwater (Public Safety)
$2.1 Million
$40.1 Million
Water & Irrigation City
$15.5 Million Administration
$6.7 Million
Wastewater Information Systems
$22.4 Million & Other Services
\ 'MIL $8.3 Million
Streets, Engineering,
Refuse Planning & Codes
$4.7 Million $7.3 Million
Transit Parks and Recreation
$8.4 Million $4.4 Million
Non - Utility Other Operating Funds
Capital Improvement $9.0 Million
$44.3 Million
Debt Service Comm & Econ
$5.8 Million Development
$2.8 Million
$199.7 MILLION
Preface -1
2 — Preface
CITY OF y L „ ,
Washington
VISION STATEMENT
To create a culturally diverse, economically vibrant,
safe, and strong Yakima community
MISSION STATEMENT
To provide outstanding services that meet the community's needs
To govern responsibly by effectively managing and protecting public resources
To build trust in government through openness,
diverse leadership, and communication
To strategically focus on enhancing Yakima's quality of life
STRATEGIC DIRECTION PRIORITIES
Maintain and Improve Public Health and Safety
Promote Economic Development and Diversification
Build and Utilize Strategic Partnerships
Preserve and Enhance Yakima's Quality of Life
Efficiently Manage Public Resources and Ensure Fiscal Stability
Provide Responsive Customer Service and Effective Communications
ADOPTED MARCH 2008
Preface — 3
4 —Preface
CITY OF y,_,Llm,
Washington
2009 BUDGET FORECAST
TABLE OF CONTENTS
SECTION
I. INTRODUCTION
Transmittal Memo
City's Fiscal Condition
Budget Highlights
II. WHAT You PAY AND WHAT You GET
III. GENERAL GOVERNMENT
Year in Review
Revenue Trends
Expenditure Trends
IV. OTHER OPERATING AND ENTERPRISE FUNDS
V. CAPITAL IMPROVEMENT FUNDS
VI. BUDGET SUMMARY
EXHIBITS
I. THREE -YEAR BUDGET COMPARISON
II. POLICY ISSUE SUMMARY
III. SUPPLEMENTAL INFORMATION
Cover courtesy of: USGS /Cascades Volcano Observatory
Preface — 5
6 —Preface
INTRODUCTION: TRANSMITTAL MEMO
OFFICE of THE CITY MANAGER
(\,,,,,,,,,,i 129 h S d S City Hall, Yakima, Washington 98901 .a Phone (509) 575 -6040
' n age
MEMORANDUM
October 21, 2008
To: The Honorable Mayor and
Members of the City Council
FROM: Dick Zais, City Manager
Rita M. DeBord, Finance Director
Cindy Epperson, Deputy Director, Accounting and Budget
SUBJECT: 2009 BUDGET FORECAST
We are pleased to present to the City Council and to the citizens of the City of Yakima the
City's Budget Forecast for the year 2009.
The City's 2009 Budget is lean and balanced within existing resources. It maintains essential
municipal services and invests in our future. The Budget is based on City Council's new Strategic
Priorities and continues to reflect strong fiscal discipline and restrained spending throughout all
City departments, as necessitated by the distressed economy and our conservative tax climate.
Yakima has been managing through tough economic times for many years, and will continue
to do so responsibly and proactively to meet our communities municipal service needs and live
within our means.
2008 YEAR -END FORECAST
Our current projections indicate that 2008 year -end expenditures will be less than budgeted
in all General Government (taxpayer supported) operating funds and in total for all
funds, citywide. This is primarily due to the City's focus on controlling and curtailing
expenditures throughout the year and deferring some capital projects that will be carried
forward to next year.
Introduction: Transmittal Memo • Section I -
This close monitoring and analysis of current and projected revenues and expenditures
by the Council Budget Committee and City Staff allows for preventative measures and
adjustments to spending when and where needed and helps ensure fiscal stability for
the City. It is precisely due to the City's strong fiscal management that the City received
a significant upgrade in its credit rating this year. In August 2008, Standard and Poor's
upgraded the City's overall credit rating from "A ", to "A Plus" and stated that the City has
a "stable outlook ". In their report, Standard and Poor's attributed this credit rating upgrade
largely to the City's strong fiscal management. Additionally, in September of 2008, the City
received an "Unqualified Opinion ", the highest rating possible, from the State Auditor's in
regards to the City's 2007 financial audit.
The following chart compares the 2008 amended budget to the 2008 year -end expenditure
estimates and to the 2009 proposed budget, by type of Fund.
2008 VS. 2009
EXPENDITURE BUDGET COMPARISON 0 )
`08 vs. `09
2008 2008 AMENDED
YEAR -END AMENDED 2009 BUDGET
FUND ESTIMATE BUDGET BUDGET % CHANGE
General $47,545,767 $48,472,230 $50,521,573 4.2%
Parks 4,349,657 4,420,907 4,377,598 (1.0 %)
Street & Traffic 5,858,678 6,213,833 6,045,680 (2.7 %)
TOTAL GENERAL GOVERNMENT (2) $57,754,102 $59,106,970 $60,944,851 3.1%
Community Development 0) 4,291,336 4,679,359 2,174,807 (53.5 %)
Utilities / Other Operating 54,767,519 56,214,358 58,091,756 3.3%
Capital Improvement 27,722,473 49,122,820 56,562,187 15.1%
Contingency /Operating Reserves 3,106,807 3,346,595 3,155,709 (5.7 %)
Employee Benefit Reserves 12,358,414 12,942,068 12,964,562 0.2%
General Obligation Bonds 2,585,964 2,587,115 2,717,782 5.1%
LID Debt Service 187,000 187,000 207,000 10.7%
Water / Sewer Revenue Bonds 3,713,534 3,960,460 2,860,417 (27.8 %)
Trust and Agency Funds 25,000 27,000 25,000 (7.4 %)
TOTAL CITYWIDE BUDGET (4) $166,512,149 $192,173,745 $199,704,071 3.9%
(1) See Exhibit I for an expenditure detail by individual fund.
(2) General Government - The 2009 General Government expenditure budget is approximately $1.8
million or 3.1% above the 2008 amended budget.
(3) The 2009 budget includes an estimate of the 2009 grant awards only. The 2008 amended budget
includes the 2008 grant awards and awards carried forward from the previous years.
(4) Citywide Expenditures - The Citywide Expenditure budget is approximately $7.5 million or 3.9%
above the 2008 amended budget.
2 — Section I • Introduction: Transmittal Memo
2009 BUDGET
GENERAL GOVERNMENT BUDGET
The proposed 2009 General Government (taxpayer supported) budget includes the General
Fund, Parks Fund and the Streets and Traffic Fund. Over 60% of these tax - supported
budgets are spent on public safety services including Police, Fire, Courts and support to
these departments from the Information Systems, Finance, Legal, and Human Resources
divisions.
The proposed 2009 General Government budget reflects an increase of approximately
3.1% over the prior year despite significantly higher cost increases imposed on the budget
by known and anticipated increases in public safety and related criminal justice costs,
substantial private sector price increases for fuel, private utilities, health insurance,
construction materials, chemicals and the like, together with negotiated labor settlements
and State mandated retirement costs for employees.
CITY -WIDE BUDGET
The proposed 2009 total city -wide expenditure budget of $199.7 million is balanced within
existing resources and reflects a modest increase of 3.9% despite considerably higher
increases in costs of providing services to our citizens and the increased costs associated
with major capital projects, as outlined, above and as compared to the change in the
Consumer Price Index as noted below.
The September 2008 Consumer Price Index (CPI -W) for the Seattle- Tacoma - Bremerton
area was 6.2% - well above the increase in the City's 2009 budgeted expenditures. Cost
increases have outpaced the growth in existing operating revenues for several years;
this has necessitated close monitoring, continual "belt tightening" and a constant search
for efficiency improvements within all City departments. Staff has made every effort to
absorb cost increases within existing budgets to the greatest extent possible. This is an
on -going effort in all departments which becomes increasingly challenging each year as
departmental budgets are, and have been for some time, very lean.
While budgets have increased in absolute dollars, they have not kept up with the
increase in the related costs associated with providing existing critical and essential core
services. In 2006, the City Council became increasingly aware and concerned over this
situation and adopted a 2007 Policy Issue which authorized the formation of a Council
Budget Committee. Over the past two years, the Council Budget Committee has invested
considerable time in reviewing the City's General Government Budget and has recently
undertaken the difficult task of prioritizing the General Government services provided to
our citizens in a proactive effort to be prepared to adjust budgets, and the related services,
when /if this becomes necessary in order to ensure that the City continues to operate within
its means.
Introduction: Transmittal Memo • Section I — 3
NEW STRATEGIC PRIORITIES
Individual families and businesses within the City, the State and across the entire nation
are currently facing significant financial pressures and no one knows how long the current
financial crisis may last. In these trying economic times, it is critical to have a common
Vision and defined Strategic Priorities in order to help ensure the City's limited resources
are applied to the highest priorities.
The entire City Council is vested in the effort to provide the highest priority services to our
citizens. As part of this effort, in March of this year, the City Council adopted revised and
updated Strategic Priorities for the City; as follows:
➢ Maintain and Improve Public Health and Safety,
➢ Promote Economic Development and Diversification,
➢ Build and Utilize Strategic Partnerships,
➢ Preserve and Enhance Yakima's Quality of Life,
➢ Efficiently Manage Public Resources and Ensure Fiscal Stability, and
➢ Provide Responsive Customer Service and Effective Communications.
The Council's Strategic Priorities form the foundation for the City's 2009 Budget. The City
Manager and Department Heads utilize these Strategic Priorities as guiding principles
upon which programs and services are developed, assessed and budgeted. The City's
budget is a critical tool utilized by Council and staff to continually move the City closer
to the Council's ultimate goal — or Vision - for the City: To create a culturally diverse,
economically vibrant, safe and strong Yakima community.
Strong fiscal disciplines and a steady hand to "steer our corporate ship" safely through
the rough financial waters is also critical in these unprecedented and distressing financial
times. The principal fiscal disciplines utilized by staff to instill the necessary monetary
discipline into the City's budget are City Management's initial budget guidelines, which
places limitations on the reliance on reserves, and the level of projected year -end cash
balances in the General Fund.
Staff has long utilized these measures when preparing the City's budget; however, due to
the severe financial crisis the nation is currently experiencing and the uncertainty as to how
much worse this situation may still become, or how long it may last, City Management
implemented new, even more conservative, guidelines this year. In the past, the guideline
for dependency on beginning cash balances (i.e.: reserves) in the General Government
budget was a maximum of 5 %; this has been lowered to 4% for the 2009 budget. The
minimum General Fund ending cash (reserve) balance guideline remains at not less than
7% of annual operating expenditures.
4 — Section I • Introduction: Transmittal Memo
The 2009 General Government budget contains no new taxes, no major service reductions,
and no layoffs of City personnel. Staffing levels remain very constant throughout City
departments. There are no new FTE's (full time equivalents) in the General Government
funds and only two additional FTE's proposed in the 911 Dispatch Center and 3 FTE's
in the Utility Divisions — 2 in Storm Water and 1 in the Water Division. Although there
are many needs throughout the various departments of the City, there are significantly
fewer new Policy Issues in 2009 as compared to prior years as there simply is no funding
available to support additional programs, services or the related budget expenditures. 2009
Policy Issues largely focus on increasing efficiencies / effectiveness of existing resources
through technology improvements and re- organizations of existing staff. City departments
have absorbed many cost increases in an effort to reduce the pressure on the City's budget
and minimize impacts to citizens.
The City continues to receive a significant fiscal benefit from outside agencies, primarily
in the form of local, state and federal grants. The 2009 budget includes over $29 million in
operating and capital grants and an additional $3.5 million in state shared revenues and
$4.7 million in inter - governmental revenues from various contracts and services — for a total
of $37.6 million. This represents a major infusion of cash, jobs and other economic stimulus
to our community primarily from sources outside the City; however, this also represents
revenues that may not be sustainable in the future.
Refer to the Supplemental Information Section for a complete list of the Grants and other
"external" revenues.
The following chart identifies how the 2009 General Government funds are allocated.
Introduction: Transmittal Memo • Section I — 5
2009 GENERAL GOVERNMENT BUDGET
2009 % of
Forecast Dollars in Millions Total
Organizational Unit Budget 0 I 2 3 4 5 6 7 8 9 1 0 1 1 12 13 14 15 16 17 1 8 19 20 21 22 Budget
Police $22,607,681 37.1%
Fire 8,916,125 I 14.6%
Streets & Traffic Op. 6,045,680 9.9%
Parks 4,377,598 I 7.2%
Information Systems 2,482,128 ■ 4.1%
Transfers (1) 2,232,275 3.7%
Code Administration 1,782,792 2.9%
Financial Services 1,516266 - • Personnel
2.5%
Legal 1,455,786 MI CI Non-Personnel 2 . 4 %
Police Pension* 1,387,957 - 2.3%
Municipal Court* 1,386,829 MI 2.3%
Customer Services 1,248,127 El 2.0%
Engineering 1,204,407 . 2.0%
Planning 898,184 • 1.5%
City Manager 518,756 I 0.9%
Human Resources 488,048 I 0.8%
All Other Streets
Records 438,888 I 25.1% 9.9% Parks 0,7%
City Hall Maintenance 421,583 0 7,2/ 0.7%
Indigent Defense 385,000 I 0.6%
Intergovernmental* 348,039 I 0.6%
Purchasing 257,362 I 0.4%
Police, Fire
City Council 214,540 I & courts (3) 0.4%
Sundome* 150,000 I 57.8% 0.2%
State Examiner* 103,000 I 0.2%
Hearings Examiner* 51,000 I 0.1%
Probation 25,000 I 0.0%
District Court* 1,800 0.0%
Total $60,944,851 100.0%
Fire Pension & Benefits (2) $1,619,203 0 2.7%
* Fixed, Mandated or Contractual Costs.
(1) Transfers represent General Fund dollars that are re- allocated or transferred to other funds for use by those funds.
These dollar amounts will be utilized by the other funds to pay for services, and thus become expenditures of those
funds. 2009 budget includes $880,000 transfer to Public Safety Communications for dispatch services and the balance
goes to other government funds (e.g: Parks and Recreation, Contingency, Debt Service, etc.)
(2) Fire Pension, although classified as an operating reserve fund, is included here because it is supported primarily with
General Government resources.
(3) 57.8% of General Government resources is spent on Public Safety, including police, fire, municipal and district courts,
transfers to public safety communications and police pension.
6 - Section I • Introduction: Transmittal Memo
2008 VS. 2009 REVENUE AND EXPENDITURE OVERVIEW
REVENUES
➢ General Government — Total 2009 projected General Government revenue budget is
approximately $58.9 million or 3.2% greater than the 2008 year -end revenue estimate
of $57.1 million.
➢ Citywide — Total 2009 projected Citywide revenue is approximately $187.0 million or
14.2% greater than the 2008 year -end estimate of $163.7 million.
Refer to chart on the next page for more information.
EXPENDITURES
➢ General Government:
• 2008 Year -end expenditure estimate is approximately $57.7 million, or $1.4
million, below the amended budget of $59.1 million.
• 2009 proposed expenditure budget is approximately $60.9 million; 3.1% greater
than the 2008 amended budget of $59.1 million. The increase of approximately
$1.8 million is primarily due to increases in negotiated labor costs, State
pension mandates, health care costs, utility costs, criminal justice costs, and the
annualized impacts of the staff increases mid -year 2008 for the Deputy Police
Chief.
➢ Citywide:
• 2008 Year -end expenditure estimate of $166.5 million is approximately 13.4%
less than the amended budget of $192.2 million. This savings is primarily due to
the administration of management's strict spending controls and the deferral of
some capital projects that will not be completed by year -end.
• 2009 proposed Citywide budget is approximately $199.7 million; 3.9% greater
than the 2008 amended budget of $192.2 million. The increase is mainly due to
capital projects, grant funding and inflationary pressures noted previously.
Note: The City, with the support of the labor unions, imposed a wage freeze ( "0" percent wage
adjustment) for all employees in 2007, which saved the City approximately $1.5 million in
labor costs the first year, and made a significant contribution to the City's ability to maintain
services and ensure a stable and balanced budget in 2007 and 2008. However, the negotiated
labor settlements for 2008 and 2009 reflect some "catch -up" provisions in wages for employees,
causing a larger percentage increase in 2009 than would otherwise have been experienced. The
average 2009 wage increase for all employees is 5.0 %; however, the 3 -year (2007, 2008 & 2009)
average wage increase for all employees is 3.7 %. This wage adjustment is 1.2% less than the
average increase in the Consumer Price Index (CPI) of 4.9% for each year of the 3 -year period.
Introduction: Transmittal Memo • Section I — 7
More information regarding the City's 2008 and 2009 revenue and expenditures is included
in the balance of this report. Refer to chart on the next page for more information on
General Government revenues and expenditures. And Refer to Exhibit I for 2009 revenue
and expenditure information by fund.
PROJECTED ENDING CASH BALANCE / RESERVE
As previously stated, management's fiscal discipline over General Government operating
budgets includes conservative guidelines which restrict expenditures and helps ensure
minimum cash reserves are maintained.
Note: the City maintains Reserves to: meet potential revenue shortfalls, provide for
emergencies, meet cash flow needs, fund unbudgeted policy issues, and accommodate
unforeseen expenditures and other contingencies.
2009 REVENUE AND EXPENDITURE COMPARISON
2009 2009 2009 2009
2009 2009 EXPENDITURE ESTIMATED ESTIMATED ENDING BAL
PROJECTED PROPOSED AS % OF BEGINNING ENDING AS A % OF
REVENUE EXPENDITURES DIFFERENCE REVENUE BALANCE BALANCE EXP.
General $48,896,585 $50,521,573 ($1,624,988) 3.3% $5,933,646 $4,308,658 8.5%
Parks & Recreation 4,244,385 4,377,598 (133,213) 3.1% 432,950 299,737 6.8%
Street /Traffic Operations 5,764,810 6,045,680 (280,870) 4.9% 1,147,588 866,718 14.3%
TOTAL GENERAL GOVERNMENT $58,905,780 $60,944,851 ($2,039,071) 3.5% $7,514,184 $5,475,113 9.0%
The 2009 proposed General Government Revenue and Expenditure budget, as illustrated in
the chart above:
➢ Indicates that the budget is balanced utilizing approximately $2 million of the
estimated beginning fund balance; a dependency on beginning cash (reserves) of
3.5 %; and
➢ Projects the 2009 ending cash balance (reserves) to be approximately $5.5 million or
9.0% of the 2009 expenditures.
Both percentages are within the established new guidelines of a maximum of 4.0%
dependency on beginning cash, and a minimum year -end cash balance of 7.0% of annual
expenditures. These formulas were established to guide the budget development process
and to assist in managing and controlling expenditures throughout the year. These
formulas have proven to be very reliable and effective in maintaining the City's strong
fiscal position over the years.
Additionally, revenues and expenditures are estimated conservatively in developing the
budget, with the expectation that the actual revenues will be somewhat stronger and actual
expenditures will be less than budgeted; i.e.: resulting in an effective balanced budget. By
budgeting in this manner, the City is positioned well to absorb unexpected expenses or drops
8 — Section I • Introduction: Transmittal Memo
in revenue should these conditions occur without catastrophic impacts to its financial position.
Further, in six out of the past ten years, total revenues for both General Fund and for all General
Government Funds have exceeded total expenditures in these funds — even though the budget
was built based on the utilization of cash reserves. Only in four of the past ten years have
expenditures actually exceeded revenues. Below are two historical charts illustrating the
revenues and expenditures over the past ten years — Budgets vs. Actual results.
GENERAL GOVERNMENT - AS BUDGETED
(in thousands)
$60,000
$50,000 — —
$40,000 — —
$30,000
$20,000
$10,000 I MI MN A
$0 I I I I I I I I • 1 I
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
M Budgeted Revenue M Budgeted Expenditures f Beginning Fund Balance
GENERAL GOVERNMENT - ACTUAL RESULTS
(in thousands)
$60,000
$50,000
$40,000
$30,000 -
$20,000
$10,000 —6
$o Mb 1 1 1 1 1 II 1 1 1 1
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
M Actual Revenue M Actual Expenditure –A– Beginning Fund Balance
Introduction: Transmittal Memo • Section I — 9
The use of reserves to support the City's budget is a normal practice that consistently garners
effective results; however, it requires careful monitoring, discipline, and control to ensure that a
prudent level of cash reserves is maintained. Nevertheless, as described in subsequent pages of
this section, General Government reserves are near minimum levels, and could be depleted by
the end of 2011 unless additional cost reductions and /or revenue enhancements are attained.
The Council Budget Committee continues to meet regularly to review General Government
budgets and services and to address the sustainability of these services for the future.
2009 BUDGET DEVELOPMENT
The following budget goals and guidelines formed the overall foundation and priorities for
the 2009 proposed budget:
➢ Place primary focus on Council's six Strategic Priorities / areas of emphasis — Public
Health & Safety, Economic Development, Strategic Partnerships, Quality of Life,
Public Resources and Fiscal Stability, and Customer Service and Communications;
➢ Preserve minimum operating cash reserves and allocate necessary funds for non -
discretionary fixed, mandated and contractual costs.
➢ Submit a balanced spending plan for operating and capital budgets;
➢ Implement and maintain the strict budget spending constraints issued in April 2008
by the City Manager;
➢ Implement cost reductions and operational efficiencies wherever possible to
minimize costs to our citizens, offset potential revenue shortfalls and to maintain a
balanced budget.
➢ Incorporate the City's Six -Year Capital Facilities Plan for Utilities, Streets, Parks,
Public Safety, and Community and Economic Development projects.
City Management has maintained close supervision, discipline and control over City
spending during 2008 and in planning and preparing the 2009 budget.
THE REMAINDER OF THIS SECTION INCLUDES:
• Overview of the 2008 challenges and accomplishments and the 2009 Budget Focus
(relative to the six Council Strategic Priorities);
• A Three Year Outlook (projected revenues and expenditures); and
• 2009 Budget Highlights
10 — Section I • Introduction: Transmittal Memo
INTRODUCTION: CITY'S FISCAL CONDITION
As we watch the current financial crisis and economic recession that is gripping the entire
nation, staff is closely monitoring and assessing the impacts experienced around our state and
within our local economy. We are aware that many cities and counties within the state have,
or soon will be, announcing large employee layoffs and drastic reductions in services to their
citizens, due to the severe fiscal challenges they face. The City of Yakima is not currently facing
this desperate a fiscal situation. Thus, the City has no employee layoffs included in the 2009
budget and we are not forecasting the need for any significant layoffs in the next year.
Out of necessity, the City has historically controlled and restrained costs. In past years,
the agricultural industry was the sole significant economic driver for the City. When other
areas of the state may have been prospering, if agriculture was suffering, the local economy
suffered. Since the forces of nature are largely unpredictable and can have significant
negative impacts on agriculture, the only prudent approach to fiscal management for the
City has always been one of caution and restraint, so that when the local economy slumped
the City was able to "ride out the storms" without huge fluctuations in services to our
citizens. In addition to a local economy that had been very susceptible to the ups and
downs of one industry, over the past ten years the voters of the state have approved several
initiatives that, together, have had a significant negative impact on critical City revenues.
For the above reasons, the City has already put in place many of the cost reduction
measures now being undertaken by other cities and counties in our state. As an example:
➢ Staff Reductions: The per /capita number of General Government employees has
actually decreased over the past decade, from 7.1 full -time equivalents per every
1,000 population in 1997 to 5.9 in 2007.
➢ Wage Freezes: The City, with the support of the labor unions, implemented a freeze
(0% increase) on salary and wages, for all employees, for two out of the past eight
years (2001 and 2007).
Further past cost containment measures incorporated into our existing budgets are
reflected in the expenditure comparisons noted below:
➢ General Government Expenditures Comparisons (includes 12 Cities):*
• Payroll — The City of Yakima has the fourth lowest average per /capita payroll
costs (Note: the City of Yakima is a full- service municipality offering services not
provided by other cities in the comparison).
• Total Expenditures — The City of Yakima has the second lowest total expenditures
per /capita
* The cities utilized in the above comparisons are those cities in Washington State
with populations between 30,000 and 90,000, and include: Auburn, Bellingham,
Introduction: City's Fiscal Condition • Section I —11
Kennewick, Kent, Kirkland, Pasco, Renton, Richland, Redmond, Olympia, Walla
Walla and Yakima. Data was compiled from the State Auditor's Local Government
Comparative Statistics. (Refer to Section III for more information on these and other
comparisons and to view charts that reflect the individual rankings of each city
included in the comparisons.)
OVERVIEW OF THE CITY'S FISCAL CONDITION AND STRATEGIC PRIORITIES — 2008 AND 2009
During the first quarter of 2008, the City Council reviewed the City's Vision, Mission, and
Strategic Priorities and in March 2008 the Council updated these fundamental elements,
which will form the basis for many critical decisions for the City for years to come. The
City Council re- affirmed the existing Strategic Priorities of Public Health and Safety,
Strategic Partnerships, Economic Development and Diversification and Quality of Life.
Additionally, Council raised Effective Public Resources and Fiscal Stability and Customer
Service and Effective Communications to Strategic Priorities for the City.
In support of Council's six new Strategic Priorities, City management placed significant
emphasis on these priorities in their operating decisions and in the administration and
development of the 2008 and 2009 budgets. Additionally, cost containment and efficiency
improvements continue to be a focus and an emphasis in every expenditure decision.
The following pages contain summary information regarding 2008 accomplishments and
2009 budget objectives, categorized into the six areas of Strategic Priorities noted above.
STRATEGIC PRIORITY - PUBLIC HEALTH AND SAFETY
➢ Safe Community Action Plan - In May 2007, Council approved the first phase of
its Safe Community Action Plan (SCAP), which will provide more than $700,000
in additional funding annually. This funding comes primarily from additional
property tax revenues anticipated as a result of the annexation of the library, which
was approved by voters in April 2006. These funds provide for 7 new uniformed
police officers, a crime analyst, a crime -free rental housing clerk and enhancements
to the City's prosecution and Municipal Court services. The new police officers are
assigned to a dedicated Proactive Enforcement Unit allowing the Police Department
to expand its successful Emphasis Patrol program which targets high -crime areas in
the City.
➢ Criminal Justice Enhancements — A 0.3% sales tax increase, approved by Yakima
County voters in 2004, has enabled important enhancements to be made to the City's
Criminal Justice System. The tax currently funds 5 officers and 1 detective in the
Yakima Police Department, 1 assistant City attorney, 1 legal assistant, 2 Municipal
Court clerks, a 3/4 time Municipal Court commissioner and 1 animal control officer. A
significant portion of the City's share of the sales tax funds continues to be dedicated
to increased inmate housing costs at Yakima County facilities. Scheduled to sunset
12 — Section I • Introduction: City's Fiscal Condition
in 2010, preparations are underway by Yakima County to submit a ballot measure to
voters to renew the tax.
➢ Local and State Anti -Crime Legislation - During the 2008 Washington State
Legislative session, the Yakima City Council and our 14th District State legislative
delegation led a successful effort to change state law to provide a clearer definition
of criminal street gag activity and to increase penalties for such activity. Additional
bills supported by the City of Yakima were passed by the Washington State
Legislature including legislation that stiffened penalties for eluding police and
strengthened laws related to identify theft.
➢ Grants —the City received two federal appropriations over the past year, (1) $347,000
Bureau of Justice Assistance grant to help strengthen the City's gang resistance
and intervention programs, (2) $353,000 U.S. Department of Justice Office of
Community Oriented Policing Services (COPS) technology program for technology
and equipment to assist with graffiti surveillance, crime trend analysis and data
collection, and (3) "Staffing for Adequate Fire and Emergency Response (SAFER) Act
grant has funded 3 Yakima Fire Department firefighter positions for the past 2 -plus
years.
➢ Street / Traffic Safety Enhancements — 4 locations will receive crosswalk
enhancements in 2008, based on a study of 21 crosswalk locations and concerns
raised by community members over public safety; new street lights were installed
in 13 residential areas over the past year; 19 intersections have received significant
signal modifications / upgrades or new signals in 2007 - 2008.
2009 POLICY ISSUES - PUBLIC HEALTH AND SAFETY:
1. City Management — (1) Wastewater / Enhance Security at the Wastewater Treatment
Plant, and (2) Stormwater / Stormwater Program
2. CED Department / Codes — Humane Society Contract
3. Fire Department — (1) Support Services / Fire Station 94 Remodel, and (2) Public
Safety Communications / Transfer and add Dispatch positions
4. Public Works Department — Refuse / Upgrade Solid Waste Maintenance Worker to
Solid Waste Code Compliance Officer
5. Outside Agency Requests:
• Fourth of July Committee
• Citizens for Safe Yakima Valley Communities
6. Intergovernmental Agency Requests:
• Yakima County Emergency Management
• Clean Air Authority
Introduction: City's Fiscal Condition • Section I —13
STRATEGIC PRIORITY — ECONOMIC DEVELOPMENT AND DIVERSIFICATION
➢ Downtown Yakima Futures Initiative (DYFI)— Phases I and II of the DYFI project
have been completed and Phase III is in progress and is expected to be completed by
year -end. Nearly $11 million in public funds has been invested in the "renaissance
of Downtown Yakima ". A combination of funding from the State Legislature,
State Community Trade and Economic Development, Federal Housing and Urban
Development and City resources have paid for significant improvements in the
downtown area, including sidewalk, lighting and landscaping improvements and
an enhanced overall look and feel to the downtown. Additionally, the private sector
has invested more that $50 million in Downtown Yakima in the past 3 years alone.
The Association of Washington Cities recognized the DYFI with its 2008 Municipal
Excellence Award for Economic Development.
➢ Tax Incentives - A program approved by Council in 2006 and aimed at encouraging
downtown housing, is being utilized by a developer to transform a former
department store into luxury loft condominiums.
➢ Renewal Community Revitalization — the full $12 million received annually from the
federal Commercial Revitalization Deduction project was allocated in both 2007 and
2008, encouraging economic development by providing tax incentives for creating
jobs in Yakima and providing significant economic stimulus to the community.
➢ Yakima Resources Development - the City applied for, and was awarded, funding
from the state Local Infrastructure Financing Tool (LIFT) program to assist in making
improvements to roads, utilities, etc on and near the Yakima Resources property in
northeast Yakima.
➢ River Road — approximately $7 million in major improvements to River Road,
which included utility upgrades, road widening, traffic signal installation and new
sidewalks, were completed in the summer of 2008.
➢ Water Rights - In early 2008, the City entered into a Memorandum of Understanding
with Yakima County, Nob Hill Water Association, Yakima Tieton Irrigation District
and the Yakima Valley Canal Company that will allow for additional future
residential growth while maintaining maximum flexibility for irrigation water
providers.
➢ SIED Program — The City secured a $428,000 Supporting Investments in Economic
Development (SIED) award (combined loan and grant) to build a new street near
the Creekside Business Park and $25,000 SIED grant to fund a study to evaluate
infrastructure needs on and near the Yakima Resources property.
➢ Annexations - Five annexations have been completed since the start of 2005; these
have added more than 3,800 to the City population and over $348 million in assessed
values. Annexations provide many benefits to the City and our citizens; including
14 — Section I • Introduction: City's Fiscal Condition
a significant increase in buildable lots within the City. Development in these newly
annexed areas has been spurred by the utility infrastructure and other urban services
now provided by the City.
➢ Investments in Infrastructure — Over $56 million is included in the 2009 budget for
major capital projects; the magnitude of these investments will provide a substantial
economic boost to the local economy — creating jobs and stimulating growth. These
projects are largely funded by Federal or State Grants; thereby significantly lessening
the burden on our local citizens who need these infrastructure upgrades but could
not otherwise afford this level of investment. The City's plans for construction
projects over 2008 and 2009 include: $18.8 M - Railroad Grade Separation; $1.4 M -
16th Avenue & Washington Avenue reconstruction; $1.6 M - William O. Douglas trail
enhancements; $2 M Nob Hill bridge repair; $3 M — Irrigation system improvements;
$2.4 M — Domestic Water system improvements; $5.6 M - Wastewater facility projects
and sewer improvements; nearly $1 M — Transit capital investments; $1.3 M — Parks
improvement projects and $9.7 M Capitol Theatre improvements (many projects in-
progress.)
2009 POLICY ISSUES - ECONOMIC DEVELOPMENT AND DIVERSIFICATION
➢ CED Department — Tourism Promotion / (1) Management Fee Increase; (2)
Equipment Replacement and System Upgrades, and (3) Market Analysis and Visitor
Profile
➢ Public Works Department — Streets / Corridor Study
➢ Outside Agency Requests:
• Yakima County Development Association
• Yakima County Development Association (New Vision)
• Yakima Chamber of Commerce
• Hispanic Chamber of Commerce
• Yakima Basin Storage Alliance
• Yakima - Morelia Sister City Association
• Committee for Downtown Yakima
STRATEGIC PRIORITY — STRATEGIC PARTNERSHIPS
➢ Critical Areas Ordinance - Early this year, the City and Yakima County jointly
adopted an updated Critical Areas Ordinance. The Ordinance guides development
in order to protect critical areas such as wetlands, wildlife habitat, geologic hazard
areas and flood hazard areas.
➢ Probation Services - The City celebrated the 2 -year anniversary of the consolidation
of the City /County probation services this year. The merger has proven successful
in containing costs and ensuring continuation of high - quality services.
Introduction: City's Fiscal Condition • Section I — 15
➢ Regional Aquatics Facility - In 2007 a study was initiated on the possibilities and
interest in financing and construction of a regional aquatics center. This project and
study will continue into 2009.
➢ A Stormwater Policy Group - consisting of representative from the cities of Yakima,
Union Gap, Moxee, and Sunnyside, and Yakima County have worked for the past
several years to achieve cost - effective compliance with new state and federal storm
water mandates. Updated Ordinances and final Interlocal agreements are near
completion and implementation of assessment fees is planned for January 2009.
➢ Regional Soccer Complex — Yakima Youth Soccer Association and the City partnered
to submit a grant application to the Washington State Recreation and Conservation
Office for funding to build a multi -field soccer complex on property owned by the
City.
➢ Dispatch Services - In 2007, the City of Yakima entered into an agreement with the
City of Selah to provide law enforcement dispatch services to them.
➢ First Tee of Yakima — The City partnered with The First Tee of Yakima to kick -off its
inaugural season at two local golf courses. The First Tee is a character development
program that utilizes golf to attract kids between the ages of 5 and 18.
2009 POLICY ISSUES - STRATEGIC PARTNERSHIPS
➢ City Management — Stormwater / Personnel Staffing Levels
STRATEGIC PRIORITY — QUALITY OF LIFE
➢ Skate Park - Construction began on Yakima's $360,000 state -of- the -art skate park
at Kiwanis Park mid -year 2008, with completion expected by end of the year. The
Gateway Sports Complex, located in Kiwanis Park, was recently named the best new
sports complex in the state.
➢ West Valley Community Park — final transfer of this park from Yakima County to the
City was completed mid -2008. The City assumed responsibility for maintenance of
the park, which is provided through a contract with a private lawn care company
and a partnership with the West Valley School District.
➢ William O. Douglas Trail — Grant funding received in 2007 from the Washington
State Department of Transportation is allowing for continued development of this
trail, which links Yakima to Mount Rainier National Park.
➢ Summer Parks Activities - Many summer activities were provided to our citizens in
our community parks, including a successful "Summer Concert Series "; the Yakima
Folk Life Festival; and the "Outdoor Summer Cinema" series showing outdoor
movies in many City parks.
16 — Section I • Introduction: City's Fiscal Condition
➢ AmeriCorps Program — Now in the 2nd year of a 3 -year contract, this program is
meeting the needs of thousands of kids in the community by coordinating weekday
after school services, weekly Night Action events and the Children of prisoners
mentoring program.
➢ Grants — The Washington State Department of Transportation approved three
separate grant applications submitted by the City totaling $1.3 million. The money
will be used to buy and renovate the historic Yakima Trolley barn, construct a bike/
pedestrian pathway along 6th Avenue that will connect with the Greenway and
Naches River areas and to continue development of the William O. Douglas Trail, a
recreation corridor linking Yakima to Mount Rainier National Park.
2009 POLICY ISSUES - QUALITY OF LIFE
➢ CED Department — Codes / Management Fee Increase
➢ Public Works Department — Streets / (1) Corridor Study, (2) Parks /Develop Upper
Kiwanis Park, and (3) Parks / Solicit RFP requests for leasing of Fisher Park
➢ Outside Agency Requests:
• Sunfair Association
• Allied Arts ArtsVan
• Retired Senior Volunteer Program
• Seasons Music Festival
• Yakima Symphony Orchestra
➢ Intergovernmental Requests:
• Clean Air Authority
STRATEGIC PRIORITY — PUBLIC RESOURCES AND FISCAL STABILITY
➢ Council Budget Committee — Formed in 2007, this Council committee meets
regularly and is focused on establishing General Government service priorities and
ensuring the sustainability of essential, core services, into the future through budget
/ service reductions and /or revenue enhancements.
➢ Cost Containment - Strict cost - containment measures over the past two years,
including the employee salary and wage freeze in 2007 and the elimination of
approximately $900,000 in General Government expenses eliminated in both the
2008 and the 2009 budgets, have minimized the need for the City to dip into reserves
to cover General Government expenses.
➢ Outside Funding — Nearly $38 million of the 2009 budgeted revenues will come
from resources other than taxes, rates, fees or other charges collected by the City
of Yakima. These revenues will be provided from State and Federal grants, Inter-
governmental contracts for services and State - shared revenues.
Introduction: City's Fiscal Condition • Section I —17
➢ Financial Audit and Credit Rating — The City received its 23rd consecutive
"unqualified" audit report from the Washington State Auditor's office for the 2007
fiscal year. And, the nationally recognized rating agency, Standard and Poor's
(S &P), upgraded the City's overall credit rating from "A" to "A Plus ", primarily due
to the City's sound fiscal management and track record of strong cash reserves.
Additionally, In May of 2008, the City received a two -step upgrade, from "A" to "AA
minus ", of its Water and Wastewater utilities credit rating from Standard and Poor's.
➢ Performance Audit - In April 2008, the Yakima City Council invited Washington
State Auditor Brian Sonntag to conduct an independent, comprehensive
performance audit of City operations. This audit will be designed to look at the
efficiency, effectiveness, and productivity of City programs and services and
whether they are producing the desired results.
➢ Purchasing / Bidding — The City "piggy backs" on contracts already completed
by other governmental entities and utilizes "joint bidding" which combines the
City's purchasing power with that of other entities; these practices reduce costs and
improve staff efficiency.
➢ Automation / Technology — the City is utilizing automation and technology to
improve employee efficiency, some examples of this include: the utilization of
handheld and laptop computers in the field by code inspectors; bid specifications
are now provided electronically; a 7 -year effort to fully automate all refuse routes
was completed this year; on -line job applications — nearly 70% are now received
electronically. Additionally, several technology projects are in progress and
scheduled for completion in the near future.
2009 POLICY ISSUES - PUBLIC RESOURCES AND FISCAL STABILITY
➢ City Management — (1) Water & Irrigation / Reorganization, and (2) Legal / Increase
Part -time Legal Assistant to Full Time
➢ CED Department — (1) ONDS / Reorganization, and (2) Engineering /
Reorganization
➢ Public Works Department / Streets — Eliminate Senior Sign Specialist and Upgrade 2
Part -time Specialists to full time.
STRATEGIC PRIORITY — CUSTOMER SERVICE AND COMMUNICATIONS
➢ Council Meeting Coverage - In February 2008, Y -PAC expanded its coverage to
include monthly meetings of several City Council Committees, including: Council's
Public Safety, Economic Development, Transit /Transportation Planning, Budget,
Neighborhood Development and the Downtown Futures committees.
18 — Section I • Introduction: City's Fiscal Condition
➢ State of the City — In July 2008, the City Council made a presentation to the Greater
Yakima Chamber of Commerce general membership which outlined some of the
major projects, programs and initiatives overseen by various Council committees
during the past year.
➢ Public Disclosure Audit — In the five years from 2001 and 2006, the number of Public
Disclosure Requests (PDR) increased 75% (from 31 to 207) and the growth appears
to be continuing as 2007 saw a 15% increase over 2006 and through June of 2008, the
City had received more than 150 PDR. The results of an independent performance
evaluation by the State Auditor's office found the City's compliance (response to
such requests) to be outstanding and among the best for all cities in the State.
➢ City's Website - In 2008, the City Council meetings were made available on the City's
website additionally, several new links have been added to the front page of the
City's website, including: links to CrimeWeb.net (a national clearinghouse for law
enforcement information) and YakimaTransit.org. (Bus riders can now log onto this
website and find out where buses are and when they will arrive at a particular stop).
Additionally, programs and services offered by the City's Parks and Recreations
Division are posted on the City's website.
➢ Community Relations — communication efforts with the media was increased this
year as reflected by the increase of approximately 10% in the averaged number of
media contacts per month in 2008 by the Community Relations Manager (average of
55 contacts per month in 2008).
➢ Customer Service — in addition to the items noted above, many programs and
initiatives have been undertaken to enhance services to our citizens and ratepayers,
including: Yakima Transit now has six heavy -duty buses which are ADA
handicapped accessible, with "low- floors" and all buses are now outfitted with new
equipment that provides both voice and visual announcements providing assistance
to visually and hearing impaired riders; a new Utility Customer Information
Brochure, which contains information regarding rates and services for all five City
Utilities, was prepared and distributed to customers; only once in the past 5 years,
has the City needed to return a permit fee under its money back guarantee policy
regarding the timely issuance of a residential or commercial building permits.
2009 POLICY ISSUES - CUSTOMER SERVICE AND COMMUNICATIONS
➢ Finance Department — (1) Utility Services / Consolidation of Positions, and (2)
Information Systems / Records Management System
➢ Public Works Department — (1) Transit / Purchase of 35 foot Bus, and (2) Refuse /
Upgrade solid Waste Maintenance Worker to Solid Waste Code Compliance Officer
Introduction: City's Fiscal Condition • Section I —19
2009 GENERAL GOVERNMENT BUDGET DEVELOPMENT
In the past, City management's tight spending controls and conservative approach to
fiscal expenditures has allowed the City to consistently provide citizens with the basic and
essential services they have enjoyed for years and come to expect. During the past several
years, management has continued to "do more with less" by absorbing many private and
public sector cost increases and unfunded mandates that have been "levied" on the City in
order to continue to provide existing critical and essential services for our citizens.
In the development of the 2009 General Government budget, City management continued
to impose spending restraints and to reduce spending wherever possible without
jeopardizing essential services. This resulted in budget reductions that helped to offset a
considerable portion of the general cost increases that the City experienced as a result of
on -going consumer price increases. Following is a summarized list illustrating where the
majority of over $900,000 of budget reductions occurred:
2009 EXPENDITURE REDUCTIONS SUMMARY - BY TYPE
As INCORPORATED
IN 2009 FORECAST
EXPENDITURE TYPE AMOUNT % OF TOTAL
Salary /Wages and Benefits ($36,000) 3.9%
Overtime (93,000) 10.2%
Professional Services (416,500) 45.5%
Supplies / Small Tools (117,000) 12.8%
Debt Service (219,000) 24.0%
Capital Outlay (33,000) 3.6%
TOTAL ($914,500) 100.0%
2009 EXPENDITURE REDUCTIONS SUMMARY - BY DEPARTMENT
As INCORPORATED
IN 2009 FORECAST
DEPARTMENT AMOUNT % OF TOTAL
City Administration ($25,500) 2.8%
Finance (386,000) 42.2%
Municipal Court 0 0%
Police (115,000) 12.6%
Fire (93,000) 10.2%
CED (40,000) 4.4%
Public Works - Streets & Traffic (214,000) 23.4%
Public Work - Parks (41,000) 4.4%
TOTAL* ($914,500) 100.0%
* The total itemized budget reductions of $914,500 is approximately 1.5% of the
amended 2008 General Government Budget of $59.1 million
20 — Section I • Introduction: City's Fiscal Condition
3 YEAR OUTLOOK (2009 — 201 1)
The state of the national economy gives good reason for utilizing great caution when
forecasting future revenues and expenditures. The City can not afford to rely solely on its past
performance to fully insulate it from the growing national economic crisis. The City may face
real and severe fiscal challenges in the future as the effects of the national financial crisis and
economic recession continue to bear down on our local economy.
One effective tool that management has utilized over the past few years to proactively
help prepare the City for future economic challenges is the creation of a 3 -year Outlook
that is based on projected revenues and expenditures. This Outlook, however, takes a little
different perspective than do many otherwise similar forecasts. This 3 -year Outlook is not
representative, and does not reflect, what we believe "will be" the true fiscal status of the City
in the next three years; but, rather it illustrates what "would be" the fiscal status of the City if no
corrective action is taken in the ensuing years.
The difference in these two future perspectives is significant. By law, the City must implement
a balance budget, and; therefore, an "actual" 3 -year Outlook would only illustrate what we
already know — the City will have a balance budget and cash reserves will not go negative.
However, the perspective shown on the following pages illustrates the City's fiscal status
over the course of the next three years — IF — no corrective action is taken to change course.
This perspective provides a critical view of the direction the City is currently moving and the
level, or severity, of actions that may be necessary to change course and prevent the City from
experiencing the negative fiscal position that would otherwise result.
The charts on the next page depict the negative impact that the rising costs and revenue
restraints anticipated over the next three years are projected to have on the City's fiscal
resources - should no corrective actions be taken.
Assumptions underlying the revenue and expenditure projections on the next page:
➢ 2008 revenue and expenditure projections are based on current year -end estimates;
➢ 2009 projections reflect the City's proposed 2009 budgeted revenues and expenditures;
➢ 2010 and 2011 expenditures are based on an estimated average increase of 3.5% each year;
➢ 2010 and 2011 total revenues are projected to increase an average of 3.0% in each
year based on the following estimated increases;
• Property Tax Revenue - 2.0% annually, overall. (1% general increase, per
maximum allowed under I -747, plus approximately 1.0% growth each year.);
• Utility Tax Revenue — 4.5% annually;
• Sales Tax 3.0% annually; and
• All other Tax Revenue - 3.0% annually
Introduction: City's Fiscal Condition • Section I — 21
GENERAL GOVERNMENT
SEVEN YEAR COMPARISONS*
EXPENDITURES AND REVENUE
(Excludes Fund Balances)
70,000,000
65,000,000 -
60,000,000
55,000,000
50,000,000
45,000,000
2005 2006 2007 2008 YE 2009 2010 2011
Actual Actual Actual Estimate Budget Projected Projected
f General Government Expenditures General Government Revenue
ENDING FUND BALANCE
(Cash Reserves)
10,000,000 -
8,000,000
6,000,000
4,000,000
2,000,000
0 A
- 2,000,000
2005 2006 2007 2008 YE 2009 2010 2011
Actual Actual Actual Estimate Budget Projected Projected
* Note: The above charts are included solely to show the adverse fiscal impacts on the
City's General Government Cash Reserves should no action be taken to offset the above
revenue and expenditure projections. This is presented for illustrative purposes only, as
the City would take proactive, corrective actions to preserve the cash reserve balance.
22 — Section I • Introduction: City's Fiscal Condition
SUMMARY
The City's 2009 budget is balanced within existing resources, maintains existing essential
services and invests in our future. However, the 2009 General Government budget
includes approximately $2 million of cash reserves. As previously stated, management's
revenue and expenditure estimates are intentionally conservative and, therefore, staff does
not anticipate that the full amount of cash reserves budgeted will ultimately be necessary
to achieve a balanced budget. Management's 2008 year -end General Government forecast
reflects the use of approximately $675,000 of cash reserves to maintain a balance budget.
The City recognizes that it may be necessary in the coming years to reduce spending
and related services, and /or increase revenues, in order to continue to provide existing
critical and essential services to our citizens. With this in mind, Council increased their
focus on the City's General Government services and related expenditures in 2006 with
the authorization of a Council Budget Committee. The primary focus of this Council
Committee is to prepare a plan to ensure the City's ability to provide essential services
to our citizens and to ensure the fiscal health and stability of the City into the foreseeable
future. This will likely be accomplished by the identification of permanent, ongoing
reductions in General Government spending; however, the Committee will also review and
evaluate potential new revenue options.
The Council Budget Committee has been meeting regularly for the past two years and is
currently focusing their primary attention on developing General Government service
priorities. Once developed, these priorities will then be applied to the development of
future General Government budgets and operating plans. This will position the City to be
prepared to make the difficult decisions regarding budget / service reductions and revenue
enhancements in the future, should they become necessary.
The most significant and critical factor that has contributed to the City's current stable
financial condition is "demonstrated good financial management" and "good financial
policies and practices "; as confirmed by Standard and Poor's, a nationally recognized and
independent rating agency, in their report regarding their reasons for upgrading the City's
credit rating this past summer. With the City Council's steady hand providing direction
and the solid financial oversight of City management, the City is well positioned to weather
the financial and economic storms and remain fiscally sound and to continue to provide the
critical and essential services our citizens desire and deserve well into the future.
Introduction: City's Fiscal Condition • Section I — 23
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24 — Section I • Introduction: City's Fiscal Condition
INTRODUCTION: BUDGET HIGHLIGHTS
This 2009 budget proposal is the result of a process that spans several months and includes
detailed, in depth reviews and budget discussions with employees in every department of
the City. As part of this process the City Administration and Budget staffs have carefully
examined all major spending programs and obligations, and implemented cost savings and
expenditure reductions wherever possible without severely jeopardizing essential services.
City staff is continually assessing proposals from various legislative, regulatory and political
bodies, citizen initiatives, citizen groups, etc. in an effort to identify, analyze and prepare the
City for the impacts that may result should various proposals become a reality. Additionally,
staff monitors changes in revenue and expenditure trends that, if continued over time, could
reduce the City's ability to continue to provide existing basic and essential services to our
citizens. This section incorporates an overview of the proposed 2009 budget with a discussion
of known or anticipated significant changes in the City's revenues and /or expenditures and the
related impacts thereof on the City's fiscal condition over the next few years.
THIS SECTION IS BROKEN INTO THE FOLLOWING CATEGORIES:
Expenditures
Major Capital Projects
Debt Service Costs
Changes in Funding (Budget) Authorization (includes personnel and staffing)
Resources
EXPENDITURES
PERSONNEL COSTS
Management implemented a "freeze" on wages and salaries for all employees in 2007. Even
though this saved $1.5 million citywide in the first year alone, 2008 and 2009 wage increases
included some "catch -up" All but one of the bargaining units has reached negotiated
settlements for 2009, and the total cost, citywide, is approximately $2.6 million for 2009 over
2008. YPPA remains the only bargaining unit currently without a contract for 2009.
Additionally, the State mandated an unfunded increase in the City's 2009 State retirement
plan contributions of approximately 12% or $350,000 citywide. This comes on top of an
18% increase in 2008 over 2007.
The self insured medical fund experienced a reasonably good claim year in 2008. The rates
were adjusted on an average of about 5.5% for 2009, resulting in an additional cost of about
$350,000 citywide.
Introduction: Budget Highlights • Section I — 25
FUEL
Oil prices continued to hit record high prices per barrel through July, 2008. To be
conservative, the 2009 budget contains an estimated increase of 10% or about $115,000
across all funds in the fuel accounts, although recent oil commodity futures prices indicate
the price of oil and gas may be abating Additionally, the high oil costs also affect other
operating supplies, such as asphalt used by the Street department. These effects have been
considered in the 2009 Budget Forecast development.
MAJOR CAPITAL PROJECTS
Capital project funds for 2009 are budgeted at approximately $56.6 million. The 2009
proposed budget includes new capital expenditures and a carryover of ongoing projects
previously approved by Council, as follows:
PROJECT BUDGETED AMOUNT
Water and Wastewater Capital Projects $7,935,100
(Including Wastewater Facilities Improvement
Major Street Construction Projects
66th Avenue and Summitview Signalization 665,000
Nob Hill Bridge Repair 2,000,000
16th Avenue and Washington Reconstruction 1,358,000
William O. Douglas Trail Enhancement 696,883
Railroad Grade Separation 18,800,000
Other Street Projects and Debt Service Payments 5,754,655
Total Major Street Construction Projects 29,274,538
Transit Capital 920,750
City Hall Rehabilitation 400,000
Parks Capital Improvements 1,275,000
Fire Capital 1,618,100
Capitol Theatre Expansion 9,728,750
Criminal Justice /Capital Expenditures 1,143,014
Convention Center Capital 268,000
Central Business District Improvements 257,235
Irrigation System Improvements 2,986,700
Stormwater Capital 325,000
Local Improvement District (LID) Construction 430,000
TOTAL CAPITAL PROJECTS $56,562,187
To fund these major projects, the City has:
• Secured grant funding and ongoing, dedicated street funding for a significant
portion of the street projects.
• Funded projects through the use of rates, reserves, grants and State loans and the
issuance of debt.
• Due to the nature of this category, it tends to fluctuate from year to year. Refer to
Section V, Capital Improvements, for more information on the above projects.
26 — Section I • Introduction: Budget Highlights
DEBT SERVICE COSTS
Most municipal organizations must issue long term bonded debt to finance capital projects
and improvements, and Yakima is no exception. This category includes the cost of
principal and interest payments on the City's outstanding bonded debt and capital leases.
➢ 2009 Budget of $5,785,119; an 14.1% or $949,376 decrease over the 2008 amended
budget of $6,734,575. This decrease is primarily due to the retirement of three
bonded debt issues.
Due to the nature of this category, it tends to fluctuate from year to year. Refer to Section V,
Capital Improvements, for more information on the above projects.
CHANGES IN FUNDING AUTHORIZATION
CHANGES IN PERSONNEL / STAFFING
In the 2008 amended budget, there were several positions that were included for only
a partial year. Council has already approved these positions, but the conversion from
a partial year to a full year will increase the respective budgets in 2009. Following is a
summary of these changes:
Stormwater Implementation — After much planning, City Council approved a Stormwater
program that is to ramp up over a few years. The new program is being funded by a utility
charge billed on the County's property tax billing, therefore, the first major cash receipt
wasn't until April, 2008. Because of the timing of the revenue flow and the recruitment
process, the 2008 budget included 5 positions (4 in Stormwater and 1 in Wastewater) that
were budgeted for a partial years.
Criminal Justice — Because of the increased workload related to the increased growth in
Police Department personnel, Council approved the addition of a Deputy Police Chief
in 2008, budgeted to start July 1, 2008. Additionally, Council approved a new dispatch
position to address growth in the City and related call volumes, to start April 1, 2008.
The 2009 budget includes the full annualized effect of these positions.
Introduction: Budget Highlights • Section I — 27
2009 PROPOSED ADJUSTMENTS IN PERSONNEL (')
No OF BASE SALARY
FUND /DEPT DESCRIPTION POSITIONS & BENEFITO REMARKS
GENERAL GOVERNMENT
041 - Engineering City Engineer .30 $43,200 2009 Budgeted Policy Issue (other 70%
funded by Utilities
TOTAL GENERAL FUND .30 $43,000
131 -Parks & Rec 3 Positions to Part time (.23) (11,500) Unfunded due to budget constraints
141 - Streets & Traffic Eng Sr. Traffic Sign Specialist (1.00) (63,500) 2009 Budgeted Policy Issue
Traffic Sign Specialist .50 29,750 Upgrade 2 3/4 time to full time
TOTAL GENERAL GOVERNMENT (.43) (2,050)
OTHER OPERATING FUNDS:
124 - Housing Eliminate ONDS Manager (1.00) (107,000) 2009 Budgeted Policy Issue
151 - Public Safety Public Safety Dispatcher 1.00 60,000 2009 Budgeted Policy Issue
Public Safety Lead Dispatcher 1.00 70,000
462- Transit Eliminate Transit Operator (.75) (40,600) Eliminate Union Gap Route
441 - Stormwater Maintenance Specialist II 2.00 94,000 2009 Budgeted Policy Issue
473 - Wastewater Eliminate Lab Tech (1.00) (67,000) 2009 Budgeted Policy Issue
To offset 55% of City Engineer
474 -Water Water Treatment Operator 1.00 58,700 2009 Budgeted Policy Issue
Other Utilities City Engineer .70 100,800 2009 Budgeted Policy Issue
515 -Risk Management Legal Assistant II .50 30,000 2009 Budgeted Policy Issue
TOTAL OTHER OPERATING FUND 3.45 198,900
TOTAL CITY -WIDE 3.02 196,850
(1) Salary and benefits shown reflect impact on 2009 budget only
In the 2009 budget, Management continues to accommodate Federal and State unfunded mandates
(as demonstrated by a net increase of 2 positions in Stormwater, Wastewater, and Water utilities)
and provide critical public safety and other essential services. In an effort to minimize costs and
increase efficiencies, management has increased, decreased and shifted personnel resources in the
2009 budget. The total net effect of these changes is an increase of 3.02 FTE positions at a net cost of
$196,850 in the 2009 budget.
RESOURCES
Total resources consist of the prior year's ending cash balance plus the current year's
revenues. Estimates of these two critical elements of the proposed 2009 budget are noted in
the following chart.
28 — Section I • Introduction: Budget Highlights
TOTAL RESOURCES
2008 2009
ESTIMATE BUDGET
GENERAL GOVERNMENT
Beginning Balance $8,186,216 $7,514,184
Revenues 57,082,070 58,905,780
TOTAL RESOURCES $65,268,286 $66,419,964
CITYWIDE
Beginning Balance $52,336,259 $49,568,290
Revenues 163,744,180 187,015,870
TOTAL RESOURCES $216,080,439 $236,584,160
Each of the five resource categories is listed below and discussed on the following pages.
Resource Categories:
Taxes (Unrestricted and Restricted /Dedicated)
Intergovernmental and State Shared Revenues
Charges for Services
Miscellaneous / Other Revenues and Financing Sources
Cash Reserves
TAXES
The following items make up the majority of the City's revenues that are derived from
taxes: Sales tax, Property tax, Utility tax (including franchise fees and business license fees),
Hotel / Motel tax, Gambling taxes, Other taxes (Real Estate Excise taxes, Tourist Promotion
fees, etc.) An overview of each of these major revenue sources for the City is provided
below. Section III includes a more detailed discussion of tax revenues allocated to General
Government operations.
SALES Tax — This category includes General sales tax, Criminal Justice sales tax, Hotel /Motel
tax, and Transit sales tax revenues. The total of the proposed 2009 Sales Tax budget is
$23,794,440; an increase of 3.4% over 2008 estimates.
General (Unrestricted) — This revenue is available for any City purpose; however, it is
primarily utilized to support General Government activities (e.g.: fire, police, municipal
court, finance, human resources, information systems, etc.) and is currently the largest
revenue source for the City's General Fund.
> 2009 Budget is $14,384,000; approximately $446,000 or a 3.2% increase over the
2008 year -end estimate.
> 2008 Year -end Estimate is $13,938,000; approximately $514,731 or 3.8% over
actual 2007 levels.
Introduction: Budget Highlights • Section I — 29
Criminal justice (Restricted) — This revenue is dedicated to criminal justice related
services such as police officers and equipment, prosecuting attorneys, jail costs and
Municipal Court costs.
> 2009 Budget is $3,034,300; approximately $115,050 or a 3.9% increase over the
2008 year -end estimate of $2,919,250.
Note: there are two components to the Criminal Justice Sales Tax revenues: (1) a 1992
voter approved sales tax of 0.1% and (2) a 2004 voter approved sales tax of 0.3 %. Both
of these taxes are authorized exclusively for criminal justice purposes. (Refer to Section
III for a more detailed discussion of this critical revenue source to the City.)
Hotel / Motel Tax (Restricted /Dedicated) — Consists of a 2% distribution of State Sales
Tax and 3% local option Hotel /Motel Tax; both dedicated for Tourist Promotion and
related debt service.
> 2009 Proposed budget is $1,278,140; an increase of $46,000 or 3.73% over the 2008
year -end projection.
Breakdown of 2009 revenue projection:
> $766,884 - 3% Local Option,
> $511,256 - 2% State credit; this revenue is dedicated to the payment of debt
service on the Convention Center bonds. Tax is scheduled to sunset when all
bonds to which this revenue source are pledged, are retired.
Transit Service (Restricted) — Approved by the voters, this revenue is legally restricted
to providing transit services and related costs.
> 2009 Budget is $5,098,000; approximately $172,000 or 3.5% increase over 2008
year -end estimate.
> 2008 Year -end Estimate is $4,926,000; approximately $188,767 or 3.8% increase
over 2007 actual levels.
Sales Tax Issues / Comments
Revenue Stability — Due to annexations and strong construction activity over the
past few years the city has benefited from stronger than average sales tax revenues.
However, new construction has been slowing nationally and is not anticipated to
continue at its current pace. Sales tax revenue is a critical revenue source for the city, as
it is nearly 24.4% of total general government revenue. However, even strong growth
in this significant revenue source is not expected to be sufficient to sustain existing
essential services in the future given the much weaker growth in other critical City
revenues.
30 — Section I • Introduction: Budget Highlights
Streamlined Sales Tax — For the past few years, there has been a move underway in the
State Legislature to change the basis on which local sales tax revenues are collected/
distributed. In 2008, legislation, known as Streamlined Sales Tax (SST), was passed by
the State Legislature which changes sales tax from an origin based to a destination based
collection model. This means that taxes on delivered goods would be collected at the point
of destination rather than at the point of sale (origin). Washington has used the origin based
model until the legislature passed Streamlined Sales Tax reform, effective July, 1st 2008.
The City has worked closely with other cities around the State to ensure that any SST bill
passed by the State of Washington includes full mitigation for any revenue losses that
would occur to cities, counties and other impacted jurisdictions as a result of changing to a
destination based Sales Tax model. This effort was successful; 100% mitigation is included
in the SST legislation. However, it is extremely difficult to estimate the impact of the SST
legislation on the City's Sales tax revenue. When this legislation was first introduced, the
State Department of Revenue (DOR) estimated the impact on the City would be a loss of
several hundred thousand dollars; however, a second study by the DOR resulted in an
estimated small gain to the City. The City currently anticipates little change (gain or loss) in
annual sales tax revenue as a result of the SST legislation. However, should this legislation
result in a loss of revenues to the City, there would be a negative impact on the City's 2008
revenues due to a one calendar quarter lag in the distribution of mitigation funding during
the transition from the origin to the destination based model.
PROPERTY Tax — The total of the proposed 2009 Property Tax Levy (budget) is $15,500,765; this
includes both General Purpose and Special Purpose (voted) Property Taxes.
General Purpose (Unrestricted) — This is the second largest revenue source for the City's
General Fund (second only to general sales tax revenues discussed above) and supports
basic services such as Police, Fire, Streets, Parks, Finance and the like.
> The 2009 budget for City -wide general - purpose property tax is approximately
$15.23 million, 2.2% increase over the 2008 year -end estimate of $14.9 million.
> City Administration is proposing a 1% increase in the property tax levy, as
currently allowed by state law, or approximately $149,000 budgeted revenue
increase. Additionally, staff projects new construction revenues to be another 1%
or $150,000, for a total 2.0% increase.
Special Purpose (Restricted) — The 2009 proposed budget includes $268,000 in Special
Purpose Property Taxes; previously approved by voters to pay the debt service on the
1995 Fire Bonds.
UTILITY TAXES, FRANCHISE FEES AND BUSINESS LICENSE TAXES - This category includes revenues from Utility
Taxes, Franchise Fees and Business License Taxes. Utility Taxes are the third largest revenue
source for the City's General Government Funds (after sales and property tax revenues).
> 2009 City -wide Budget is $13,419,716 (see restricted /unrestricted break -out below.)
Introduction: Budget Highlights • Section I — 31
Utility Taxes (Unrestricted) — Utility taxes and Franchise fees are imposed on private and
public utilities and make up the majority of this revenue (approximately $11.7 million);
a small portion of the unrestricted revenues comes from the business license tax ($.5
million). Although revenues from the business license fees are not legally restricted, a
portion of which are dedicated to pay the debt service on the Sundome bonds.
> 2009 General Government budget is $12,182,716; $397,516 or 3.37% above the
2008 year -end estimate of $11,785,200.
Utility Taxes (Restricted) — Cable TV; this category includes a franchise fee and utility
tax on Cable TV services. These revenues are dedicated to: Criminal Justice related
debt service and capital needs, the Capitol Theatre, and Community Relations Division
operations - public communications.
> 2009 Proposed Budget is $1,237,000 or .8% above the 2008 Year -end estimate of
$1,227,000.
OTHER TAXES - This category includes revenues from Gambling tax, Real Estate Excise Taxes
(REET) 1& 2, the Tourist Promotion fee and other minor miscellaneous tax revenues.
> 2009 proposed budget is $2,557,250; a $11,400 or .4% decrease from the 2008 year -end
estimate of $2,568,650.
Gambling Tax Revenues (Unrestricted) — This category includes revenue from card
rooms, bingo, punch- boards and pull -tabs.
> 2009 Proposed Budget of $931,750 is virtually the same as the 2008 year -end
estimate of $918,400. Revenues from this source appear to have peaked and are
beginning to trend down slightly from their higher levels of recent years. (See
further discussion in Section III).
Real Estate Excise Tax (REET) (Restricted) — The City imposes a total of 0.5% tax on
real estate sales. Low interest rates, spurring new construction of homes, and strong
existing home sales have boosted this revenue source in recent years. However, current
turmoil in the credit markets has caused a contraction both in new construction and
existing home sales nationally. Average home prices are falling and it has become
difficult for buyers nation -wide to obtain affordable mortgages. Yakima, however has
shown surprising resiliency to these negative influences as average home prices and
volume of sales reveal only modest contraction thus far. It can only be speculated at this
time how long the difficulties in the housing market will last nationally, or, if conditions
in Yakima will deteriorate any further. Yakima has a uniquely stable economy due to
its solid agricultural base and central location in Washington State, which may well
insulate it from many of the housing related difficulties being suffered by much of the
rest of the nation.
32 — Section I • Introduction: Budget Highlights
> The total 2009 proposed budget is $1.6 million; $200,000 below the 2008 budget of
$1.8 million, but down slightly from the 2008 year -end forecast of $1.62 million.
(Each .25% excise tax is expected to generate approximately $800,000).
The total 0.50% Real Estate Excise tax consists of:
> The first 0.25% was imposed in 1986 and is restricted to use on Public Works
capital projects.
> The second 0.25% excise tax became effective January of 2004; these revenues
are restricted to capital projects included within the growth management capital
facilities plan.
Tourist Promotion Area (TPA) (Restricted) — In 2003, at the request of the local hotel
and motel organizations - City Council established a Tourist Promotion Area (TPA)
and imposed TPA fees to over -night guest stays. The revenue generated by this fee
is restricted to tourist promotion activities and is expected to generate approximately
$405,088 in 2009. The revenue is restricted to enhancing tourism activities.
Tax Revenue Summary — General government funds receive approximately 76% of their
unrestricted revenues from taxes. Although tax growth approximates inflation, the cost of
providing services to the expanded city is growing at a faster rate. (August 2008 All Urban
Consumer CPI -U, U.S. City Average is 5.4 %, per the Bureau of Labor Statistics, for the
Seattle - Bremerton- Tacoma area.)
INTERGOVERNMENTAL AND STATE - SHARED REVENUES
This category includes revenues to the City from State and Federal grants; that portion
of revenues collected by the State that are allocated to the City and restricted local
government assistance funding.
> 2009 Budget is $37,592,290; 17.25% or $5,531,183 above the 2008 amended budget
of $32,061,107. Grants associated with the Railroad Grade Separation project
are increasing by almost $9 million between years, as the project is moving into
construction phase in 2009. (Note: Due to the types of revenues included in this
category, it can fluctuate significantly from year to year.)
The major revenue sources in this category include:
• Federal Housing and Urban Development (HUD) - Community Development Block
Grant. (CDBG) for 2009 is $1,620,091.
• State gas tax: 2009 budget is $1,950,000. This tax is dedicated to city streets and is
distributed by the state based on a predefined formula.
• Liquor Profits /Excise Tax: Combined 2009 Budget is $1,039,500; $40,500 above the
2008 year -end estimate and $41,500 above the 2008 budget of $998,000. A portion
Introduction: Budget Highlights • Section I — 33
of this revenue is restricted to substance abuse programs. As this is a per capita
distribution, recent annexations positively affect this revenue source.
• Federal Transit Administration: 2009 budget is $1,650,000; the same amount as the
year -end estimate. This money is operating assistance dedicated to the City's transit
system.
• State Transportation Improvement Board (TIB), Federal Highway Administration
(FHA), and State Department of Transportation (WSDOT) funding make up most of
the rest of this category.
CHARGES FOR SERVICES
This category of revenues includes charges for more than 100 different services provided by
the City that are partially or primarily supported by the users of those services, (example
utility rates charged to utility customers.)
> 2009 Budget is $38,654,686; 5.76% or $2,105,846 over the 2008 amended budget of
$36,548,840.
Note: the above revenues include the continuation of issues for: 2008 approved policy: (1)
5.5% water rate and (2) 3.5% increase rate for Wastewater.
MISCELLANEOUS I OTHER REVENUES AND FINANCING SOURCES
Revenues grouped into this category include; inter -fund operating transfers (2009:
$13.57 million); debt proceeds (2009: estimated to be $7.5 million); licenses and permit
revenues (2009: $1.47 million), convention center operating revenues; assessments, such
as Local Improvement District (LID), Parking and Business Improvement Area (PBIA),
and Stormwater; interest earnings; utility connection charges; and other miscellaneous
revenues. (License / permit revenues include charges for building, plumbing, mechanical
and sign permits, dog licenses, wastewater discharge permits and other similar
miscellaneous revenues.)
> 2009 Budget is $55,091,635; 5% or $2,600,611 above the 2008 amended budget of
$52,491,024. The increase is primarily due to the Capitol Theater expansion project
private contribution of $2,300,000.
Due to the types of revenues included in this category, it tends to fluctuate from year to
year.
CASH RESERVES
Total City resources consist of revenues (discussed above) and reserves. Prudent fiscal
management dictates that reserves be budgeted to prepare the city for potential shortfalls in
revenue projections, unbudgeted policy issues which Council may approve, unanticipated
expenditure requirements during the budget year and /or other contingencies.
34 — Section I • Introduction: Budget Highlights
The City endeavors to maintain operating reserves for general government activities
in an amount equal to approximately one month's operating budget expenditures,
(i.e.: approximately 7% to 8 %). The 2009 year -end cash balance (reserves) in general
government is projected at 8.37% of the 2009 general government expenditures. On
average, operating budgets of other funds (i.e.: funds for non - general government activities
such as utilities, economic development, etc.) maintain an operating reserve of one to three
months of their operating costs, subject to some one -time expenditures, as necessary, from
time to time.
2009 year -end reserves for all funds are projected to be approximately $32.3 million, as
noted in the following chart.
CATEGORY RESERVES
General Government Funds (incl.: Police, Municipal Court, Fire, $5,475,000
Engineering, Finance, Streets, Parks, etc.)
Other Operating and Enterprise Funds 10,328,000
Capital Improvements 5,765,000
Contingency / Operating 1,476,000
Employee Benefit 5,502,000
Trust and Agency 569,000
Debt Service 3,201,000
Total $32,316,000
Each year the City budget, as a whole, includes cash reserves, most of which are limited to
a specific purpose(s); see further information, below, regarding restrictions and dedications
of reserve funds. (Refer to Exhibit I for more information on reserve funds.)
RESERVE RESTRICTIONS / DEDICATIONS - The City maintains reserves for many different purposes;
some reserve funds are available for emergencies and unanticipated expenditure needs
during the year and other reserves are legally or contractually restricted and may only
be used for a specific purpose (such as the repayment of debt; support of a specific
construction project; payment of retirement expenses and so on.) The dedications and
restrictions, if any, on reserves, are noted below.
General Government Reserves — This category is made up of reserves for the general
fund, parks fund and the street fund. General fund reserves are primarily unrestricted
and maintained to offset unanticipated reductions in revenues, unanticipated
expenditures and other emergencies. Parks and Street funds reserves are restricted to
operations and maintenance costs within these funds.
Operating and Enterprise Reserves — (1) Operating reserve funds are special revenue
funds, which, by law or legislation, are restricted to the operations, maintenance and
capital costs for a designated purpose; (example, grants for economic development;
assessments on local businesses for parking and business improvements, etc.) NOTE:
there may be a small portion of funds in this category which are not legally restricted;
(2) Enterprise reserves are generated from revenues received for transit services or
from refuse, water and irrigation or wastewater utilities; a separate fund is set up to
Introduction: Budget Highlights • Section I — 35
track revenues and expenditures for each of these services. Reserves in these funds
are restricted in use to the operation and maintenance needs of the specific fund from
which they were generated.
Capital Improvement Reserves – – Capital funds are established, by law, to account for the
receipt and disbursement of moneys used for the acquisition of capital. Reserves are built up
over time to support capital improvements and are designated either for payments on the
debt of past improvements or to build a reserve to cover the cost of future improvements.
Contingency and Operating Reserves – These funds include (1) a general contingency
fund which is available to cover emergencies and unanticipated expenditures in any
fund within the City; although they are primarily designated to cover contingencies in
the General Government Funds; (2) a Capitol Theatre reserve fund of approximately
$542,000. This fund was originally established from a $1 million endowment; the
interest on which is utilized for, and restricted to, operating and maintenance costs of
the Theatre. During 2008, a portion of the original endowment was utilized to help
fund major capital improvements to the Capitol Theatre, therefore the level of the
reserve fund has been reduced; (3) a Risk Management reserve fund which covers the
City's stop loss insurance costs, excess costs of claims, insurance / professional services
costs and other miscellaneous "risk – management related" costs.
Employee Benefit Reserves – Funds in this category are designated for the payment
of unemployment compensation, employee health benefits, workers' compensation,
employee wellness, and Firemen's relief and pension costs. (NOTE: The City is self
insured for the above costs and is required to pay claims as they arise. Therefore it is
prudent to keep reserves at a level adequate to pay all claims as they become due.)
Trust and Agency Reserves – ((1) Trust fund reserves are restricted to the purpose(s) for
which the trust or endowment was originally designated (for example, cemetery trust
fund requires interest on the endowment to be used for operating and maintaining the
cemetery; the principal may not be utilized for any purpose); (2) Agency fund reserves
are established as "pass through funds" for the purpose of providing payments to a
third party and carry a zero balance —the City does not currently have an agency fund.
Debt Service – These funds are restricted to the repayment of debt.
The State of Washington has a law which provides that "one fund cannot benefit" another fund.
State law also establishes the rule that a "fund" or a self - balancing set of records be established
if revenue sources are restricted for specific purposes. This rule enforces the concept that
money collected for a specific purpose must be used for that purpose. (For example, the utility
funds are self- supporting; the rates charged are designed to recover the costs of providing the
utility services. Therefore, these funds may not be used for police or firefighters.)
Reserves are generally built up over time; they are non - recurring, and once they're spent
they're gone (i.e., there is no revenue source that will automatically fund these reserves
once they are spent.)
36 – Section I • Introduction: Budget Highlights
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 a 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 6.5% while the City receives .85%
for the general fund and an additional 0.3% that is restricted for transit services, and .15% goes to
the County, and .40% represents county wide 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 Yakima Transit
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What You Pay and What You Get • Section II —
SALES TAX RATES WITHIN YAKIMA CITY LIMITS
(in descending order by total allocation)
EXAMPLE
RATE % OF TOTAL ($100 SALE)
State of Washington 6.50% 79.3% $6.50
City of Yakima (General Fund) (1) 0.85% 10.3% $0.85
Yakima Transit 0.30% 3.7% $0.30
Yakima County (Current Expense Fund) ( 0.15% 1.8% $0.15
Yakima County Criminal Justice (2) 0.40% 4.9% $0.40
TOTAL SALES TAX RATE IN CITY LIMITS 8.20% 100% $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 2008 property taxes were allocated between these governmental entities.)
2008 PROPERTY TAX DISTRIBUTION
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CITY OF YAKIMA PROPERTY TAX — In 2008, a typical City resident pays approximately $11.75 per thousand
of assessed value on property taxes. Only $3.01, or about 25.7% 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.
2- Section II • 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.
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 #334 (YAKIMA SCHOOLS) - CONSOLIDATED LEVY AND RATES
2007 ASSESSED VALUATION - 2008 TAX YEAR
AMOUNT PERCENT
2007 2008 OF
PROPERTY TAX LEVY RATE LEVY LEVY
CITY LEVY
General Fund $1.472 $7,510,918
Parks & Recreation .352 1,800,000
Street & Traffic Operations .827 4,220,202
Firemen's Relief & Pension .304 1,551,730
Total Operating Levy $2.955 $15,082,850 25.2%
Total Bond Levy 0.058 294,000 0.5%
TOTAL CITY LEVY $3.013 $15,376,850 25.7%
OTHER LEVIES
School District #7 37.3%
Operation & Maintenance $2.741 $13,809,020
Bond Redemption 1.636 8,242,582
State Schools 2.027 10,348,490 17.3%
Library 0.462 2,357684 3.9%
Yakima County 1.498 7,644,224 14.0%
Yakima County Flood Control 0.087 446,117
Juvenile Justice Bond 0.063 317449
EMS Levy 0.219 1,115,803 1.9%
TOTAL OTHER LEVIES $8.733 $44,281,369 74.3%
TOTAL LEVY CODE #334 $11.746 $59,658,219 100.00%
What You Pay and What You Get • Section II - 3
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 /Sewer; Irrigation for 7,000 square foot lot; Stormwater based on impervious surface; Gas/
electricity $2,400, telephone $960, cable television $600. Based on these assumptions, a typical
household in Yakima paid approximately $178 a month, or $2,139 a year, as depicted in the
following charts.
ANNUAL TAXES AND UTILITY CHARGES LEVIED
BY THE CITY OF YAKIMA ON THE TYPICAL HOUSEHOLD FOR 2008
REVENUE RATE PER 1,000 COST PER HOUSEHOLD
Property Taxes - General $2.955/1,000 $355
Special Levy Property Taxes $0.058/1,000 7
Sales Taxes - General 121
Transit Sales Tax 30
Tax on City -owned Utilities - General 132
Tax on Private Utilities - General 238
Water, Wastewater and Refuse Utility Charges (excluding Utility Tax) 1,010
Stormwater 35
Irrigation Assessment 211
TOTAL ANNUAL CITY TAXES, UTILITIES AND ASSESSMENT CHARGES $2,139
CITY TAXES AND UTILITY CHARGES
COST TO TYPICAL HOUSEHOLD — $2,139 ANNUALLY
Parks
Department
$48 Wastewater
Water $563
X 1
$260
Stormwater
Streets $35
Department
$73
Transit Division
O $30
Refuse $
Other h
G
Other Special
Revenue Funds
$28 1 C ; ( 4 11/////1:7
eral IIIIIIIIIIIIIIIIIIIIII Debt Service Funds
Government
$76
Special Levy Debt
$7
Irrigation
$211 Public Safety
$569
Capital Project
Funds
$38
4 — Section II • What You Pay and What You Get
GENERAL GOVERNMENT REVENUE
The total 2009 proposed General Government Revenue Budget is approximately $58.9 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 over 72% of
the total general fund revenues.
GENERAL GOVERNMENT REVENUE
(BASED ON 2009 BUDGET OF $58.9 MILLION)
29.1 19.8 7.3 4.0
Sales Tax Franchise & Intergovernment & Other
Utility Tax State Shared Revenue Revenue
($17.1 Million) ($11.7 Million) ($4.3 Million) (2.4 Million)
s ° ; h .._ .. ` A221 235651 A h
I s A 2 212 3 5 6 i 5 A ,, ! -' INO,OK.>u.(1, K
` s ' • IC
o�i: sii� DOLL:
1. 1(
. a, rF FAIRER n� .1r11....� � .
23.3 11.3 5.3
Property Tax Licenses, Permits Fines &
($13.7 Million) & Charges Other Taxes
for Services ($3.1 Million)
($6.6 Million)
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
Code Administration services. These functions use about 84.9% of General Government revenues.
Other administrative services include Information Systems (i.e. computer support), Legal, Finance,
and Human Resources — services necessary for any organization to function.
GENERAL GOVERNMENT EXPENDITURES
The following chart depicts the breakdown of the proposed 2009 general government expenditure
budget. This breakdown identifies that the City spends over 60% (or approximately $39.6 million)
of its available resources on providing public safety services (Police, Municipal Court, Fire, Code
Enforcement and Dispatch services). Additionally, the City allocates over 9.9% of its resources to
maintaining and operating the Streets and Traffic Systems and another 7.2% to provide Parks and
Recreation programs and services. Providing the existing services in these four basic categories
takes nearly 82.1% of all the City's available general government resources.
Providing the services in these four critical areas is labor intensive; approximately 72.2% 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.: Finance
and Legal, Community Planning and Project Engineering; Administration and the Library).
What You Pay and What You Get • Section 77 - 5
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
(BASED ON 2009 BUDGET OF $60.9 MILLION)
45.4 9.9¢ 7.2¢ 3.5¢
Police & Streets & Parks & Community Planning
Courts Traffic Recreation Project Engineering
$27.7 Million $6.0 Million $4.4 Million $2.1 Million
I I I I
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Ifl 1' K "ri� " � l h A2212.1565 A 1.
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1 A22123565 A , A ), -1 . _ li Of -
' l :—
aar z � f B ONE I FIR HOC .Alf r
19.6° 7.7¢ 6.7¢
Fire / Code Financial & Governance/
Enforcement Legal Services Administration
$11.9 Million $4.7 Million $4.1 Million
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
2009. 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.
Municipal public safety services consume the greatest share of local taxes, $569 per household per
year, or 67.1% of the total general taxes paid. Other General Government services cost $76 per
household annually, or 9.0 %. Streets and Parks together cost $121 per household annually, or 14.5%
of general taxes paid.
The utilities combine to cost approximately $1,010 annually per household. (Many of the costs
included in the budgets of the utilities fund State and Federal mandates that local citizens must
pay.)
6 — Section II • What You Pay and What You Get
ALLOCATION OF TAXES AND UTILITY CHARGES
(BASED ON 2009 PROPOSED BUDGET - BUDGET NUMBERS IN THOUSANDS)
2009 NON -TAX ALLOCATION HOUSEHOLD 2009 PERM.
PROPOSED FUNDING LOCAL OF TAXES TYPICAL BUDGETED
BUDGET SOURCES TAXES COLLECTED COSTS (I) POSITIONS
LOCAL DIRECT GENERAL PURPOSE TAX SUPPORTED FUNCTIONS
Public Safety (Police Fire & Pensions) $40,109 $6,340 $33,769 67.1% $569 324.50
General Government 16,221 11,688 4,533 9.0% 76 139.29
Streets Department 6,046 1,732 4,314 8.6% 73 43.00
Parks Department 4,378 1,504 2,874 5.7% 48 25.60
Other Special Revenue Funds 3,637 1,946 1,691 3.4% 28 16.34
Debt Service Funds 2,451 1,607 844 1.7% 14 0.00
Capital Project Funds 21,583 19,297 2,286 4.5% 38 0.00
LOCAL DIRECT SPECIAL PURPOSE TAX SUPPORTED FUNCTIONS
Special Levy Debt 475 207 268 7 0.00
Transit Division 8,404 3,306 5,098 30 50.50
NON -LOCAL TAX SUPPORTED FUNCTIONS
Street Construction 26,777 26,777 0 0 0.00
Refuse - 18,767 Residential accounts 4,676 4,676 0 187 19.00
Wastewater- 22,591 Residential accounts 24,698 24,698 0 563 63.94
Water - 17,349 Residential accounts 9,973 9,973 0 260 30.98
Equipment Rental 6,181 6,181 0 0 11.85
Public Works Administration 1,199 1,199 0 0 9.05
Self - insurance Reserve 4,956 4,956 0 0 0.00
Employee Benefit Reserve 9,515 9,515 0 0 0.00
Irrigation- 10,541 Residential accounts 6,094 6,094 0 211 9.19
PBIA 208 208 0 0 0.00
Storm Water 2,127 2,127 0 35 9.56
TOTALS $199,708 $144,031 $55,677 100% $2,139 752.80
(1) Based on 2009 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 /sewer; irrigation for 7,000 square foot
lot; gas /electricity $2,400, telephone $960, and cable TV $600.
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 2008 fell on April 23rd, three
days earlier than it did in 2007. Tax Freedom Day was on April 26th and April 23rd in 2006 and 2005,
respectively. On average in 2008, Americans will work 74 days to afford their federal taxes and 39 more
days to afford state and local taxes.
According to the Foundation's report, "Tax freedom has been a see -saw affair in recent years. In 2000,
Tax Freedom Day was celebrated May 3rd, the latest date ever. Then a string of tax cuts between 2001
and 2003 pushed Tax Freedom Day up by more than two weeks, so that it fell on April 16th in 2003 and
April 17th in 2004. For the next three years, incomes and tax collections soared, pushing Tax Freedom
Day back to April 26th in 2007. Now the stimulus rebates and a projected slowing of income growth
have made Tax Freedom Day come three days earlier, on April 23rd."
What You Pay and What You Get • Section 77 - 7
Since 1977, state and local tax burdens have risen and fallen from a high of 10.4% in 1994 down to 8.9%
in 2008. The report indicates that Washington State is ranked 5th highest in the nation for federal per
capita taxes paid in 2008. However, it is ranked 35th in the nation for state and local taxes per capita.
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.) It also demonstrates how small the state and local tax burden is in comparison to
the total taxes paid — at less than one third of the total tax burden.
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.
8 - Section II • What You Pay and What You Get
GENERAL GOVERNMENT: YEAR IN REVIEW
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 and district
courts, financial services, purchasing, information systems, etc.
➢ 2008 Year -end revenue estimate is $47,228,705 — $2,174,060 or 4.8% over actual levels for
2007, slightly less than the rate of inflation.
➢ 2008 year -end expenditure estimate is $47,545,767 — $926,463 or 1.9% under the authorized,
amended budget of $48,472,230, due largely to savings in outside jail costs in the Police
Department, overtime savings in Police and Fire and salary savings from position vacancies
PARKS AND RECREATION FUND
Services provided include Parks programs and maintenance.
➢ 2008 year -end revenue estimate is $4,233,168 — $4,103 or 0.1% over the actual levels for
2007 — virtually flat. There were several fluctuations in revenue sources demonstrating less
reliance on property taxes and higher program income in many areas, netting to little overall
change.
➢ 2008 year -end expenditure estimate is $4,349,657 — $71,250 or 1.6% under the 2008 amended
budget. The modest decrease is related mostly to salary savings from position vacancies.
STREET FUND
Street and Traffic operations and maintenance.
➢ 2008 year -end revenue estimate is $5,620,197 — $53,501 or 1% less than actual levels for 2007.
This decrease is explained primarily by reduced gas tax revenue.
➢ 2008 year -end expenditure estimate is $5,858,678 — $355,155 or 5.7% under the 2008 amended
budget. The expenditure savings result primarily from salary savings due to unfilled
positions (including the Streets Manager for most of the year).
2008 GENERAL GOVERNMENT
ESTIMATED REVENUES AND EXPENDITURES
PARKS AND STREET
GENERAL FUND RECREATION FUND FUND TOTAL
ACTUAL BEGINNING BALANCE $6,250,708 $549,439 $1,386,069 $8,186,216
Estimated Actual Revenue 47,228,705 4,233,168 5,620,197 57,082,070
TOTAL ESTIMATED RESOURCES 53,479,413 4,782,607 7,006,266 65,268,286
Less: Estimated Expenditures 47545,767 4,349,657 5,858,678 57,754,102
ESTIMATED ACTUAL ENDING BALANCE 2008 $5,933,646 $432,950 $1,147,588 $7,514,184
General Government: Year in Review • Section III —1
GENERAL GOVERNMENT COMPARISON
2008 BUDGET VS.YEAR-END ESTIMATE
2008 2008 YEAR -END EST.
AMENDED YEAR -END AS PERCENT OF
FUND /DEPARTMENT BUDGET ESTIMATE VARIANCE BUDGET
Police $21,325,811 $20,855,954 $469,857 97.8%
Fire 8,443,241 8,431,972 11,269 99.9%
Information Systems 2,844,751 2,841,910 2,841 99.9%
Transfers 2,342,535 2,317,130 25,405 98.9%
Code Administration 1,645,403 1,620,995 24,408 98.5%
Police Pension 1,412,950 1,350,521 62,429 95.6%
Legal 1,354,666 1,364,741 (10,075) 100.7%
Financial Services 1,453,768 1,439,025 14,743 99.0%
Municipal Court 1,289,964 1,211,943 78,021 94.0%
Engineering 1,154,964 1,097,201 57,763 95.0%
Utility Services 1,091,136 1,054,353 36,783 96.6%
Environmental Planning 737,706 731,261 6,445 99.1%
Records 490,224 420,551 69,673 85.8%
City Manager 488,608 488,174 434 99.9%
Human Resources 465,627 455,619 10,008 97.9%
City Hall Maintenance 418,299 405,187 13,112 96.9%
Indigent Defense 385,000 375,000 10,000 97.4%
Purchasing 271,231 263,617 7,614 97.2%
Intergovernmental 288,685 286,660 2,025 99.3%
City Council 204,961 204,803 158 99.9%
Sun Dome 150,000 150,000 0 100.0%
State Examiner 103,000 100,000 3,000 97.1%
Hearing Examiner 71,000 51,000 20,000 71.8%
Probation Center 25,000 25,000 0 100.0%
District Court 13,700 3,150 10,550 23.0%
TOTAL GENERAL FUND $48,472,230 $47,545,767 $926,463 98.1%
Parks & Recreation 4,420,907 4,349,657 71,250 98.4%
Street & Traffic Operations 6,213,833 5,858,678 355,155 94.3%
TOTAL GENERAL GOVERNMENT $59,106,970 $57,754,102 $1,352,868 97.7%
The preceding table provides a breakdown of the year -end estimate of General Government
budgets for 2008. The largest positive variance (expenditure savings) is in the Police Department
and relates to outside jail costs and salary and overtime savings in that budget. In the Streets
Division the savings are due to position vacancies including the Streets Manager.
GENERAL FUND THREE YEAR COMPARISON
2006 2007 2008 YEAR -END
ACTUAL ACTUAL ESTIMATE
BEGINNING BALANCE $4,762,269 $5,439,858 $6,250,708
Revenues 43,792,879 45,054,646 47228,705
TOTAL RESOURCES 48,555,148 50,494,504 53,479,413
Expenditures 43,115,290 44,243,796 47,545,767
ENDING BALANCE $5,439,858 $6,250,708 5,933,646
2 - Section III • General Government: Year in Review
GENERAL GOVERNMENT: 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 2009, total General Government revenues are budgeted to be $58,905,780, $1,823,710 or 3.2%
more than the 2008 year -end estimate of $57,082,070. Total beginning cash reserves are estimated
to be $7,514,180, $672,036 or 8.2% less than the 2008 estimate of $8,126,216. The decline in cash
reserves is occurring in the General Fund and Street Fund. The General Fund is impacted by
substantial increases in public safety costs and increases in mandated and operating costs. The
effects of recent annexations and expected decreases in gas tax revenues, are stretching the Streets
Fund resources to deliver services. Sales tax, spurred by construction and durable goods spending,
is exhibiting the best overall dollar growth trends. Permitting activity suggests this trend should
continue into 2009.
➢ The modest increase in Franchise and Utility taxes (2008 over 2007) is largely due to the
termination of the Bonneville Power Administration Tax Credit and is responsible for a
19% increase in electric utility tax in 2008 over 2007. Natural gas utility tax is actually
estimated to decreased in 2008 compared to 2007 due to a rate decrease. Cell phone utility
tax showed a 17% increase 2008 over 2007 as mobile communication grows in popularity.
It is not predictable whether this tax increase can be sustained in light of current economic
conditions.
➢ State shared revenue is down 2008 over 2007 due primarily to the reduction in the per gallon
gas tax caused by a reduction in the number of gallons of gas sold as a result of escalation in
fuel prices. This revenue source is not currently being relied upon to last throughout all of
2009, although new programs and changes in existing formulae could change that.
➢ Fines and forfeitures showed a significant percentage increase in 2008 over 2007 as an
increase in the number of Police Officers on the street produces more infractions and
misdemeanor penalties being assessed. This is projected to continue into 2009.
➢ Other taxes are down 2008 from 2007 actuals due to a delinquency with one gambling
establishment taxpayer that began in the fourth quarter of 2007 and continued into 2008,
resulting in the 2008 decrease. No increase in this source is expected in 2009 as that taxpayer
has filed bankruptcy. Otherwise, this category is typically rather flat.
➢ Other Intergovernmental Revenue up from 2007 to 2008, and then again for 2009 due to
expected receipt of higher grant revenue, primarily in the area of Law and Justice. The City
continues to actively pursue grants as they become available.
General Government: Revenue Trends • Section III — 3
GENERAL GOVERNMENT RESOURCES
THREE YEAR COMPARISON
2009 % OF - -- 2009 vs. 2008 - --
2007 2008 PERCENT BUDGET 2009 INCREASE PERCENT
SOURCE ACTUAL ESTIMATE CHANGE FORECAST TOTAL (DECREASE) CHANGE
General Sales Tax $13,423,269 $13,938,000 3.8% $14,384,000 24.4% $446,000 3.2%
Crim. Justice Sales Tax* 2,378,160 2,620,000 10.2% 2,729,000 4.6% 109,000 4.2%
Property Tax 12,678,715 13,348,002 5.3% 13,700,000 23.3% 351,998 2.6%
Franchise & Util. Taxes 10,534,541 11,265,200 6.9% 11,662,716 19.8% 397516 3.5%
Charges for Services 5,360,155 5,551,116 3.6% 5,843,705 9.9% 292,589 5.3%
State Shared Revenue 3,000,203 2,939,900 (2.0 %) 2,907,600 4.9% (32,300) (1.1 %)
Fines and Forfeitures 1,420,275 1,550,250 9.2% 1,632,900 2.8% 82,650 5.3%
Other Taxes 1,666,492 1,478,100 (11.3 %) 1,477,200 2.5% (900) (0.1 %)
Other Revenue 1,393,657 1,268,178 (9.0 %) 1,242,170 2.1% (26,008) (2.1 %)
Transfers from other Funds 1,063,126 1,084,000 2.0% 1,139,000 1.9% 55,000 5.1%
Other Intergovernmental 1,056,731 1,167,324 10.5% 1,373,489 2.3% 206,165 17.7%
Licenses and Permits 982,084 872,000 (11.2 %) 814,000 1.4% (58,000) (6.7 %)
TOTAL REVENUE $54,957408 $57082,070 3.9% $58,905,780 100.0% $1,823,710 3.2%
Beginning Fund Balance 6,935,112 8,186,216 18.0% 7,514,180 ($672,036) (8.2 %)
TOTAL RESOURCES $61,892,520 $65,268,286 5.5% $66,419,960 $1,151,674 1.8%
* Some Criminal Justice sales tax is allocated to the Law and Justice capital fund (a non general Governmental fund) for capital needs. (See section IV for details.)
GENERAL GOVERNMENT RESOURCES
2008 YEAR -END ESTIMATE AND 2009 BUDGET FORECAST
Dollars in Millions
Source 0 I 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17
Sales Tax /Crim Justice Sales Tax Mil. $17,113,000
Property Tax IMKIMII $13,700,000
Franchise & Utility Taxes $11,662,716
Charges for Service $5,843,705
State Shared Revenue _ $2,907,600
2009 vs. 2008 Estimate Increase in
MI $1,632,900 Total Resources
Fines and Forfeitures Amount $1,151,674
Percent 1.8%
Other Taxes . $1,477,200
Other Revenue ■ $1,242,170
$1,139,000
• 2009 Budget Forecast
Transfers from Other Funds • 2008 Year -End Estimate
I n Other Intergovernmental $1,373,489
Licenses and Permits $814,000
Beginning Fund Balance $7 514,180
4 - Section III • General Government: Revenue Trends
GENERAL SALES TAX (SINGLE LARGEST REVENUE SOURCE FOR GENERAL FUND)
➢ 2009 revenue projection is $14,384,000 — $446,000 or approximately 3.2% more than the 2008
year -end estimate of $13,938,000.
When compared to the rate of inflation, the City has realized three consecutive years of modest
growth in this revenue source. 2007 demonstrated 6.4 % growth over 2006, and 2008 to date is
about 3.8% above the 2007 levels. This has been mostly a product of new home and commercial
construction and durable goods purchases, which has been initiated by a relatively low interest rate
environment. Another factor of the new construction appears to be development in newly annexed
areas and, to some extent, the City's designation as a renewal community which generates tax
incentives to the private sector for capital investments that create jobs in its boundaries. The City
has conservatively estimated Sales tax growth for 2009 at 3.2% above 2008 year -end estimates due
to anticipated contraction in the new home construction market and related durable goods sales.
The Streamlined Sales Tax legislation to change the point of sale from origin based to destination
based was approved in the 2008 legislative session and began July 1, 2008. The Department of
Revenue has issued two separate reports on the effect of this change on local governments, with
the first one predicting the City will experience a net loss and the second one a slight net gain. If
there is a loss of sales tax revenue as a result of this change, the legislation allows for mitigation, but
there would be a lag time of one quarter, if mitigation is warranted. Additionally, a major retailer
is moving out of the City limits. Therefore, even though there has been a higher growth rate in
sales tax in the most recent two years, Sales Tax has been conservatively budgeted in 2009 at a 3.2%
growth rate over 2008 year -end estimates. Over recent years, this has been the average increase in
Sales Tax revenues.
In CPI adjusted 2000 dollars, Sales Tax is just above 2000 levels (see constant dollar graph later
in this section). The City experienced a slowing of sales tax growth in 2000 caused by several
factors, including a downturn in the agricultural industry and the loss of retail shopping from the
downtown due to the mall's closing and conversion to other uses. Beginning in 2002, sales tax
started a recovery for the reasons mentioned above.
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 Section II for more information.)
The following chart identifies Yakima's sales tax revenues as they relate to the total General Fund
operating revenues (excluding inter -fund 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. The decrease in the 2008 estimate reflects
an expected deceleration in the sales tax growth rate, due to economic conditions.
General Government: Revenue Trends • Section III — 5
PERCENT OF SALES TAX
COMPARED TO OPERATING REVENUE
GENERAL FUND
40%
38%
36%
34%
32%
30%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
COMPARISON OF PER CAPITA SALES TAX WITH OTHER WASHINGTON STATE CITIES
The City's sales tax per capita is compared with 11 other similar sized cities throughout the State
(see the following chart). The data shown was compiled from the State Auditor's Office statistics,
and is the most recent data available. Although sales tax revenue is the City's largest single source
of General Government revenue, the City's collections are the fifth lowest out of the 12 comparable
cities. The City of Yakima's per capita sales tax is $242, lower than 7 of the cities compared.
2006 PER CAPITA SALES & USE TAXES
COMPARABLE CITIES BETWEEN 30,000 AND 90,000 IN POPULATION
(rounded to the closest dollar)
$450- $386 $397
$40- Yakima's per capita sales tax is $242, which is $47 less than $354 $363 $370
the average city per capita of $289
$350- $305
$294
$300
$242
$250- $186 $202
$179 $184
$200 -
$150 -
$100 -
$50-
$0
Pasco Walla Walla Richland Kennewick Yakima Bellingham Kent Renton Auburn Kirkland Olympia Redmond
* Data compiled from the State Auditor's Local Government Comparative Statistics.
CRIMINAL JUSTICE SALES TAX
0.1% Sales Tax — A special 0.1% Criminal Justice Sales Tax was 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. The General Fund and the Law and Justice Capital Fund receives the full
amount of the City's share of these sales tax revenues; these revenues are restricted to providing
criminal justice related services and are allocated based on operating vs. capital needs.
This tax is expected to generate $1,053,500 for the City in 2009 and is allocated in the City's budget
forecast as noted in the following chart.
6 — Section III • General Government: Revenue Trends
0.1% CRIMINAL JUSTICE SALES TAX
2008 YEAR -END 2009 BUDGET
FUND 2007 ACTUAL ESTIMATE FORECAST
General Fund $885,966 $940,000 $980,000
Law and Justice Capital 70,000 73,500 73,500
TOTAL $955,966 $1,013,500 $1,053,500
Since population is a component of the tax distribution, annexations have a positive influence on
this revenue. This tax revenue is affected by the same regional economic factors that affect the
General Sales Tax revenue, as outlined above.
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: Public Safety
Communications and Law and Justice Capital Finds are not part of General Government.) This tax
is expected to generate $1,980,800 in 2009, and is allocated in accordance with the following chart.
0.3% CRIMINAL JUSTICE SALES TAX
2008 YEAR -END 2009 BUDGET
FUND 2007 ACTUAL ESTIMATE FORECAST
General Fund (for Criminal Justice Expenditures) $1,492,194 $1,680,000 $1,749,000
Law and Justice Capital 160,000 73,500 73,500
Public Safety Communications 145,000 152,250 158,300
TOTAL $1,797,194 $1,905,750 $1,980,800
Exhibit III contains a summary of how these funds have been spent since inception of the tax
revenue in June, 2005.
PROPERTY TAX
Property tax provides approximately 23.3% of all General Government revenue in the 2009 budget.
The 2009 projection includes a proposed 1% increase in the property tax levy, plus a conservative
1% growth factor for new construction. There were no major annexations that occurred in 2008.
The 2009 request complies with the levy limit restrictions contained in Initiative 747; limiting property
tax levy increases to the maximum of 1% or the rate of inflation, whichever is less. (Note: the initiative
defines the rate of inflation as measured by the Implicit Price Deflator for consumer goods). Under
the initiative, the City could increase the levy by more than 1% if approved by the majority of voters.
This initiative was found to be unconstitutional by the State Supreme Court; however, the State
Legislature met in special session immediately after the Court's decision and voted to make the
spirit of 747 State Law. The net effect is as though the initiative passed muster with the Courts.
As a point of clarification, the property tax levy is limited to a 1% increase in the dollars levied
(about $150,000 for 2009) - 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.
General Government: Revenue Trends • Section III — 7
The annual increase in General Government State mandated Retirement contributions of
approximately $200,000 alone is more than the 1% increase in property tax revenues. This 1%
restriction on growth will have an adverse effect on all of General Government services, the cost of
which will grow exponentially as time passes.
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.
The following graph depicts the 2009 budgeted allocation of the City's property tax revenues.
PROPERTY TAX ALLOCATION BY FUNCTION
2009 GENERAL LEVY
PROPERTY TAX TOTAL — $15,232,765
Fire & Police
Pension
$2,920,722
19.2%
General Fund
$6,198,043
40.7%
Parks
$1,800,000
11.8%
Street
$4,314,000
28.3%
2009 PROPOSED
GENERAL PROPERTY TAX LEVY
2008 2009 2008 ESr.
2007 AMENDED 2008 BUDGET VS.
ACTUAL BUDGET ESTIMATED FORECAST 2009 BUDGET
General $6,820,513 $7,327,800 $7,327,800 $7,586,000 3.5%
Parks & Recreation 1,938,000 1,800,000 1,800,000 1,800,000 0.0%
Street & Traffic 3,920,202 4,220,202 4,220,202 4,314,000 2.2%
SUB -TOTAL GENERAL GOVERNMENT 12,678,715 13,348,002 13,348,002 13,700,000 2.6%
Fire Pension 1,536,367 1,551,730 1,551,730 1,532,765 (1.2 %)
TOTAL $14,215,082 $14,899,732 $14,899,732 $15,232,765 2.2%
8 — Section III • General Government: Revenue Trends
The City has compiled data from the State Auditor's Office that identifies per capita property tax
for comparable cities throughout the State. The following chart compares the City's per capita
property tax income for 2006 (the last year information is available). It shows the City of Yakima's
property tax per capita is $164, which is $62 less than the average of all the comparable cities.
Yakima ranks fourth lowest in tax per capita of the 12 comparable cities.
2006 PER CAPITA PROPERTY TAXES
COMPARABLE CITIES BETWEEN 30,000 AND 90,000 IN POPULATION
(rounded to the closest dollar)
$450- $406
$400 -
Yakima's per capita property tax is $164, which is $62 less
than the average city per capita of $226
$350- $298 $304
$276
$300- $253
$241
$250- $212
$176 N
$200- $164
$128 $137
$150- $111
,„,
$100-
$50
$o
Pasco Walla Walla Kennewick Yakima Bellingham Olympia Richland Redmond Kirkland Auburn Kent Renton
* Data compiled from the State Auditor's Local Government Comparative Statistics.
FRANCHISE AND UTILITY TAXES
Franchise and utility taxes are collectively the third largest category of General Government
revenues. They comprise 19.8% of 2009 projected General Government revenues and 23.9% of
projected 2009 General Fund Revenues.
➢ 2009 projection is $11,662,716 — $397,516 or 3.5% above the 2008 year -end estimate of $11,265,000.
These revenues are largely a function of weather conditions and utility rates in the Valley. In
2008, electric utility taxes grew at 19% over 2007 actuals due primarily to the elimination of a tax
credit from BPA. Cellular phone taxes also exceeded growth estimates, coming in at 17% above
2007 actuals as this popular communications mode increased. Increases in both of these sources
have been conservatively budgeted in 2009. Franchise and utility taxes combined are the only
major revenue source keeping pace with the rate of inflation, primarily because of the growth in
customers resulting from recent annexations and rate increases implemented by utility providers.
(See constant dollar chart later in this section)
BUSINESS AND OCCUPATION TAX AND BUSINESS LICENSE FEES
The following chart represents Business License Fees, Business and Occupation (B & 0) tax, and
Utility taxes on private and public utilities. (Note: Yakima does not impose a general - purpose
business and occupation tax, which is generally charged on the gross volume of sales.) Yakima's
$144 per capita B & 0/Utility Tax ranks the lowest of the twelve cities in this comparison. This is
$33 below the $177 average per capita revenue.
General Government: Revenue Trends • Section III — 9
2006 PER CAPITA B & 0 / UTILITY TAXES*
COMPARABLE CITIES BETWEEN 30,000 AND 90,000 IN POPULATION
(rounded to the closest dollar)
$300-
$249
Yakima's per capita B &O / utility tax is $144, which is $33
$250- less than the average city per capita of $177
$191 $200
$180 $182 $184
$200- $168
$152 $153 $159 $160
$144
$150 -
$100 -
$50-
$0
Yakima Auburn Kennewick Pasco Walla Walla Bellingham Renton Kent Kirkland Richland Redmond Olympia
* Data compiled from the State Auditor's Local Government Comparative Statistics.
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 (about
half), are fees paid by other City funds for General Fund services (legal, administration, purchasing,
etc.); these charges for 2009 reflect an increase due to the normal fluctuation in volume of services
provided, and an increase in City Service Charge.
➢ 2009 projection is $5,843,705. This is a 5.3% or $292,589 increase from the 2008 estimate.
STATE - SHARED REVENUE
State - shared revenues are the fifth largest category of revenues received for General Government
Operations.
➢ 2009 projection for all revenues within this category is $2,907,600; a decrease of $32,300 from
the 2008 year -end estimate of $2,939,900. The year -end estimate reflects a full year receipt
for Criminal Justice High Crime. The pool of high crime cities is reset in July and since
the City cannot guarantee it will be in that pool of cities, thereafter, this revenue source is
budgeted conservatively.
• Liquor excise and liquor profits taxes are budgeted at $1,039,500 for 2009 — $40,500 above
the 2008 year -end estimate of $999,000.
• Gas Tax in Street Fund is budgeted at $1,350,000 or 3.8% above the 2008 year -end estimate
of $1,300,000 (but still less than 2007 actual levels.) This tax is calculated by the State using
population figures as published by the Office of Financial Management (OFM)
FINES AND FORFEITURES
These revenues come primarily from criminal fines and non - criminal penalties assessed in the City
of Yakima's Municipal Court, and parking violations. This revenue category is conservatively
budgeted at $1,632,900 for 2009.
10 — Section III • General Government: Revenue Trends
OTHER TAXES
This category includes Business Licenses, Gambling Taxes and County Road Tax from annexation.
The 2009 projection is $1,477,200, down 0.1% or $900 from 2008 year -end estimate because the 2009
projection does not include an estimate representing County Road Tax from Annexation as there
were no material annexations in 2008.
OTHER REVENUES
The balance of revenues supporting the general government funds consists of transfers from other
funds (other financing sources) and miscellaneous revenues. For 2009, $2,381,170 is expected to be
generated in this category.
The largest revenue sources in this category include:
➢ Interest income - 2009 projection is $935,000; equal to the 2008 year -end estimate of $935,000.
➢ Operating transfer from other funds - 2009 projection is $1,139,000 and consists primarily of
the transfer of 3.5% of City owned utility taxes to the Parks and Recreation fund.
OTHER INTERGOVERNMENTAL
This category includes revenue received from Government units other than the per capita
distributions from the State of Washington. The 2009 budget of $1,373,489 is up $206,165 or 17.7%
from the 2008 estimate. This increase is mainly due to new public safety grants.
LICENSES AND PERMITS
The 2009 budget is $814,000, 6.7% or $58,000 less than the 2008 year -end estimate of $872,000. This
decrease is due to challenges currently being faced in the building industry in general as a result of
contraction in the new home market and turmoil in the credit markets, making financing harder to
obtain for construction projects.
REVENUE TRENDS - OVERVIEW
➢ Based on 2009 budgeted revenues and expenditures, the General Government funds will
again be forced to rely on reserves to maintain a balanced budget.
This minimal increase in General Government revenues is reflective of an economy confronted with
high unemployment and low median income, with modest growth in elastic revenues and existing
tax limitations.
The following chart depicts trends over the past nine years (in 2000 Constant Dollars) in sales,
property and utility tax revenues; the City's three largest General Government revenue sources.
Sales tax exhibited consistent losses from 1999 through 2002. The City boundaries were expanded
by a major annexation in 2002, which resulted in some rebound of this revenue source. In 2005,
2006, 2007 and 2008 Sales tax is performing better due to the transitory effects of new construction
spurred by low interest rates. With the passage of Initiative 747, property tax levy growth has been
constrained to 1 %, which is generally below inflation, although the chart does show an increase in
2003 as a result of the annexation, which brings its constant dollar value back to 2000 levels. The
constant dollar trend for utility taxes is the only General Government revenue source keeping pace
with inflation. This means two of the three major General Government resources are not keeping
pace with inflation, even after realizing the growth in tax base from major annexation areas.
General Government: Revenue Trends • Section III —11
GENERAL GOVERNMENT
SALES, PROPERTY AND UTILITY TAX REVENUE TRENDS
(CONSTANT DOLLAR)
$12,000
$11,000 ■ i ® ® ®aisociamec i�®®®micim�®®®
�e• "4111111111111.11111111111111111.0"""" '46"1®®®®®a®®®®� ® ® ® ®� ®�ea��� ®a �� ® ®M ��mm� _,...
C $10,000 -
■ ■
$9,000
o ®®®®® a�® a�® �� ® ® ® ® ® ® ® ® ® ® ® ® ®® ®aye
o $8,000 � ®a��� ®a��� ®a�� ®y1 ® ® ®® ®a�� ® ®a�� ® ®a�� ® ®�A ®®
N $7,000 -
$6,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 Est.
®®®•®®®®®®® Sales Tax ■ Property Tax Levy ®®®®®®AA®®um Utility Taxes
GENERAL GOVERNMENT RESOURCE COMPARISON
GENERAL FUND
➢ 2009 projected beginning balance is $5,933,646 — down $317,062 from the 2008 beginning
balance of $6,250,708.
➢ 2009 projected revenue is $48,896,585 — $1,667,880 or 3.5% over the 2008 year -end estimate.
This increase is due mostly to sales and utility tax growth. Other smaller revenue sources
showed modest growth as well.
PARKS AND RECREATION FUND
➢ 2009 projected beginning balance is $432,950 — $116,489 or 21.2% under the 2008 beginning
balance of $549,439. This is largely a function of flat revenue streams and nominal increases
in expenditures.
➢ 2009 projected revenue is $4,244,385 — $11,217 or 0.3% over the 2008 year -end estimate. This is
mainly due to a flat property tax level in 2009 compared with 2008.
STREET FUND
➢ 2009 projected beginning balance is $1,147,588 — $238,481 or 17.2% under the 2008 year -end
estimate. Due mostly to reductions in gas tax revenues below budgeted amounts.
➢ 2009 projected revenue is $5,764,810 — $144,613 or 2.6% over the 2008 year -end estimate. Gas
tax revenues are expected to be flat but property tax revenue has been modestly increased.
Total General Government Revenues for 2008 are estimated to be about 3.9% more than 2007 actual revenues.
Total General Government Revenues for 2009 are projected to increase by only 3.2% over 2008 estimates.
These increases closely approximate the current rate of inflation.
12 — Section III • General Government: Revenue Trends
GENERAL GOVERNMENT
THREE YEAR RESOURCE COMPARISON
2008 2009
2007 YEAR -END 2008 BUDGET 2009
ACTUAL ESTIMATED VS. 2007 FORECAST VS. 2008
RESOURCES RESOURCES % CHANGE RESOURCES % CHANGE
General Fund Revenue $45,054,646 $47,228,705 4.8% $48,896,585 3.5%
General Fund Beg Balance 5,439,858 6,250,708 14.9% 5,933,646 (5.1 %)
Total General Fund Revenue 50,494,504 53,479,413 5.9% 54,830,231 2.5%
Parks & Recreation 4,229,066 4,233,168 0.1% 4,244,385 0.3%
Parks Beg Balance 431,032 549,439 27.5% 432,950 (21.2 %)
Total Parks 4,660,098 4,782,607 2.6% 4,677335 (2.2 %)
Street & Traffic Fund Revenue 5,673,698 5,620,197 (0.9 %) 5,764,810 2.6%
Street & Traffic Beg Balance 1,064,222 1,386,069 30.2% 1,147,588 (17.2 %)
Total Street & Traffic 6,737,920 7,006,266 4.0% 6,912,398 (1.3 %)
Total Revenue 54,957,410 57,082,070 3.9% 58,905,780 3.2%
Total Beginning Balance 6,935,112 8,186,216 18.0% 7,514,184 (8.2 %)
Total General Government $61,892,522 $65,268,286 5.5% $66,419,964 1.8%
The largest revenue source for the General Government Funds is sales tax. Yakima is in the lower half
of per capita sales tax compared with similar cities in the State. However, Yakima is also in the lower 1/3
of rankings in all other revenue comparisons per capita and is the second lowest out of the twelve cities
compared in combined per capita revenue. Yakima's $1,256 per capita taxes is $615 below the average of
$1,871 based on 2006 actual data, as demonstrated in the chart below. The most important conclusion from
this analysis is that the City of Yakima has a very limited revenue /tax base compared with most cities of its
size in the state, and yet provides similar or enhanced services and programs to its citizens.
2006 PER CAPITA TOTAL REVENUES*
COMPARABLE CITIES BETWEEN 30,000 AND 90,000 IN POPULATION
(rounded to the closest dollar)
$3,000- $2 852
Yakima's per capita total revenue is $1,256, which is $615
$2,500- less than the average city per capita of $1,871
$2,141 $2,219 $2,321 $2,335
$1,990
$2,000- $1,712 $1,787 Pr
$1,526 4 0 - 7 ''
$1,500- $1,256 $1,264
$1,053
$1,000 -
$500 -
$o
Kennewick Yakima Pasco Walla Walla Kent Bellingham Kirkland Auburn Olympia Renton Redmond Richland
* Data compiled from the State Auditor's Local Government Comparative Statistics. Includes state and federal grants, taxes and charges for services,
and excludes debt proceeds.
General Government: Revenue Trends • Section III — 13
GENERAL GOVERNMENT RESOURCES BY MAJOR CATEGORY
2008 2008 2009 2009 %
2006 2007 AMENDED YEAR -END FORECAST CHANGE FROM
ACTUAL ACTUAL BUDGET ESTIMATE BUDGET 2008 EST.
I 2 3 4 5 4 -5
GENERAL FUND
Property Tax $7363,765 $6,820,513 $7327800 $7327800 $7,586,000 3.5%
Sales Tax 12,698,230 13,423,269 13,675,000 13,938,000 14,384,000 3.2%
Criminal Justice Sales Tax 2,290,157 2,378,160 2,533,000 2,620,000 2,729,000 4.2%
Franchise Tax 343,320 42,079 43,000 46,200 47586 3.0%
Utility Tax 10,319,199 10,492,462 10,835,792 11,219,000 11,615,130 3.5
Other Taxes 1,455,843 1,505,176 1,461,200 1,468,600 1,477,200 0.6%
Licenses and Permits 741,492 982,084 871,500 872,000 814,000 (6.7 %)
Intergovernmental Revenue 2,115,772 2,500,346 2,595,805 2,628,024 2,750,889 4.7%
Charges for Services 4,182,839 4,422,803 4,471,293 4,578,013 4,893,680 6.9%
Fines and Forfeitures 1,309,431 1,420,275 1,378,700 1,550,250 1,632,900 5.3%
Miscellaneous Revenue 832,142 974,239 945,384 936,367 925,200 (1.2 %)
Other Financing Sources 100,688 53,239 1,000 4,451 1,000 (77.5 %)
Transfers From Other Funds 40,000 40,000 40,000 40,000 40,000 0.0%
TOTAL REVENUE 43,792,878 45,054,645 46,179,474 47,228,705 48,896,585 3.5%
Beginning Fund Balance 4,762,269 5,439,858 6,250,708 6,250,708 5,933,643 (5.1 %)
TOTAL GENERAL FUND $48,555,147 $50,494,503 $52,430,182 $53,479,413 $54,830,228 2.5%
PARKS & RECREATION FUND
Property Tax $1,901,985 $1,938,000 $1,800,000 $1,800,000 $1,800,000 0.0%
Intergovernmental Revenue 97,308 167291 174,700 179,200 180,200 0.6%
Charges for Services 686,391 860,125 913,465 951,643 934,265 (1.8 %)
Miscellaneous Revenues 193,535 185,775 198,270 203,325 200,920 (1.2 %)
Other Financing Sources 59,500 54,748 60,000 55,000 55,000 0.0%
Transfers From Other Funds 1,015,105 1,023,126 1,045,000 1,044,000 1,074,000 2.9%
TOTAL REVENUE 3,953,824 4,229,065 4,191,435 4,233,168 4,244,385 0.3%
Beginning Fund Balance 479,487 431,032 549,439 549,439 432,950 (21.2 %)
TOTAL PARKS & RECREATION FUND $4,433,311 $4,660,097 $4,740,874 $4,782,607 $4,677335 (2.2 %)
STREET AND TRAFFIC OPERATIONS FUND
Property Tax $3,314,344 $3,920,202 $4,220,202 $4,220,202 $4,314,000 2.2%
County Road Tax 508,416 161,316 0 9,500 0 (100.0 %)
Fuel Tax Street 1,299,298 1,374,901 1,430,000 1,300,000 1,350,000 3.8%
Other Intergovernmental 0 14,396 0 0 0
Charges for Services 34,449 77,227 15,760 21,460 15,760 (26.6 %)
Miscellaneous Revenue 22,298 57244 60,050 60,540 60,050 (0.8 %)
Other Financing Sources 26,854 68,412 0 8,495 0
Transfers From Other Funds 0 0 0 0 25,000
TOTAL REVENUE 5,205,659 5,673,698 5,726,012 5,620,197 5,764,810 2.6%
Beginning Fund Balance 1,133,674 1,064,222 1,386,069 1,386,069 1,147,587 (17.2 %)
TOTAL STREET AND TRAFFIC OPERATIONS FUND $6,339,333 $6,737920 $7112,081 $7006,266 $6,912,397 (1.3 %)
TOTAL GENERAL GOVERNMENT $59,327791 $61,892,520 $64,283,137 $65,268,286 $66,419,960 1.8%
TOTAL REVENUE $52,952,361 $54,957,408 $56,096,921 $57082,070 $58,905,780 3.2%
Total Beginning Fund Balance 6,375,430 6,935,112 8,186,216 8,186,216 7514,180 (8.2 %)
TOTAL RESOURCES $59,327791 $61,892,520 $64,283,137 $65,268,286 $66,419,960 1.8%
14 - Section III • General Government: Revenue Trends
GENERAL GOVERNMENT: EXPENDITURE TRENDS
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 1999 to 2009.
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 to remain within
available resources. See Exhibit III for more information.
PERCENTAGE INCREASE OF CRIMINAL JUSTICE COSTS
VS. OTHER GENERAL GOVERNMENT FUNCTIONS AND CPI
1999 BUDGET TO 2009 BUDGET
Criminal Justice $1,292,564 61.6%
All Other General Government $660,078 35.1%
Consumer Price Index 37.3%
Criminal Justice includes Police Operations; Pensions; Public Safety Communications; Jail Costs /Security; District and
Municipal Court; Prosecution and Indigent Defense; and 40% of Information Systems.
Cumulatively, over the past ten years Criminal Justice budgets have increased over 60 %. By
comparison, all other General Government expenses have increased by only 35.1 %. During this
same ten -year period the Seattle- Tacoma Consumer Price Index increased by 37.3 %. Criminal
justice cost increases are nearly 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 approximate the rate of inflation demonstrates a real reduction in service costs
per capita.
CRIMINAL JUSTICE FUNDING
With the loss of MVET in 2000 and caps on Property Tax Levies, 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 2007, 2008 estimate and 2009 budget). The .3% Criminal Justice
Sales Tax has helped in addressing some of the issues, but Cities only get 40% of the collected tax,
Yakima County gets the other 60 %. In response to this situation, in 2007 the City Council adopted 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 pro - active anti -
crime unit.
General Government: Revenue Trends • Section III — 15
In reviewing the following chart and graph, it should be noted that it includes only General Fund
expenditures on criminal justice. Another $1,143,014 is budgeted in the Law and Justice Capital Fund,
(not a General Government fund). Also good to review is the Criminal Justice Expenditures as a
Percentage of Total General Fund chart below, which demonstrates that over half of General Fund's
budget is dedicated to criminal justice.
SCHEDULE OF CRIMINAL JUSTICE EXPENDITURES
FOR THE YEARS ENDED DECEMBER 31, 2007 THRU 2009 FORECAST
% CHANGE
2007 2008 2009 2009 FROM
DESCRIPTION ACTUAL ESTIMATE FORECAST 2008
Police Operations & Administration $16,445,537 $17,602,783 $19,155,336 8.8%
Outside /Inside Jail Costs 3,043,760 3,253,173 3,452,345 6.1%
District Court /Municipal Court & Probation 1,131,555 1,240,093 1,413,628 14.0%
Prosecution Costs /Indigent Defense 1,042,118 1,144,634 1,232,802 7.7%
Other Related Expenses
Police Pension 1,384,894 1,350,521 1,387,957 2.8%
Emergency Dispatch Transfer 415,000 440,000 440,000 0.0%
Transfer -Law & Justice Center * 145,089 149,000 153,500 3.0%
Other Related Expenses Total 1,944,983 1,939,521 1,981,457 2.2%
GRAND TOTAL $23,607,953 $25,180,204 $27,235,568 8.2%
*Utility Tax transfer from General Fund
CRIMINAL JUSTICE EXPENDITURES AS A PERCENTAGE OF TOTAL GENERAL FUND
58.0%
54.0%
1 111111 A ,1 1� ■
50.0% ....
- di
46.0% A A -
42.0% I I I I I
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Actual Actual Actual Actual Actual Actual Actual Actual Actual Estimate Budget
1111111111111 111111111111 Criminal Justice a All Other
The following chart compares per capita criminal justice expenditures with comparable cities based
on 2006 data. Yakima has the second highest per capita percentage of revenue spent on Criminal
Justice among the 12 comparable cities; Yakima has been first for the last five out of eight years.
16 — Section III • General Government: Expenditure Trends
PERCENT OF PER CAPITA TOTAL REVENUE SPENT ON CRIMINAL JUSTICE IN 2006*
COMPARABLE CITIES BETWEEN 30,000 AND 90,000 IN POPULATION
(rounded to the closest dollar)
25.0%-
20.5%
The percentage of Yakima's total revenue spent on criminal 19.9%
justice is 19.9 %, which is 6.6% more than the average 17.6% t
20.0 % - 16.7%
percentage of 13.3%
153% 16.7% /
14.1% 14.3% 14.7%
13.5%
15.0%- /-
10.1%
10.0 % - 6.8%
5
Richland Redmond Bellingham Kirkland Walla Olympia Renton Kent Pasco Auburn Yakima Kennewick
Walla
* Data compiled from the State Auditor's Local Government Comparative Statistics.
The following chart depicts City -wide staffing levels per 1,000 population.
GENERAL GOVERNMENT BUDGETED POSITIONS COMPARISONS*
FOR THE LAST TEN YEARS
8.00 / 7.1 7.0
7.00 5 9 5.7 J.8 5.9
6.00 4-7P
5.00
4.00
3.00
2.00
1.00 _/ 7
0.00
1997 1999 2001 2003 2005 2007
1997 1999 2001 2003 2005 2007
Number of General Govt. Employees 449.0 457.2 429.0 448.9 471.1 496.3
Employees Per Capita 7.1 7.0 5.9 5.7 5.8 5.9
Square Miles 19.3 19.3 24.1 24.2 25.3 25.9
Population 63,510 65,262 73,040 79,220 81,470 83,646
* Does not include temporary employees (number of employees are stated in Full -Time Equivalents).
There are 5 major events that have had significant effect on City Staffing levels:
1. City population has increased 20,136 from 1997 to 2007, or 32 %.
2. In 2000 33.21 positions were deleted as a cost containment measure associated with the
City's loss of MVET Revenue.
General Government: Expenditure Trends • Section III - 17
3. 2002 through 2004 36.35 FTE's were added in Police, Fire and Streets to support services to a
large newly annexed area.
4. 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.
5. 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.
It should be noted that only a net of 47 new FTE positions have been added since 1997, only 10.5%
over the past 10 years. Most of these additions were either in response to criminal justice issues,
annexations, or both. This is reflective of the next chart on per capita expenditures on payroll,
where Yakima is fourth from the bottom of the comparable cities.
SALARY AND BENEFIT COSTS
The following graph is based on information gathered by the State Auditor's Office. It identifies the
per capita salary costs. This analysis indicates that the City of Yakima spends, on the average, $102
less per capita on salaries than other comparable cities. Yakima employs fewer people per capita
than 8 other cities. To maintain levels of service during periods of peak workload demands, the
City uses contract and temporary labor when possible.
2006 PER CAPITA EXPENDITURES ON PAYROLL
COMPARABLE CITIES BETWEEN 30,000 AND 90,000 IN POPULATION
(rounded to the closest dollar)
$900- $804
$792
$800 - Yakima's per capita expenditures on payroll is $484, which is $788
$102 less than the average city per capita of $586
$700- $616 $623
$564 $590 $594
$600
401-7 /
$484 $484
$500-
$402
$400- $336
$300 -
$200 -
$100-
$0 1 r5
Pasco Kennewick Walla Walla Yakima Richland Kent Auburn Bellingham Kirkland Renton Olympia Redmond
* Data compiled from the State Auditor's Local Government Comparative Statistics.
Finally, total City expenditures per capita are the second lowest of the 12 cities compared, $552
below the average. Yakima does offer full services (i.e. Police, Fire, Water, Wastewater, Irrigation,
Refuse, and Transit) to its citizens. Even though we provide services that many other cities do
not provide, we are still next to last in cost per citizen, proving Yakima does "more with less" in
delivering important services to our constituency.
18 — Section III • General Government: Expenditure Trends
2006 PER CAPITA TOTAL CITY EXPENDITURES*
COMPARABLE CITIES BETWEEN 30,000 AND 90,000 IN POPULATION
(rounded to the closest dollar)
$3,000- $2 892
Yakima's per capita total expenditures are $1,256, which is
$2,500 - $552 less than the average city per capita revenue of $1,891 $2,249
$1,950 $1,986
$2,088 $2,160
$1,915
$2,000- 11$1,703
$1,500- $1,259
$1,339 $1452
$1,000 -
$500 -
Kennewick Yakima Pasco Walla Walla Kirkland Bellingham Kent Auburn Olympia Redmond Renton Richland
* Data compiled from the State Auditor's Local Government Comparative Statistics.
GENERAL GOVERNMENT: IMPACTS OF FIXED, MANDATED, CONTRACTUAL COSTS
Total General Government Fixed, Mandated or Contractual net cost increases equal $2,641,915, an
increase of 5.5 %. However, as stated previously, the total General Government operating budget
for 2009 is 3.1% more than 2008 budget. This means that the 2009 budget had to restrain non-
mandated spending in order to balance the budget within existing resources.
Notable 2009 mandated and contractual cost adjustments compared with the 2008 amended budget
are as follows:
➢ 2009 projected labor cost increase of $2,129,996; which includes labor settlements and merit increases.
➢ Fringe benefits such as social security, special pay and industrial insurance for General
Government employee groups accounted for an increase of $299,726. The increase is a
function largely of the full year of positions added in 2008, tracks with the salary increase
mentioned above and an industrial insurance surcharge based on history.
➢ Overtime is reduced by $34,318 or (2.1 %), primarily due to reductions in Fire.
➢ The total State Retirement cost increased from $1,900,916 in 2008 to $2,102,368 in 2009, an
increase of $201,452 or 10.6 %, due to employer contributions to State Retirement Systems for
both PERS and LEOFF systems being increased in July 2008.
➢ Medical and Dental costs increased from $4,037,303 to $4,215,020 or 4.4% for 2009, based on
the City's group history and expected medical cost trends within the City's self - insured health
program.
➢ Fuel costs are budgeted to increase $76,866 for 2009 due to the volatility in the market. It
should be noted that there was an additional appropriation of $142,850 in 2008. There have
been no significant increases in the size or composition of the city's fleet during this time.
➢ Maintenance expenses are budgeted to increase $70,307 in 2009 due to an aging fleet as a
result of postponement of vehicle replacement.
➢ Vehicle Rental and Replacement was reduced by $29,000 in the 2009 budget as a cost
containment measure. The practical outcome of this reduction will be the underfunding
General Government: Expenditure Trends • Section III — 19
of replacement reserves when vehicles are scheduled for replacement, resulting in keeping
vehicles in service longer.
➢ Jail services provided by outside agencies are budgeted at $1,700,500 for 2009. Year -end
estimates for 2008 are $1,817,000 vs. a budget of $1,910,000. The primary reason for this positive
variance is the utilization of lower valley jails at a lower cost than the Yakima County Jail.
➢ Election costs fluctuate based on the number of City issues on the ballot. In 2008 we paid
for the election of four Council positions (from 2007 ballot) at an estimated cost of $190,000.
In 2009 we will be paying for the voter registration for the 2008 General Elections at an
estimated cost of $125,000. This results in a $65,000 decrease in 2009 from 2008 costs.
➢ Overall, Fixed, Mandated or Contractual Costs have increased approximately $2.6 million or
5.5% from 2008 to 2009.
GENERAL GOVERNMENT
FIXED, MANDATED, AND CONTRACTUAL COSTS
2008 VS. 2009 COMPARISON
2008 2009 PROJECTED
AMENDED ADOPTED INCREASE PERCENT
BUDGET BUDGET (DECREASE) CHANGE
Employee Compensation* $30,111,257 $32,241,253 $2,129,996 7.1%
Overtime 1,652,018 1,617,700 (34,318) (2.1 %)
Special Pay 339,049 396,610 57,561 17.0%
Year - end /Retirement /Termination Cash -Outs 338,079 332,074 (6,005) (1.8 %)
Social Security 1,260,046 1,357,159 97,113 7.7%
State Retirement 1,900,916 2,102,368 201,452 10.6%
Industrial Insurance 709,447 854,499 145,052 20.4%
Life Insurance 72,758 70,228 (2,530) (3.5 %)
Medical & Dental Insurance 4,037,303 4,215,020 177,717 4.4%
Unemployment Compensation 56,897 79,424 22,527 39.6%
Police Pension 1,412,950 1,387,957 (24,993) (1.8 %)
Utility Costs:
Telephone 122,365 122,360 (5) 0.0%
Electricity 673,911 696,055 22,144 3.3%
Natural Gas 172,671 160,536 (12,135) (7.0 %)
Fuel 751,297 828,163 76,866 10.2%
Vehicle /Equipment Maintenance 530,305 600,612 70,307 13.3%
Vehicle Rentals /Replacement 299,396 270,396 (29,000) (9.7 %)
Liability Insurance Coverage 655,129 687,885 32,756 5.0%
State Examiner 103,000 103,000 0 0.0%
Yakima County Emergency Management 57,212 58,900 1,688 3.0%
Clean Air Authority 22,062 22,394 332 1.5%
Alcoholism 19,000 20,790 1,790 9.4%
Jail Costs - Yakima County 1,805,000 1,595,500 (209,500) (11.6 %)
Jail Costs - Sunnyside 15,000 15,000 0 0.0%
Jail Costs - Toppenish 25,000 25,000 0 0.0%
Jail Costs - Wapato 65,000 65,000 0 0.0%
SunDome Debt Service 150,000 150,000 0 0.0%
District Court Costs 13,700 1,800 (11,900) (86.9 %)
Public Defense 385,000 385,000 0 0.0%
Election Costs 190,000 125,000 (65,000) (34.2 %)
TOTAL FIXED, MANDATED COSTS $47945,768 $50,587683 $2,641,915 5.5%
OF TOTAL GENERAL GOVERNMENT AMENDED BUDGET 81.1% 83.0%
* Steps, annualized position costs, negotiated wages, etc.. Does not include benefits listed elsewhere in this exhibit.
20 - Section III • General Government: Expenditure Trends
COMPONENTS OF GENERAL GOVERNMENT BUDGET
2008 2009 PROJECTED
AMENDED BUDGET INCREASE PERCENT
BUDGET FORECAST (DECREASE) CHANGE
General Government Budget $59,106,970 $60,944,851 $1,837,881 3.1%
Less: Fixed Mandated or Contractual Cost (47945,768) (50,587,683) (2,641,915) 5.5%
BALANCE $11,161,202 $10,357,168 ($804,034) (7.2 %)
The following chart graphically depicts that increases in fixed, mandated and contractual costs in the
General Government Funds must be compensated for by reductions in other discretionary costs to
maintain a balanced budget.
ANNUAL BUDGETED PERCENTAGE COST INCREASES
FIXED, MANDATED & CONTRACTUAL COSTS VS. ALL OTHER COSTS 0)
20.0 Fixed Mandated increase - $2,641,915
Other Budget increase /(decrease) - (804,034)
15.0 Net Change - $1,837,881
a) 10.0 — 6.9
a) 4.6
5.5
5.0 3•8 2.7 2.4 2.3
' ITT I n
P.
2003 2004 2005 2 2007 2008 2009
(5.0) 1.2
(3.3)
(10.0) (6.6) (7.2 )
(7.2) (7.3)
(15.0) (10.5)
Fixed, Mandated & Contractual Cost % Increases
f All Other Cost % Increases /Decreases
(1) Fixed, mandated, and contractual costs include salaries and benefits; medical insurance costs; public safety pension expenses; utility costs;
liability insurance; jail /security contract expenses; election expenses; debt service and other expenses.
GENERAL GOVERNMENT EXPENDITURE SUMMARY
The following chart illustrate that the total 2009 General Government budget is $60,944,851,
$1,837,881 or 3.1% more than the 2008 amended budget of $59,106,970.
2008 - 2009 GENERAL GOVERNMENT BUDGET
2008 2008 EST. 2009 - -- CHANGE 2009 VS. 2008 - --
AMENDED YEAR -END BUDGET -- PRELIMINARY VS. AMENDED --
BUDGET EXPENDITURES FORECAST DOLLARS PERCENT
General $48,472,230 $47,545,767 $50,521,573 $2,049,343 4.2%
Parks & Recreation 4,420,907 4,349,657 4,377598 (43,309) 1.0%
Street & Traffic Operations 6,213,833 5,858,678 6,045,680 (168,153) (2.7 %)
TOTAL GENERAL GOVERNMENT $59,106,970 $57754,102 $60,944,851 $1,837881 3.1%
General Government: Expenditure Trends • Section III — 21
22 — Section III • General Government: Expenditure Trends
OTHER OPERATING AND ENTERPRISE FUNDS
2008 year -end estimates for the City's Other Operating and Enterprise Funds are summarized
below:
2008 BUDGET STATUS
2008 2008 ESr. 2008 2008
AMENDED ACTUAL ESTIMATED EST. ENDING
FUND BUDGET EXPENDITURES VARIANCE RESOURCES BALANCE
Economic Development $181,556 $178,056 $3,500 $349,675 $171,619
Community Development (ONDS) 4,679,359 4,291,336 388,023 5,073,881 782,545
Community Relations 547,054 531,371 15,683 1,327,072 795,701
Community Services 590,107 399,589 190,518 425,151 25,562
Growth Management 49,745 49,745 0 49,838 93
Cemetery 257599 256,186 1,413 325,115 68,929
Emergency Services 1,104,501 1,099,125 5,376 1,269,620 170,495
Public Safety Communications 2,691,381 2,682,640 8,741 2,953,665 271,025
Business Improvement (DYBID) 118,343 115,421 2,922 115,425 4
Trolley (Yakima Interurban Lines) 468,619 257,841 210,778 260,132 2,291
Front Street Business Improvement 3,000 3,000 0 9,715 6,715
Tourist Promotion 1,410,662 1,410,662 0 1,579,308 168,646
Capitol Theatre 304,737 304,737 0 453,532 148,795
Public Facilities District Revenue 1,114,424 1,068,424 46,000 1,204,706 136,282
Tourist Promotion Area 393,000 393,289 -289 393,703 414
Storm Water Operating 1,120,506 870,948 249,558 1,121,000 250,052
Transit 7,324,976 7323,528 1,448 7,918,002 594,474
Refuse 4,500,990 4,487,797 13,193 4,641,932 154,135
Sewer 16,649,719 16,622,666 27053 18,172,310 1,549,644
Water 7,304,687 6,997,875 306,812 8,598,743 1,600,868
Irrigation 2,668,515 2,666,204 2,311 2,848,151 181,947
Equipment Rental 5,750,023 5,622,062 127,961 9,867,345 4,245,283
Environmental 454,750 273,800 180,950 711,877 438,077
Public Works Administration. 1,205,464 1,152,553 52,911 1,325,609 173,056
TOTAL $60,893,717 $59,058,855 $1,834,862 $70,995,507 $11,936,652
All Operating and Enterprise Funds are anticipated to end 2008 with positive fund balances. This
analysis includes appropriations approved by Council through September, and a balanced (i.e.
revenues equal to expenditures) appropriation request for: General Fund to budget new grant related
expenditures; Parks and Recreation primarily for higher user fee volume; the Tourism Promotion Area
(TPA); and Downtown Yakima Business Improvement District (DYBID) funds going before Council
at their October 7 and 21, 2008 meetings. After considering this proposed budget amendment,
all operating funds are anticipating actual expenditures within authorized levels, with the minor
exception of the TPA fund - the estimate will be modified for the final budget.
2009 projections for Other Operating and Enterprise Funds expenditures and resources are reflected
below. (Resources include the beginning fund balance plus current year revenue, to arrive at a total
available to spend.)
Other Operating and Enterprise Funds • Section IV- 1
PROPOSED 2009 BUDGET
2009 2009 2009
PROJECTED PROJECTED PROJECTED
FUND RESOURCES EXPENSE BALANCE
Economic Development $261,619 $146,027 $115,592
Neighborhood Development (Housing) 2,962,786 2,174,807 787,979
Community Relations 1,400,121 566,603 833,518
Community Services 548,274 487,712 60,562
Growth Management /Commute Trip Reduction Fund 93 0 93
Cemetery 316,679 261,638 55,041
Emergency Services 1,229,971 1,152,430 77,541
Public Safety Communications 3,183,191 3,027,543 155,648
Parking & Business Improvement (PBIA) 210,174 204,592 5,582
Trolley 225,053 221,621 3,432
Front Street Business Improvement Area 10,250 3,000 7,250
Tourist Promotion 1,588,946 1,454,205 134,741
Capitol Theatre 463,362 318,513 144,849
Public Facilities District Revenue 1,353,282 1,194,000 159,282
Tourist Promotion Area 405,502 405,088 414
Storm Water Operating 2,045,052 1,801,938 243,114
Transit 7,840,074 7,482,899 357,175
Refuse 4,769,785 4,675,689 94,096
Wastewater 18,252,358 16,883,176 1,369,182
Water 8,499,705 7,312,616 1,187,089
Irrigation 2,847,197 2,786,735 60,462
Equipment Rental 10,214,638 6,180,563 4,034,075
Environmental 573,077 326,350 246,727
Public Works Administration 1,393,186 1,198,818 194,368
TOTAL OTHER OPERATING AND ENTERPRISE FUNDS $70,594,375 $60,266,563 $10,327812
See Exhibit I for additional detail of Other Operating and Enterprise Funds.
The following chart depicts resources and expenditures for Major Operating and Utility Fund
Operations for 2009. (See Exhibit II for policy issues impacting Operating /Enterprise Budgets.)
2 - Section IV • Other Operating and Enterprise Funds
2009 RESTRICTED OPERATING AND RESERVE FUNDS
2009
Forecast Dollars in Millions
Division Budget 0 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20 21 22 23
Reserves, Risk Mgmt, Emp Benefits $16,145,271
Cap Theatre, Cemetery, Trust Rsys 23,692,882 , Reserves, Charges
Wastewater 16,883,176
18,252,358 Sewer Rates, 0 seratin: Reserves
Water /Irrigation 10,099,351
11,346,902 Water Rates, Irrigation Fees, Reserves
Transit 7,482,899
7,840,074 Transit sales Tax, Oper Grants, Fare Box
Refuse 4,675,689
4,769,785 Refuse Rates
Equipment Rental 4,340,563
4,409,035 - Charges • Expenditures
CI Resources
Stormwater 1,801,938
2,045,052 = Stormwater Fees
Special Purpose, Housing, Emer Svs 12,729,171
Public Wks Admin, Cable TV, Misc 15,711,790 Charges, Grants, Taxes, Reserves
Total Expenditures $74,158,058
Total Resources $88,067,878
OPERATING FUNDS
For more information on policy issues that affect these funds see the Policy Issue Summary in
Exhibit II.
THE ECONOMIC DEVELOPMENT FUND
This fund reflects resources of $261,619 and expenditures of $146,027 for 2009. These funds are
planned to be used to spur economic development. Expenditures include an allocation of the
Deputy Director of Community and Economic Development position; continuation of professional
service agreements with the National Development Council; and continuation of the railroad grade
separation and renewal community Federal legislative funding efforts.
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 Homeownership (HOME) grants.
Expenditures are budgeted at $2,174,807 and are subject to the public hearing process. With
pressures on the Federal Budget, the 2009 budget anticipates a slight decrease in these program
grants. 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
Other Operating and Enterprise Funds • Section IV 3
to reflect the final outcome of prior year programs. The 2009 budget includes a policy issue to
reorganize the division to produce a net savings in administrative costs. The 2009 ending balance is
projected to be $787,979.
THE COMMUNITY RELATIONS FUND
The Community Relations fund expects resources of $1,400,121 for 2009. Expenditures are
estimated to be $566,603, leaving the balance estimated at $833,518 for year -end, earmarked
primarily for capital expenditure on production equipment /cable TV facilities.
THE COMMUNITY SERVICES FUND
Programs in this fund include the 3rd year of the Healthy Families Yakima program, which is
a 5 -year demonstration project through the Department of Social and Health Services. Total
resources, which include grant revenue and match contributions, are estimated to be $548,274, and
expenditures are budgeted to be $487,712, leaving an ending balance of $60,562.
THE GROWTH MANAGEMENT FUND
This fund has special projects /grants related to growth management issues that have been accounted
for in this fund. There is no activity planned for this fund. The projected ending balance is $93.
CEMETERY FUND
Resources within this fund for 2009 are projected at $316,679, expenditures are estimated to
be $261,638, and the estimated ending balance is projected at $55,041. The Cemetery Fund is
depending on a $50,000 operational subsidy from the Parks and Recreation Fund (down from
$90,000 in 2009).
THE EMERGENCY SERVICES FUND
Resources in this fund reflect revenues of $1,229,971 and expenditures of $1,152,430 related to the
provision of Emergency Medical Services, and are supported by an allocation of the countywide
Special EMS Property Tax Levy, which was renewed by the voters in September 2002. The 2009
ending balance is projected to be $77,541.
THE PUBLIC SAFETY COMMUNICATIONS FUND
This fund expects resources of $3,183,191 and expenditures of $3,027,543 for 2009, leaving a balance
of $155,648 at year -end. This fund accounts for 9 -1 -1 Calltakers, supported by Yakima County 9 -1 -1
resources in the amount of $1,305,566. General Fund expenditures include a transfer of $880,000 for
dispatch. There is a budgeted Policy Issue that made two of the four Lead Dispatchers eligible to be
funded from the County 9 -1 -1 resources which freed up dispatch funds to add 2 additional dispatch
positions.
DOWNTOWN YAKIMA BUSINESS IMPROVEMENT DISTRICT (DYBID) FUND
Resources in this fund are projected to be $210,174, coming primarily from the new Business
Improvement District established mid -2008, while expenditures are projected at $204,592. The
ending balance for 2009 is projected at $5,582. Much of the 2009 budget is targeted toward
maintaining the recent downtown revitalization efforts.
THE TROLLEY FUND
This fund projects resources of $225,053 and expenditures of $221,621 for 2009, and includes the
continuation of a grant - supported improvement project at the Trolley barn. The year -end balance is
projected at $3,432.
4 — Section IV • Other Operating and Enterprise Funds
THE FRONT STREET BUSINESS IMPROVEMENT AREA FUND
This fund projects resources of $10,250 and expenditures of $3,000 - leaving an ending balance of
$7,250 for 2009.
THE TOURISM PROMOTION /YAKIMA CONVENTION CENTER FUND
This funds budget anticipates resources of $1,588,946 (this includes a transfer of $135,000 from the
Public Facility District) and expenditures of $1,454,205, and thus is expected to end 2009 with a
balance of $134,741. This budget includes policy issues to increase the annual Management Fee
paid to the Visitor and Convention Bureau to operate the Center, and an allocation of Hotel / Motel
tax to commission a market analysis and visitor profile study.
THE CAPITOL THEATRE FUND
This fund is expected to have resources of $463,362 and expenditures of $318,513 which includes
a budgeted policy issue to increase the annual Management Fee paid to the Capitol Theatre
Corporation. The ending balance is $144,849.
THE PUBLIC FACILITIES DISTRICT FUND
The Public Facilities District fund includes resources estimated to be $1,353,282 for 2009. Expenditures are
estimated to be $1,194,000. Of this amount, $665,000 is for debt service on the Convention Center bonds
issued in 2002 and supplemental support for Convention Center operations, while $498,000 is designated
for the Capitol Theatre expansion project. This leaves a fund balance of $159,282 at the end of 2009.
THE TOURIST PROMOTION AREA
Accounts for a self - assessment imposed by the lodging industry to promote tourism. Resources are
estimated to be $405,502, with expenditures programmed at $405,088, leaving a balance at the end
of 2009 of $414.
STORMWATER OPERATING FUND
Expenditures in this fund are estimated to be $2,801,938 and resources are projected to be $2,045,052
for 2009. An ending balance of $243,114 is currently projected for 2009. This is the second year
of the new Stormwater Utility - the budget was developed assuming a rate of $35 per Equivalent
Residential Unit (ERU) annually. The expenditure budget includes the planned increase in
personnel to perform program tasks and begins the reimbursement of the Wastewater Utility for its
advanced funding of the Stormwater program.
TRANSIT FUND
Expenditures in this fund are estimated to be $7,482,899 and resources are projected to be $7,840,074
for 2009. Total Transit sales taxes for 2008 are forecast to be $4,926,000, and are estimated to be
slightly more in 2009 - the 2009 budget includes a total of $5,098,000 with $4,698,000 allocated to
operations and $400,000 to capital. This fund also includes an operating grant of $1,650,000. An
ending balance of $357,175 is currently projected for 2009.
THE REFUSE FUND
The expenditure budget in this fund for 2009 is $4,675,689, and continues the transition to
automated routes. Total resources are estimated to be $4,769,785, and an ending balance is currently
projected at $94,096. The 2009 budget contemplates the addition of 2,500 customers in the 72nd
avenue annexation area. As a result of the growing customer base there are 2 policy issues to
convert 2 Solid Waste Maintenance workers to a Code Compliance Officer and a Crew Leader
position to manage the delivery and pickup of carts.
Other Operating and Enterprise Funds • Section IV 5
WASTEWATER FUND
Resources for this fund in 2009 are expected to total $18,252,358. Expenditures are budgeted at
$16,883,176 and the 2009 year -end balance is currently projected to be $1,369,182. Transfers of about
$2,281,850 million to Wastewater Construction Funds, $3,202,766 million to provide for Wastewater
Bond redemption and repayments of Public Works Trust Fund Loans, and $500,000 for a Utility
System are currently programmed in this budget. The proposed 2009 Sewer budget includes
continued implementation of the Sewer Comprehensive Plan and the Wastewater Facilities Plan.
The 2009 projected resources includes a the continuation of a prior year policy issue to implement a
rate adjustment of 3.5%
WATER FUND
Resources of $8,499,705 are projected for 2009 in this fund. Expenditures are estimated to be
$7,312,616 leaving $1,187,089 at the end of 2009. These costs include $400,000 transfer to the Capital
Fund, and about $586,750 to provide for Water Bond Debt Service, repayments of Water Public
Works Trust Fund Loans and $100,000 for a Utility System. The 2009 projected resources include
the rate adjustment of 5.5% that was approved by Council in 2008.
IRRIGATION FUND
Resources for 2009 are projected to be $2,847,197 in this fund, and expenditures are estimated to
be $2,786,735, which includes a transfer of $881,000 to the Irrigation Capital Fund, about $354,500
to provide debt service for an Irrigation bond and Public Works Trust Fund loan and $60,000 for a
Utility System. The 2009 ending fund balance is projected to be $60,462.
THE EQUIPMENT RENTAL FUND
The budget for this fund in 2009 is $6,180,563 of which $4,206,175 is the maintenance and operations
budget, and $1,974,388 is the Equipment Replacement budget. Resources are expected to be
$10,214,638 while the ending fund balance for 2009 is expected to be $4,034,075, 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 2009, $573,077 in
resources is expected to be generated and $326,350 is expected to be spent. A year -end balance of
$246,727 is projected.
PUBLIC WORKS ADMINISTRATION FUND
Expenditures for 2009 are expected to be $1,198,818 for this fund. Resources for 2009 are expected
to be $1,393,186 generated from operating funds located in the Public Works complex, resulting in a
year -end balance of $194,368
RESERVE FUNDS — EMPLOYEE BENEFIT RESERVES
THE UNEMPLOYMENT COMPENSATION RESERVE FUND
Estimated to end 2009 with a balance of $348,575. Resources are projected to be $500,708 and
expenditures for claims and other related expenses are estimated at $152,133. Due to an increase of
unemployment claims, rates are adjusted from .0019 to .00247.
6 — Section IV • Other Operating and Enterprise Funds
EMPLOYEES HEALTH BENEFIT RESERVE FUND
Expenditures in this fund for 2009 are projected to be $9,395,435, while resources are $12,882,557,
leaving an ending balance projected to be $3,487,122. The 2009 budget includes a rate adjustment
of about 5.5 %. 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 WORKERS COMPENSATION RESERVE FUND
This fund is estimating a year -end balance of $749,429, the result of resources totaling $2,443,567
and expenditures of $1,694,138. Ongoing efforts in claim management and safety training are in
place to slowdown of claims /costs. However, the 2009 budget includes a 10% rate adjustment due
to an increase in disability claims.
WELLNESS /EMPLOYEE ASSISTANCE PROGRAM (EAP) FUND
Projected total resources for 2009 are $250,789 in this fund, and expenditures are $119,476 with a
projected year -end balance of $131,313.
THE FIREMEN'S RELIEF AND PENSION FUND
This fund is projecting resources of $2,388,977 and expenditures of $1,603,380, leaving an estimated
2009 year -end balance of $785,597.
The Fire Pension property tax allocation for 2009 of $1,532,765, is 1.22% less than the 2008 allocation
of $1,551,730. 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 2009, Risk Management Fund departmental contributions totaling $2,162,000 are programmed
from City departments, an increase of 5.0% 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, combine for projected 2009 revenues of $2,602,000.
Total resources to the Risk Management Reserve for 2009 are expected to be $3,686,140. Based on
personnel costs, claims experience and other insurance/ professional services costs, expenditures
are estimated to be $2,783,782, and the year -end 2009 reserve balance is estimated to be $902,358.
These reserve levels are still considered marginal in comparison to the existing liability for incurred
claims; however, the combination of reductions in deductible levels and proactive legal overview of
land use actions are expected to limit future liability. The reserve balance in this fund will continue
to be monitored for adequacy.
GENERAL CONTINGENCY RESERVE FUND
The Contingency Reserve Fund is estimated to end 2008 with a balance of $334,070. For 2009,
$50,000 is programmed to be transferred from the General Fund to this fund, providing total
resources of $384,070 and $300,000 is appropriated for contingency purposes during 2009.
Other Operating and Enterprise Funds • Section IV— 7
CAPITOL THEATRE RESERVE
The Capitol Theatre Reserve projects resources for 2009 of $561,893. Interest earnings on this
balance partially support an annual transfer to the Capitol Theatre Operating Fund Reserve of
$71,927. The projected 2009 ending balance is $489,966.
GENERAL FUND CASH FLOW RESERVE
General Fund cash flow reserves for 2009 are estimated at $4,308,658. This source is a contingency
for unbudgeted policy issues, results of negotiations for unsettled bargaining units, other unknown
expenses and potential revenue shortfalls.
In summation, the City's 2009 General Reserve position is estimated to be as shown in the following
chart.
2009 GENERAL RESERVE POSITION
2007 2008 2009
FUND ACTUAL ESTIMATED PROJECTED
Contingency Fund $359,070 $334,070 $84,070
General Fund Cash Flow 6,250,708 5,933,646 4,308,658
Capitol Theatre Reserve 575,070 23,143 489,966
Risk Management Reserve 1,037,963 1,084,140 902,358
TOTAL $8,222,811 $7,374,999 $5,785,052
Exhibit I contains additional detail of funds categorized as Operating Reserves.
8 — Section IV • Other Operating and Enterprise Funds
CAPITAL IMPROVEMENT FUNDS
For 2008, a number of capital improvements were programmed for an amended capital budget of $49.1
million. However, capital improvement expenditures for 2008 were estimated to be $27.7 million, a
spending level approximately $21.4 million below budgeted levels. These projects are rebudgeted in
2009 along with additional capital improvements. Examples of the projects being rebudgeted include
the Railroad Grade Separation; 16th Avenue & Washington Avenue reconstruction; William 0. Douglas
trail enhancements; Nob Hill bridge repair; Congdon wastewater main; new well project; and Irrigation
system refurbishment. (See Exhibit I for a summary of the status of the capital funds.)
The following describes the relationship of resources and expenditures for major capital budgets of
the City.
2009 RESTRICTED CAPITAL AND DEBT SERVICE FUNDS
2009
Forecast Dollars in Millions
Division Budget 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Streets $30,360,163
32,265,028 R eserves, Charges, Loans, Revenue Bonds
Wastewater 7,815,174
12,515,013 Reserves, Charges, Loans
Water /Irrigation 5,967,043
10,012,699 I eserves, Charges, Loans
Transit 920,750
1,666,699 Reserves, Taxes
•Total Expenditures
CI Total Resources
Equipment Rental 1,840,000
5,805,603 Reserves, Charges
Stormwater 325,000
400,813 Reserves, Charges
Special Purpose Capital 17,373,032
Misc G.O. Debt 19,430,463 1 Grants, Taxes, Loans
Total Expenditures $64,601,162
Total Resources $82,096,318
For 2009, Capital Fund expenditures of $56,562,187 are estimated as follows, inclusive of carry -over
projects from 2008:
STREET /OTHER INFRASTRUCTURE IMPROVEMENT PROJECTS — Total projects of $28,846,473 (including carryover projects
and Debt Service; excluding capital transfers of REET 1 ($428,065) to support Fire and Parks capital
improvement):
Capital Improvement Funds • Section V —1
➢ William O. Douglas trail projects / 6th Avenue & Naches bridge (carry -over) - $492,047
(Federal grants)
➢ William O. Douglas bridge restoration (carry -over) - $379,690 (Federal grants)
➢ Summitview and 66th Avenue signalization (carry -over plus 2009 additional project cost) -
$665,000
➢ Coolidge Ave / 80th Avenue to 88th Avenue (carry -over plus 2009 additional funding) -
$687,300 (Federal grant and local match)
➢ Nob Hill overpass repair (carry -over plus additional funding) - $2,000,0000 (Federal grant
and REET 2)
➢ Sixteenth Avenue and Washington Avenue reconstruction (carry -over) - $1,358,000 (State
grant, REET 2 and Private Donations)
➢ William O. Douglas trail enhancement (carry -over) - $696,883 (State grants)
➢ Grind and overlay on 16th Avenue (Nob Hill to Washington Avenue) See Policy Issue
Summary, Exhibit II - $550,000 (REET 2)
➢ Railroad grade separation - $18,800,000 (State and Federal grants)
➢ Debt Service - $1,121,903
➢ Other miscellaneous projects including a $100,000 contingency and $660,000 utility services
system (funded by wastewater, water, and irrigation operating funds) - $2,095,650
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 - 2009 projects of $2,986,700:
➢ General irrigation system refurbishment Phase III (carry -over) - $2,000,000
➢ Hillcrest Buena Vista refurbishment (carry -over plus 2009 additional project cost) - $620,000
➢ Capitol Hill refurbishment - $150,000
➢ Other irrigation system improvements - $216,700
DOMESTIC WATER IMPROVEMENT FUND - 2009 projects of $2,380,100:
➢ New well project (carry -over plus 2009 additional project cost) - $1,300,000 (funded by
Public Works Trust Fund loan)
➢ Design Water Treatment Plant Lagoons - $150,000
➢ 2009 Water main replacement - $150,000
➢ Automated Meter Reading System - $500,000
➢ Viola and 1 -82 water main - $150,000
➢ Other water capital projects - $130,100
2 - Section V • Capital Improvement Funds
FIRE CAPITAL FUND - Total projects of $1,618,100:
➢ Purchase of New Ladder Truck (carry -over) — $800,000
➢ Machinery and Equipment (2 vehicles, Snowplow, HVAC, Air compressor, Mobile Data
Terminal, Public Safety Communication Equipment) — $177,600
➢ Fire Station 94 remodel. See Policy Issue Summary, Exhibit II — $600,000 ( funded by REET 1)
➢ Fire Station 95 Storage Shed — $27,000
➢ Other miscellaneous upgrades to equipment and fire stations — $13,500
WASTEWATER CAPITAL EXPENDITURES - Facility projects and other sewer improvements, including sewer line
extension rehabilitation and other costs, total $5,555,000:
➢ West Nob Hill sewer main (carry over plus 2009 additional project cost) — $400,000
➢ Simpson Lane LID City Participation — $220,000
➢ Congdon sewer main (carry over) — $750,000
➢ Neighborhood sewer main (carry over) — $380,000
➢ Speedway /Race St Interceptor — $200,000
➢ Control and Data System Retrofit (carry over plus 2009 additional project cost) — $2,500,000
(Revenue Bond)
➢ DAFT (Dissolve Air Flotation Treatment) retrofit (carry over) — $250,000 (Revenue bond)
➢ Wastewater Facility security upgrade. See Policy Issue Summary, Exhibit II — $200,000
➢ 2009 Wastewater Comprehensive Plan update — $150,000
➢ Other Wastewater miscellaneous capital needs (including a $250,000 contingency) — $505,000
STORMWATER CAPITAL FUND - 2009 budget of $325,000:
➢ Capital Facilities Project (carry -over) — $150,000
➢ Coolidge Rd drainage improvement — $150,000
➢ Other miscellaneous projects — $25,000
TRANSIT CAPITAL - The 2009 budget of $920,750 is for miscellaneous capital needs and vehicle replacement.
➢ Continuation of repaving project at Public Works — $167,000
➢ Bus Replacement plan (1 bus) — $500,000 (See Policy Issue Summary — Exhibit II)
➢ Replace Dial -a -ride vehicles — $98,750
➢ Other capital needs — $155,000
Capital Improvement Funds • Section V — 3
PARKS IMPROVEMENTS PROJECTS - $ 1,275,000 for various project /capital needs:
➢ Upper Kiwanis development /land - $1,175,000 (state grant, line of credit, and contributions)
(See Policy Issue Summary - Exhibit II)
➢ Other capital needs - $100,000
OTHER CAPITAL PROJECTS I TRANSFERS
➢ City Hall rehabilitation /refurbishment /contingency - $400,000 for continued refurbishment
projects. (REET 1)
➢ Transfer of REET 1 to support Fire and Parks capital improvements - $428,065
➢ Law and Justice Capital fund - $1,143,014 for the Police Station /Legal Center related
equipment and projects including:
• Vehicle replacement - $340,000
• Technology and Equipment to enhance crime reduction - $374,014 (Federal grant)
• Safety and communication equipment for mobile units - $170,000
• Other miscellaneous projects and equipment - $259,000
CONVENTION CENTER CAPITAL IMPROVEMENTS - $268,000 is programmed for ongoing capital needs of the Center
for 2009.
LID CONSTRUCTION - $430,000 is budgeted for two local improvement districts 1) at North 85th Avenue
and 2) Simpson Lane.
CBD CAPITAL IMPROVEMENT - This fund includes $257,235 for improvements in the Central Business District.
➢ Contract for maintenance (funded by Parks and Recreation in prior years) - $50,000
➢ Other projects / contingency - $207,235
CAPITOL THEATRE CONSTRUCTION - $9,728,750 is budgeted for improvements to the Capitol Theatre:
➢ Phase II of the Capitol Theatre expansion project - $9,210,000 (bond proceeds and contributions)
➢ Interfund loan repayment - $518,750
SUMMARY
Overall, Capital Fund expenditures in the 2009 Budget Forecast are $56,562,187, which is $7,439,367
or 15.1% greater than the 2008 amended levels of $49,122,820. Many areas are in the midst of
capital programs such as the utilities, streets and the Capitol theatre expansion. In some instances,
the "next" phase as included in the 2009 budget is more than 2008, such as the Railroad Grade
Separation, Capitol Theatre expansion, wastewater and water system improvements. In other
instances, the ongoing budgets are less than 2008, such as the Phase 3 Downtown Revitalization/
pedestrian improvements and Wastewater capital projects. All of these changes net to an overall
increase in the capital fund expenditures for this budget cycle.
4 - Section V • Capital Improvement Funds
BUDGET SUMMARY
DEBT CAPACITY
GENERAL OBLIGATION DEBT
The City is allowed by State statute to issue general obligation debt either by Council approval
( Councilmanic) or by a vote of the people. The amount of debt outstanding is restricted by State
law to certain percentages of the property tax assessments (called the limitation of indebtedness).
In most instances, Councilmanic debt issues have dedicated sources of revenue for repayment,
while voted debt is serviced by an additional property tax levy.
As of December 31, 2007 the City had $34,265,097 of Councilmanic debt issued, of which
$19,057,482 was outstanding. Of the amount outstanding, all have a dedicated revenue source
(such as cable TV utility tax, hotel /motel tax, Public Facilities District (PFD) revenues, Real Estate
Excise Tax (REET), etc.)
The amount of voted debt issued as of the above date, was $2,300,000 (refunded), of which $1,780,000
was outstanding. This represents one bond issue that was used for Fire capital improvements.
➢ The tax levy on voted debt for 2008 is $0.05834643 per $1,000 of assessed valuation, for a
total levy of $294,000.
➢ The levy on voted debt for 2009 is projected at $268,000 to cover scheduled debt service.
For 2007, the ratio of net general bonded debt to assessed value is .38 %, and the net bonded debt
per capita is $242. These numbers indicate a General Obligation debt burden for Yakima that is well
within industry standards. This is appealing to potential investors. The remaining debt capacities
(from the limitation of indebtedness calculation) are:
➢ $58.0 million for Councilmanic general obligation debt.
➢ $49.5 million for voted general obligation debt (in addition to above).
➢ $127.6 million for utilities.
➢ $127.6 million for parks and open space.
The chart below summarizes the general purpose debt available to the City.
GENERAL PURPOSE DEBT AVAILABLE
LIMIT BY CUMULATIVE LIMIT
SECTION
I. General Purpose
Without a Vote (Includes Capital Leases) 1.50%
With a vote 1.00% 2.50% 2.50%
II. Utilities Purpose 2.50% 5.00%
III. Open Space and Parks Facilities 2.50% 7.50%
TOTAL LEGAL LIMIT 7.50%
Budget Summary • Section VI —1
The basic percentages for Section I, above, are the maximum levels of General Obligation
indebtedness those sections may incur. However, utility or parks indebtedness may each exceed
2.5% and reduce the general indebtedness margin. The percentages are applied to the taxable
assessed value (regular levies) of $5.1 billion.
REVENUE BONDS
Revenue bonds are issued for construction projects or other legal purposes in the water, sewer and
irrigation utilities. Repayment of these debt issues is built into the rate structures charged by the
utilities.
At December 31, 2007, the amount of revenue bonds issued was $34,590,000 of which $24,661,317
was outstanding, $19,751,317 for the Wastewater /Water Utility and $4,910,000 for the Irrigation
Utility. The revenue bond coverage ratio (net revenues available for debt service /debt service
requirements) is 3.62 for the Wastewater /Water Utility, and 3.88 for the Irrigation Utility in 2007.
The City's general policy is to maintain a minimum coverage ratio of between 1.4 and 2.0 times debt
service. Both utilities exceed that standard and have healthy coverage ratios. This provides a high
level of assurance that the City will be financially able to repay its outstanding revenue bonds.
PUBLIC WORKS TRUST FUND LOANS
The City also utilizes Public Works Trust Fund Loans to fund capital projects for street, wastewater,
and water divisions. These loans are obtained by competitive process from the State of
Washington's Department of Community and Economic Development. Interest rates range from
.5% to 3% depending on amount of available matching funds, and are more favorable than bonded
debt. The other advantage to using this program is that these loans are not considered to use debt
capacity for G.O. debt nor do they have coverage or reserve requirements in the case of utility debt.
At December 31, 2007, the City had $25,757,747 of Public Works Trust Funds issued, with $9,799,870
outstanding.
STATE AND FEDERAL MANDATES
In establishing the budget levels for all of the funds of the City, the cost of complying with State and
Federal mandates is factored in. The cost of mandate compliance continues to be a heavy burden
on City budgets, particularly City operating budgets. The cost of compliance is very high while the
revenues received from State and Federal agencies which enact these mandates is minimal. The
most significant impacts from State and Federal mandates is the expense of implementing:
• Health Insurance Portability and Accountability Act (HIPAA)
• GASB 34 Financial Statement /Reporting Model
• Safe Drinking Water Act
• Endangered Species Act (4(d) Rules for Salmon Recovery)
• National Fire Protection Association apparatus manning standard
• Americans' with Disabilities Act
• Fair Labor Standards Act
• State Ecology Stormwater Regulations
• State and Federal Retirement Laws
• Growth Management Act (ongoing)
• State mandate which shifted cost to cities for domestic violence, prosecution, adjudication,
and incarceration of State charge misdemeanant and gross misdemeanant offenses.
2 — Section VI • Budget Summary
All of the above have had far reaching impacts on most City budgets. Again, few State or Federal
funds have been granted to support implementation of these mandates. Additionally, the
Legislature continues to consider measures to preserve and recover northwest salmon stock. Most
of the measures discussed carried multi - million dollar price tags. This is a potential future mandate
that could have dramatic impacts on local governments throughout Washington State.
It should also be noted that while mandates and regulatory requirements continue to be a heavy
burden on the City, the City's ability to collect revenues to meet those requirements has been
legislatively diminished. New State laws often impair the City's ability to collect revenue for City
programs and services. Recent initiatives have reduced the City's ability to meet requirements. It's
important for the citizenry to weigh the cost of compliance (i.e. taxes and fees to meet the laws)
versus the cost of non - compliance (for example: quality of life issues, fines for non - compliance, and
other "hidden" costs such as increased fire and property insurance rates, loss of grant revenue, etc.)
BALANCED BUDGET
The 2009 budget is planned to be balanced as follows:
GENERAL FUND
$1,624,988 of the total 2009 beginning balance of $5,933,646 is allocated to meet the current
difference between estimated revenues and expenditures. The estimated $4,308,658 General Fund
ending balance will be used as a minimum operating reserve for cash flow needs for unbudgeted
policy issues, final bargained settlements and as a general contingency reserve against potential
revenue shortfalls, or unforeseen expenditures.
PARKS AND RECREATION FUND
Projected 2009 Parks expenditures are $4,377,598. The budget includes $4,244,385 in revenues,
along with $133,213 of the beginning 2009 cash balance to balance the 2009 budget. This will leave
a projected operating reserve of $299,737 for year -end 2009. Even though the Parks Division has
recently completed a major capital campaign, adding new parks and facilities, its operating budget
is remaining flat relative to inflation. To adequately support the new facilities, a new dedicated
revenue source is desirable. The option of establishing a Metropolitan Park District was researched;
however, total available revenues within the City limits would not be adequate to maintain the
entire Parks system. Other discussion includes reviewing the balance of user fee vs. tax support of
programs, and divesting programs that can be performed by the private sector (either for profit or
non-profit.)
STREET AND TRAFFIC OPERATIONS FUND
Beginning balance projection for 2009 is $1,147,588. Revenues of $5,764,810 along with $280,870
of the beginning balance will be used to balance the 2009 budget. Total expenditures of $6,045,680
are programmed for 2009. The year -end balance is projected at $866,718. Additional personnel
were added by Council in 2008 to accommodate growth in the miles of city streets added by recent
annexations.
WASTEWATER OPERATIONS FUND
Expenditures for 2009 are budgeted within projected resource levels. Because of the large volume
of capital projects in recent years, operating transfers to the Wastewater capital funds were
expanded in 2007 and remain at high levels through 2009. This is resulting in the operating reserve
balance being reduced from $2,011,777 at the beginning of 2008, to $1,549,644 at the end of 2008,
and then to $1,369,182 by the end of 2009. This balance is about 8.1% of the expenditure budget
Budget Summary • Section VI — 3
and is, therefore, still within guidelines. The Stormwater utility is following Council's approved
plan to ramp up the program. The 2009 budget includes 2 additional positions and begins the
reimbursement of Wastewater for prior Stormwater expenses.
WATER RATES
Water recently developed a cost of service study tied to operating costs and identified capital needs.
Council approved a rate adjustment to be phased in over 5 years, starting in 2008. The adjustment
included in the 2009 budget is 5.5 %.
REFUSE RATES
As Refuse transitions to automated pick -up, this fund is achieving the goal of gradually reducing
staffing costs, as the automated trucks only require one operator. For 2009, no rate adjustment is
being proposed for Refuse.
CONCLUSION
The City's projected Operating, Enterprise, and Capital Fund expenditures for 2009 are balanced
within anticipated revenues and projected cash balances.
The total 2009 Budget is estimated at $199,704,071 — an increase of $7,530,326 or 3.9% greater than
the 2008 amended budget level of $192,173,745. Most of this increase is derived from the timing of
capital projects, salary adjustments and increased cost in operating supplies /maintenance.
The overall 2009 Budget addresses, within resource limitations, the Critical /Strategic Issues of the
City in an ongoing effort to meet citizen needs for municipal services; address the City's Mission
and Vision for the future; and satisfy Federal and State mandated responsibilities. (See Exhibit III
for a graphic summary of total City budget resources and expenditures.)
4 — Section VI • Budget Summary
THREE YEAR BUDGET COMPARISON - 2008 BUDGET BY CITY FUNCTIONAL GROUPING
2007 2008 2008 2009 2009 2009 2009 2009
ACTUAL AMENDED YEAR -END PRELIMINARY VS 2008 BEGINNING PROJECTED EST. ENDING
EXPENDITURES BUDGET ESTIMATE BUDGET AMENDED FUND BALANCE REVENUE FUND BALANCE
GENERAL GOVERNMENT
City Council $182,758 $204,961 $204,803 $214,540 4.7%
City Manager 450,429 488,608 488,174 518,756 6.2%
State Examiner 95,467 103,000 100,000 103,000 0.0%
Records 365,783 490,224 420,551 438,888 (10.5 %)
Financial Services 1,219,856 1,453,768 1,439,025 1,516,266 4.3%
Human Resources 410,129 465,627 455,619 488,048 4.8%
Legal 1,308,276 1,354,666 1,364,741 1,455,786 7.5%
Municipal Court 1,072,678 1,289,964 1,211,943 1,386,829 7.5%
Purchasing 234,303 271,231 263,617 257,362 (5.1 %)
Hearing Examiner 60,155 71,000 51,000 51,000 (28.2 %)
Environmental Planning 691,506 737,706 731,261 898,184 21.8%
Code Administration 1,530,132 1,645,403 1,620,995 1,782,792 8.3%
Indigent Defense 360,797 385,000 375,000 385,000 0.0%
H Police 19,489,297 21,325,811 20,855,954 22,607,681 6.0%
c Fire 7941,374 8,443,241 8,431,972 8,916,125 5.6%
co
,_'< Police Pension 1,384,894 1,412,950 1,350,521 1,387,957 (1.8 %)
p Probation Center 48,233 25,000 25,000 25,000 0.0%
Cizi Engineering 1,029,928 1,154,964 1,097,201 1,204,407 4.3%
do-, City Hall Maintenance 395,937 418,299 405,187 421,583 0.8%
- c
i.:. Information Systems 2,476,068 2,844,751 2,841,910 2,482,128 (12.7 %)
Utility Services 958,592 1,091,136 1,054,353 1,248,127 14.4%
I Intergovernmental 284,423 288,685 286,660 348,039 20.6%
p ' Sun Dome 150,000 150,000 150,000 150,000 0.0%
m
o District Court 10,645 13,700 3,150 1,800 (86.9 %)
• Transfers 2,082,216 2,342,535 2,317,130 2,232,275 (4.7 %)
K TOTAL GENERAL FUND $44,233,876 $48,472,230 $47,545,767 $50,521,573 4.2% $5,933,646 $48,896,585 $4,308,658
x
d Parks & Recreation 4,110,659 4,420,907 4,349,657 4,377,598 (1.0 %) 432,950 4,244,385 299,737
'Z
T-I: Street & Traffic Operations 5,351,851 6,213,833 5,858,678 6,045,680 (2.7 %) 1,147,588 5,764,810 866,718
ti TOTAL GENERAL GOVERNMENT FUNDS $53,696,386 $59,106,970 $57,754,102 $60,944,851 3.1% $7514,184 $58,905,780 $5,475,113
N
Iv 2007 2008 2008 2009 2009 2009 2009 2009
I
tTJ ACTUAL AMENDED YEAR -END PRELIMINARY VS 2008 BEGINNING PROJECTED EST. ENDING
� T' EXPENDITURES BUDGET ESTIMATE BUDGET AMENDED FUND BALANCE REVENUE FUND BALANCE
Q' OTHER O
ea. PERATING /ENTERPRISE
e`•
1 ".-1 Economic Development $268,300 $181,556 $178,056 $146,027 (19.6 %) $171,619 $90,000 $115,592
•
Community Development 2,136,382 4,679,359 4,291,336 2,174,807 (53.5 %) 782,545 2,180,241 787,979
cc:. o Community Relations 529,918 547,054 531,371 566,603 3.6% 795,701 604,420 833,518
c 0 Community Services 105,993 590,107 399,589 487,712 (17.4 %) 25,562 522,712 60,562
2 rowt Mgmt/Commute Trip Red Fund 38,106 49,745 49,745 0 100.0%
.- Growth M g P ( ) 93 0 93
ti Cemetery 315,560 257,599 256,186 261,638 1.6% 68,929 247,750 55,041
EL Emergency Services 1,019,761 1,104,501 1,099,125 1,152,430 4.3% 170,495 1,059,476 77541
cc:. Public Safety Communications 2,449,375 2,691,381 2,682,640 3,027543 12.5% 271,025 2,912,166 155,648
o Parking & Business Improvement Area 82,826 118,343 115,421 204,592 72.9% 4 210,170 5,582
Trolley (Yakima Interurban Lines) 24,873 468,619 257841 221,621 (52.7 %) 2,291 222,762 3,432
p Front Street Business Improvement Area 1,200 3,000 3,000 3,000 0.0% 6,715 3,535 7,250
o Tourist Promotion 1,258,433 1,410,662 1,410,662 1,454,205 3.1% 168,646 1,420,300 134,741
Capitol Theatre 281,611 304,737 304,737 318,513 4.5% 148,795 314,567 144,849
Public Facilities District Revenue 644,628 1,114,424 1,068,424 1,194,000 7.1% 136,282 1,217,000 159,282
Tourist Promotion Area 381,834 393,000 393,289 405,088 3.1% 414 405,088 414
Storm Water Operating 0 1,120,506 870,948 1,801,938 60.8% 250,052 1,795,000 243,114
Transit 6, 386 ,583 7324,976 7323,528 7482,899 2.2% 594,474 7245,600 357,175
Refuse 3,809,216 4,500,990 4,487,797 4,675,689 3.9% 154,135 4,615,650 94,096
Sewer Operating 15,908,713 16,649,719 16,622,666 16,883,176 1.4% 1,549,644 16,702,714 1,369,182
Water Operating 6,594,239 7304,687 6,997,875 7,312,616 0.1% 1,600,868 6,898,837 1,187,089
Irrigation Operating 2,625,516 2,668,515 2,666,204 2,786,735 4.4% 181,947 2,665,250 60,462
Equipment Rental 4,553,864 5,750,023 5,622,062 6,180,563 7.5% 4,245,283 5,969,355 4,034,075
Environmental Fund 50,098 454,750 273,800 326,350 (28.2 %) 438,077 135,000 246,727
Public Works Administration 1,131,552 1,205,464 1,152,553 1,198,818 (0.6 %) 173,056 1,220,130 194,368
TOTAL OTHER OPERATING /ENTERPRISE $50,598,581 $60,893,717 $59,058,855 $60,266,563 (1.0 %) $11,936,652 $58,657,723 $10,327,812
CAPITAL I MPROVEMENT
Arterial Street $4,099,997 $9,420,282 $4,518,816 $7,317,146 (22.3 %) $1,044,171 $6,643,041 $370,066
Transportation Improvement 37548 0 0 0 0 0 0
C.B.D. Capital Improvement 2,586,061 2,622,227 2,342,424 257235 (90.2 %) 379,889 35,800 158,454
Capitol Theatre Construction 231,664 1,281,103 1,224,353 9,728,750 659.4% 175,983 9,873,000 320,233
Parks & Recreation Capital 656,361 1,555,838 620,900 1,275,000 (18.1 %) 195,423 1,240,000 160,423
Fire Capital 1,554,054 1,265,272 498,000 1,618,100 27.9% 1,300,292 340,153 22,345
Law & Justice Capital 953,479 863,300 620,881 1,143,014 32.4% 553,690 943,514 354,190
Public Works Trust Construction 772,861 1,902,702 1,660,236 1,235,570 (35.1 %) 1,307,572 925,000 997002
REET 2 Capital Construction 797381 2,016,215 958,749 1,661,822 (17.6 %) 1,154,403 820,000 312,581
L.I.D. Construction Control 31,635 535,000 535,000 430,000 (19.6 %) (572,413) 1,002,413 0
Storm Water Capital 0 175,000 149,187 325,000 85.7% 50,813 350,000 75,813
Transit Capital Reserve 61,836 2,407,652 2,272,652 920,750 (61.8 %) 1,119,199 547500 745,949
Convention Center Capital Improvement 64,997 107682 107682 268,000 148.9% 301,178 216,200 249,378
Cum. Reserve for Capital Improvement 3,981,060 9,419,474 1,927,000 19,460,000 106.6% 173,350 19,465,100 178,450
Wastewater Facilities Capital Reserve 19,620 720,000 720,000 50,000 (93.1 %) 317,747 152,000 419,747
Sewer Construction 2,793,253 2,115,000 831,000 2,220,000 5.0% 2,003,216 1,391,350 1,174,566
Domestic Water Improvement 473,612 2,065,200 628,259 2,380,100 15.2% 2,733,561 1,708,000 2,061,461
Wastewater Facilities 6,044,548 7,187,473 6,445,000 3,285,000 (54.3 %) 3,177,482 1,161,000 1,053,482
Irrigation System Improvement 2,384,436 3,463,400 1,662,334 2,986,700 (13.8 %) 3,754,937 906,000 1,674,237
TOTAL CAPITAL IMPROVEMENT $27544,403 $49,122,820 $27722,473 $56,562,187 15.1% $19,170,493 $47720,071 $10,328,377
H CONTINGENCY /OPERATING RESERVES
Contingency Fund $65,337 $300,000 $100,000 $300,000 0.0% $334,070 $50,000 $84,070
FRS /Capitol Theatre Reserve 71,927 571,927 571,927 71,927 (87.4 %) 23,143 538,750 489,966
p Risk Management 2,278,437 2,474,668 2,434,880 2,783,782 12.5% 1,084,140 2,602,000 902,358
T OTAL C ONTINGENCY /OPERATING RESERVES $2,415,701 $3,346,595 $3,106,807 $3,155,709 (5.7 %) $1,441,353 $3,190,750 $1,476,394
ti
Co EMPLOYEE BENEFIT RESERVES
on Unemployment Compensation $109,920 $154,739 $151,139 $152,133 (1.7 %) $392,158 $108,550 $348,575
Employees Health Benefit 8,691,744 9,310,906 8,897,738 9,395,435 0.9% 3,567,557 9,315,000 3,487122
p Workers' Compensation 1,242,336 1,719,838 1,690,592 1,694,138 (1.5 %) 882,267 1,561,300 749,429
o Wellness /EAP Fund 121,651 126,382 125,950 119,476 (5.5 %) 130,789 120,000 131,313
Firemen's Relief & Pension 1,497,086 1,630,203 1,492,995 1,603,380 (1.6 %) 780,412 1,608,565 785,597
•
Li TOTAL EMPLOYEE BENEFIT RESERVES $11,662,737 $12,942,068 $12,358,414 $12,964,562 0.2% $5,753,183 $12,713,415 $5,502,036
Z "
ea.
Q' TRUST AND AGENCY FUNDS
ea.
e`h
Cemetery Trust $26,828 $27,000 $25,000 $25,000 (7.4 %) $563,181 $31,000 $569,181
I
W
I
2007 2008 2008 2009 2009 2009 2009 2009
tTJ ACTUAL AMENDED YEAR -END PRELIMINARY VS 2008 BEGINNING PROJECTED EST. ENDING
� T' EXPENDITURES BUDGET ESTIMATE BUDGET AMENDED FUND BALANCE REVENUE FUND BALANCE
Q DEBT SERVICE
e-h
1 ".-1 L.I.D. Guaranty $0 $0 $0 $0 n/a $79,982 $300 $80,282
•
PFD Debt Service 459,729 459,075 459,075 460,413 0.3% 151,407 460,000 150,994
H
coo General Obligation Bonds 2,194,852 2,128,040 2,126,889 2,257,369 6.1% 525,401 2,259,389 527,421
c 0 L.I.D. Debt Service 253,673 187,000 187,000 207,000 10.7% 74,477 213,000 80,477
2 Water -Irri Water-Irrigation/Sewer Bonds 2,977,059 3,960,460 3,713,534 2,860,417 (27.8%) 2,357,977 2,864,442 2,362,002
ti .- g ( )
TOTAL DEBT SERVICE $5,885,313 $6,734,575 $6,486,498 $5,785,199 (14.1 %) $3,189,244 $5,797,131 $3,201,176
CO T OTAL C ITY B UDGET $151,829,949 $192,173,745 $166,512,149 $199,704,071 3.9% $49,568,290 $187,015,870 $36,880,089
n
O
p
c
O
POLICY ISSUE SUMMARY
2009 BUDGET PREPARATION
POLICY ISSUE SUMMARY (1)
OUTSIDE AGENCIES -- DETERMINED BY COUNCIL POLICY
COUNCIL POLICY ISSUE PROPOSED FUNDING
REQUEST /JUSTIFICATION SOURCE NON- PERSONNEL COMMENTS
Submitted by Council members Cawley and Varies Net savings:
Lover: Cap and /or Eliminate all Outside up to $100,000
Agency Funding
OUTSIDE AGENCY REQUESTS
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING
REQUEST /JUSTIFICATION SOURCE NON- PERSONNEL COMMENTS
Yakima County Development General Fund $20,000 Budgeted
Association (New Vision) Additional $10,000 Unbudgeted
Total Request $30,000
Yakima Chamber of Commerce (2) General Fund $5,900 Budgeted
Hispanic Chamber of Commerce (2) General Fund $5,900 Budgeted
Fourth of July Committee (2) General Fund /Fire $5,500 Budgeted
Sunfair Association (2) General Fund $1,000 Budgeted
Yakima Basin Storage Alliance, Black Rock (2) Water Reserves (60 %) $18,000 Budgeted
General Fund (40 %) 12,000
$30,000
Yakima - Morelia Sister City Association (2) Economic Development $2,000 Budgeted
Fund Additional 3,000 Unbudgeted
Total Request $5,000
Committee for Downtown Yakima CBD Capital $50,000 Budgeted
Improvement Fund (321)
Allied Arts ArtsVan General Fund $5,333 Budgeted
Retired Senior Volunteer Program (RSVP) Parks & Recreation Fund $3,000 Budgeted
In -kind $2,000
Seasons Music Festival (New) Parks & Recreation Fund $8,000 Unbudgeted
or Hotel /Motel Tax
Citizens for Safe Yakima Valley Communities: General Fund $20,000 Budgeted
Existing Community Programs
Blockwatch & Crime Free Rental Housing General Fund $60,000 Budgeted
Support (New) Federal Byrne Grant
Yakima Symphony Orchestra (New) Parks & Recreation Fund $10,000 Unbudgeted
or General Fund
$208,633 Total Budgeted
$31,000 Total Unbudgeted
(1) Policy proposal figures may be rounded.
(2) These Outside Agency Requests are included in the 2009 Preliminary Budget at the same levels as approved in the 2008 budget.
Policy Issue Summary • Exhibit II —
INTERGOVERNMENTAL AGENCIES
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING
REQUEST /JUSTIFICATION SOURCE NON- PERSONNEL COMMENTS
Clean Air Authority Assessment General Fund 2008 Assessment $22,062 Budgeted
Increase -1.5% 332
2009 Total $22,394
Yakima County Emergency Management General Fund 2008 Assessment $57,212 Budgeted
Assessment Increase -3% 1,688
2009 Total $58,900
Yakima Valley Conference of Governments General Fund 2008 Assessment $42,581 Budgeted
(COG) Membership Assessment Decrease- (3.4 %) (1,456)
2009 Total $41,125
CITY MANAGEMENT
WASTEWATER / PRE - TREATMENT
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Enhance Security at the Wastewater Facility $200,000 Budgeted
Wastewater Treatment Plant Capital Fund
STORMWATER
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Reaffirm and Update Council Stormwater Fees Add 2 Budgeted
Authorized Stormwater Program Positions
(continuation of 2008 Policy Issue $94,000
for mandated activities)
Reallocate 0.6
• Personnel Staffing Levels for DOE Grant positions from
2009: Wastewater
As Revised 9.56 FTE $30,000
Per 2008 PI 8.96 FTE
Adjustment .60 FTE Full year
implementation
• Begin reimbursement Stormwater Fees of 4 positions
of Wastewater Utility budgeted for
for advanced funding of partial year in
Stormwater program 2008
2 — Exhibit II • Policy Issue Summary
WATER / IRRIGATION
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Water and Irrigation Division Water & Irrigation 1. Add 1 Water Budgeted
Reorganization - Operating Rates position
(OIT)
1. Add 1 "Operator in Training" Water Fund $58,700
(OIT) Position
2. Upgrade
2. Create Water Treatment Operator
Operator II and III positions Positions
$6,000
Transfer Treatment Plant
Chief Operators into new 3. Upgrade
positions as eligible Office
Position
3. Upgrade Department Irrigation Fund $3
Assistant III to Water/
Irrigation Administration Net $67,700
Specialist
LEGAL
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Increase Part-Time Legal Risk Management Add .50 Budgeted
Assistant Position To Full -Time Fund Position $30,000
Legal Assistant Position
MUNICIPAL COURT
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
None
Policy Issue Summary • Exhibit II — 3
FINANCE
FINANCIAL SERVICES / UTILITY SERVICES
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Continuation of 2008 Finance General Fund 2009: Implementation Budgeted
Department Reorganization Finance ($5,900) Costs (2009 only):
Policy Issue - Consolidate Utility Revenue
Service Representative and Increase in Utility Utility Finance $1,300
Cashier positions Transfer for Services 13,000 Utility
Services: Net Expense Services 9
Total Net Expenditure Increase Increase $7100 Total $11,000
(including one -time costs) 2009 $22,700
2009: $18,100 2010 $26,000 Annually (ongoing):
Total Net Expenditure Increase Finance ($11,800)
2010: $14,200 Utility
Services 26,000
Net $14,200
INFORMATION SYSTEMS
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Implement a Records 2009 Implementation: 2009
Budgeted
Management System for official Implementation: g
City records maintained by the 50% General Fund -
City Clerk's office Info Systems GF /IS $42,500
50% Risk Mgmt Risk
Mgmt 42,500
Net $85,000
Annual Maintenance Support 2010 2010 $16,000
100% General Fund -
Info Systems
COMMUNITY AND ECONOMIC DEVELOPMENT
CODES
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Increase 2009 Service Contract General Fund 2008: $62,878
with Humane Society by 9.1%
or $5,722 2009 Increase:
4.0% 2,516 Budgeted
5.1% 3 Unbudgeted
9.1% $68,600
4 — Exhibit II • Policy Issue Summary
ONDS (OFFICE OF NEIGHBORHOOD DEVELOPMENT)
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
ONDS Reorganization Federal Block Grant Budgeted
(net savings)
1. Eliminate ONDS Manager 1. Manager
position ($107,000)
2. Reallocate CED Deputy 2. Director
Director 20,000
3. Special Assignment for 3. Ops. Sup.
Operations Supervisor 8,000
4. Upgrade Account Specialist to 4. Upgrade
Financial Services Technician 5,000
Net ($74,000)
TOURISM PROMOTION /YAKIMA CONVENTION CENTER
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Increase annual Management Tourist Promotion $19,350 Budgeted
Fee from $645,000 to $664,350 Operating Fund
to adequately support Center Hotel / Motel Tax
operations Event revenue
Equipment Replacement and Convention Center $217,000 Budgeted
System Upgrades Capital
Market Analysis and Visitor Tourist Promotion $30,000 Budgeted
Profile Operating Fund
Hotel / Motel Tax
CAPITOL THEATRE
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Increase Annual Management Capitol Theatre $12,000 Budgeted
Fee from $197,000 to $209,000 Operating Fund
Hotel / Motel Tax
Policy Issue Summary • Exhibit II — 5
ENGINEERING
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Consideration of a Continued Wastewater, Citywide: Budgeted
Organizational Development for Stormwater, Water, Add City
the Engineering Division Irrigation and
General Fund Engineer
Addition of full time Division $144,000
Manager - City Engineer Eliminate
Wastewater
Allocated to: Lab Tech
General Fund - 30% $43,200 ($67,000)
Wastewater - 55% 79,200 Net $77000
Water - 8% 11,500
Stormwater - 5 7200 General Fund:
Irrigation - 2% 2 30% City Eng.
Total $144,000 $43,200
Less:
30% CED
Deputy
Director ($38,900)
Net
Increase
$4,300
2009 Grind and Overlay - REET2 $550,000 Budgeted
16th Avenue from Nob Hill to
Washington Avenue
POLICE
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
None
FIRE
SUPPORT SERVICES
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Fire Station 94 Remodel Fire Capital Fund: $600,000 Budgeted
REET 1 Allocation
6 — Exhibit II • Policy Issue Summary
PUBLIC SAFETY COMMUNICATIONS
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Transfer 2 Public Safety Lead Public Safety Transfer 2 Revenue Budgeted
Dispatchers from Dispatch to 911 Communications positions Increase $179,000
Fund ($179,000)
(Supported by additional 911 Add Public
funding from the County) Increase in County Safety
wide 911 contract Dispatcher
Add 2 Dispatch positions: $60,000
Public Safety Dispatcher and Add Public
Public Safety Lead Dispatcher Safety Lead
Dispatcher
$70
Net $130,000
Net Savings to
Dispatch $49,000
PUBLIC WORKS
STREETS
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
40th Avenue Corridor Traffic Street and Traffic $35,000 Budgeted
Movement Improvement Study Engineering Fund -
Gas Tax
Eliminate Vacant Senior Sign Street and Traffic Eliminate 1 Budgeted
Specialist And Upgrade Two (2) Engineering Fund Position and
Part -Time (75 %) Sign Specialists Upgrade 2
To Full -Time Job Classes
Savings:
Net .50 FTE
($34,000)
TRANSIT
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Purchase One 35 foot heavy duty, Transit Capital Fund $400,000 Budgeted
low floor replacement bus - Local Sales Tax
Policy Issue Summary • Exhibit II — 7
REFUSE
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Upgrade Solid Waste Refuse Operating Net Increase $3,000 Budgeted
Maintenance Worker position to Fund
Solid Waste Code Compliance
Officer position
Upgrade Solid Waste Refuse Operating Net Increase $3,125 Budgeted
Maintenance Worker position to Fund
Solid Waste Crew Leader position
PARKS AND RECREATION
DEPT. /DIV. POLICY ISSUE PROPOSED FUNDING PERSONNEL
REQUEST /JUSTIFICATION SOURCE SALARY / BENEFITS NON- PERSONNEL COMMENTS
Solicit requests for proposals Parks and
(RFP's) to lease Fisher Park Recreation Fund
starting in 2010 (no fiscal effect
in 2009)
Develop Upper Kiwanis Park — Parks Capital Parks
Phase 1 Financing Capital
1. State Grant $1,225,000
2. Municipal Debt - Revenue:
Line of Credit or 1. Grant $500,000
Interfund Loan 2. Debt $500,000
(repaid from 3. REET1 $225,000
REET1) Net $1,225,000
3. 2008 and 2009
REET1
Capital allocation
8 — Exhibit II • Policy Issue Summary
EXHIBIT III - SUPPLEMENTAL INFORMATION
TABLE OF CONTENTS
2009 BUDGET DIRECTIVES MEMO
2009 BUDGETED GRANTS AND EXTERNAL REVENUES
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 • Exhibit III -1
2 — Exhibit III • Supplemental Information
2009 BUDGET DIRECTIVES MEMO
MEMORANDUM
April 9, 2008
To: All Department Directors
All Division Managers
From: Dick Zais, City Manager
CC: City Council
Subject: 2008 General Government Budget Directives / Constraints — Effective Immediately
As part of our continuous fiscal monitoring and analysis, and in response to a Council Budget
Committee's request for budget reduction options, the Finance Division is in the process of
preparing 2008 year -end budget projections and 2009 revenue and expenditure forecasts. While
this analysis has not yet been completed, we are preliminarily forecasting a significant gap between
projected 2009 revenues and the funding level needed to sustain 2008 level of services into next
year, given projected cost increases in the future for mandated, contractual and private sector
services. Our projections indicate that the City will be faced with significant increases in the costs
of providing existing core services at current levels in the coming year.
Our preliminary assessment indicates significant cost increases in the following areas: fuel; health
care; county jail costs; private gas, electric and cellular telephone utilities, and labor settlements.
Staff is projecting some increase in revenues, which will partially offset these cost increases.
More information will be provided to you over the next several weeks regarding this "revenue /
expenditure gap" as we better refine our projections.
Accordingly, we must stay ever vigilant regarding our fiscal status and restrain spending whenever
and wherever possible. Therefore, I am continuing the increased constraints on expenditures
that I implemented in July of 2007, with a few refinements. The following General Government
expenditure constraints are in force and are to be followed by all Department Heads and Division
Managers in the operations of your respective areas. I am again directing that the following actions
be taken for all General Government Budgets, effective immediately:
1. Vacant Positions (Permanent and Temporary) *:
• All new vacant positions must be reviewed and approved by the City Manager before
proceeding with any hiring process and /or filling of the position.
2. Overtime and Compensatory Time:
• Overtime or compensatory time is authorized only for emergencies, to maintain
minimum staffing levels, shift schedules, to comply with the Fair Labor Standards Act,
or to meet extended public works project schedules. Any other exceptions must be
Supplemental Information • Exhibit III - 3
approved by the City Manager.
• Monthly updates of All Overtime and Comp. Time for the previous month must be
submitted to the City Manager for review. (Over /Comp Time for Emergency callouts and to
meet minimum staffing levels is exempt from this monthly update requirement.)
3. Vehicle Purchases / Fuel Conservation:
• Vehicle purchases authorized in the 2008 budget must be ordered by mid -year or re-
approved by the City Manager, thereafter. No non - budgeted vehicle purchase orders
are to be processed. Purchase Orders already in process are subject to cancellation upon
review by City Manager.
• Equipment Rental Division Manager is directed to implement those gas /fuel
conservation measures, identified in 2007, that will reduce the City's fuel consumption
by a minimum of a 10 %. Likewise, Department Directors and Division Managers are
directed to work with the Equipment Rental Division Manager in implementing the
conservation measures that will result in this fuel reduction goal.
4. Training and Travel:
• Out -of State Travel /Training is restricted to (a) that required for prisoner transportation
and (b) mandatory training not otherwise available within the State of Washington and
(c) participation in specialized training and conferences, and for important professional
or economic development purposes.
Any exceptions require prior approval by the City Manager before any registrations are
processed or other travel arrangements are booked.
• In -State Training should be limited to required, mandatory training (required training
includes that necessary for professional certifications), and where appropriate for
maintaining professional association relationships, and memberships.
• In -State Travel should be restricted to that necessary to accommodate the approved In-
State training, as defined above, or as necessary for the conduct of official City business.
5. Operating Supplies /Repair and Maintenance:
• All individual expenditures greater than $2,500 that have not been ordered by the end of
September must be re- authorized by the City Manager. Exception: those expenditures
required for emergency response /repair.
• Directors and Division Managers are expected to operate within their 2008 authorized
budgets and are directed to ensure that expenditures - within each service unit - do not
exceed the authorized budget. The City Manager's authorization is required to move
budget allocations between divisions and /or service units.
• When unexpected or emergency situations occur, all necessary expenditures not
budgeted must be absorbed into the Department's authorized budget by the elimination
of other budgeted expenditures. ALL exceptions must be pre- approved by the City
Manager.
4 - Exhibit III • Supplemental Information
6. Capital Purchases:
• Same as #5 above - Operating Supplies /Repair and Maintenance
7. Outside Legal Assistance:
• All requests for engaging outside legal counsel require prior approval by the City
Manager.
8. Professional Service Agreements and Maintenance contracts:
• Are to be reviewed and re- examined with regard to their necessity and justified prior to
being re- budgeted for 2009.
9. Outstanding bills:
• Division Managers are responsible to ensure that an accurate and appropriate invoice
is received for all outstanding bills within a reasonable timeframe after the liability is
incurred.
• All outstanding bills /invoices must be submitted to the Finance Department for
payment within 30 days of receipt of valid invoice.
Additionally,
Unfortunately, additional cost reduction measures will need to be implemented in the development of
the 2009 budget. Further direction will be provided to Department Heads in the near future regarding
the City's fiscal outlook for 2009 and 2009 budget development activities that will be commencing soon.
Summary: The costs increases already experienced in 2008 coupled with those currently identified
that will impact the 2009 General Government budget appear to be significant. It is imperative that
we take action now in order to help minimize the budget reductions that will be necessary in 2009.
Therefore, I am implementing the above noted cost constraints, effective immediately. Any and all
exceptions to this directive will require my prior approval.
Each of you is asked to communicate the City's budget restraint actions to your managers,
supervisors and employees. I would urge you to solicit their involvement and assistance in
identifying additional cost reduction suggestions for our consideration.
Budget control over all expenditures must be a top priority for the balance of this year and beyond.
It is my desire and expectation that each Department Director and Division Manager will be
personally engaged in the control, monitoring, oversight and implementation of these budget
constraints and spending restrictions. I will want to review your progress in meeting these budget
directives in our monthly departmental meetings, and in the 2009 Budget sessions we will be
holding in the coming months.
I appreciate your cooperation; and with the assistance of all employees, we will find a way to
continue to provide critical and essential services to our citizens, maintain a balance budget, as
required by law, and maintain a strong fiscal condition.
Thank you.
Supplemental Information • Exhibit III — 5
2009 BUDGETED GRANTS AND EXTERNAL REVENUES
2009 GRANTS
(Federal, State & Interlocal Subsidies)
AMOUNT
DEPARTMENT DESCRIPTION OF GRANT
Federal / State Capital Grants
Cum Res for Capital Improvement Railroad Grade Separation $13,810,000
Cum Res for Capital Improvement Railroad Grade Separation 4,050,000
Arterial Streets Nob Hill Bridge Repair 2,000,000
Arterial Streets 16th & Washington Reconstruct 1,063,000
Arterial Streets W.O. Douglas Trail Enhancement 696,883
Arterial Streets W.O. Douglas Trail 6th Ave / Naches 492,047
Arterial Streets Coolidge Ave 80th to 88th Ave 490,000
Parks & Recreation Capital Upper Kiwanis Develop / Land 475,000
Arterial Streets W.O. Douglas Bridge Restoration 379,690
Law & Justice Capital Police Cops Tech Grant 314,814
Arterial Streets Dept of Transportation RR Crossing Wa Ave 261,650
Trolley Trolley Enhancement Project 213,776
Transit Capital Reserve WSDOT Grants - Transit Bus 92,500
Law & Justice Capital Coverdell Forensic Imp Grant 59,200
Arterial Streets Fair Ave /Nob Hill Intersection 36,900
Law & Justice Capital JAG Grant 25,000
Total Federal / State Capital Grants 24,460,460
Federal / State Operating Grants - General Government
Police Police Bryne Earmark Grant 266,381
Indigent Defense Public Defense Grant 115,000
Police Auto Theft Prevention Grant 107,000
Parks & Recreation AmeriCorps Grant Thru Employ Sec 72,500
Fire Homeland Security - SAFER 60,000
Municipal Court Judicial Salary Contribution 50,000
Police Police Cops Tech Grant 40,600
Parks & Recreation ALTC Reimbursement Sen Citizens Svcs Act St 30,900
Parks & Recreation Senior Citizen Footcare 30,200
Parks & Recreation State Senior Citizen Day Care / Transportation 10,500
General Fund Property Taxes 6,330
Fire State Patrol Fire Training 3,000
Total Federal / State Operating Grants - General Government 792,411
Federal / State Operating Grants - Other Funds
Transit FTA - Current Yr. Operating Grant 1,650,000
Community Development Community Development Block Grant 1,063,841
Community Development HUD HOME Program 556,250
Community Services Healthy Families - Yakima 487,712
Stormwater Operating Ecology Mapping Grant 120,000
Transit ADA Grant -Dept of Transport 92,500
Community Development City Assistance 90,000
Emergency Services Dept of Health - Prehospital Grant 1,726
Total Federal / State Operating Grants - Other Funds 4,062,029
6 - Exhibit III • Supplemental Information
AMOUNT
DEPARTMENT DESCRIPTION OF GRANT
State Shared Revenue
Streets Gas Tax 1,350,000
General Fund Liquor Board Profits 619,500
Arterial Streets Arterial Street Gas Tax 600,000
General Fund Liquor Excise Tax 420,000
Police Criminal Justice - High Crime 336,000
Firemen Relief & Pension Fire Insurance Premium Tax 72,800
Police Criminal Justice - Violent 49,000
Police Criminal Justice - Special Programs 46,000
Police MVET DUI Payment 16,000
Parks & Recreation Criminal Justice - Special Programs 21,100
Total State Shared Revenue 3,530,400
Intergovernmental Contract / Services
Public Safety Communications 911 Services Contracts 1,305,566
Emergency Services EMS Levy 1,057,000
Public Facilities District Revenue PUB Facilities District Revenue 715,000
Public Facilities District Revenue State Sales Tax - Capitol Theatre 498,000
Police Resource Officers - WV School District 370,440
Public Safety Communications Fire Dispatch Services 177127
Transit Selah - Transit Bus Service 125,000
Public Safety Communications Police Dispatching Service 116,205
Police Union Gap Jail Contract 100,000
Fire Fire Training Services 74,038
Transit Selah - Transit Dial -A -Ride 45,000
Public Safety Communications Information Technical Services 43,254
Fire District #10 - Fruitvale 30,000
Police Personnel Services - Training 25,000
Public Safety Communications Fire District #10 - Fruitvale 21,000
Parks & Recreation School District #7 - Swim Programs 15,000
Public Safety Communications Electronic Tech Maintenance Contract 10,760
Fire Fire Training Programs 9,000
Police Police - Fairgrounds 7,000
Fire Capital Fire Protection Charge / State Fac 2,000
Fire Fire Investigator Services 600
Total Intergovernmental Contract / Services 4,746,990
TOTAL 2009 GRANTS $37,592,290
Supplemental Information • Exhibit III — 7
CRIMINAL JUSTICE
COSTS VS. OTHER GENERAL GOVERNMENT FUNCTIONS
2009 BUDGET
Street/Traffic
$6,045,680
Parks & Recreation 10%
$4,377,598
7%
Criminal Justice
$28,228,420
48%
Other
$20,654,378
35%
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.
8 — Exhibit III • Supplemental Information
GENERAL GOVERNMENT BUDGETS*
1999 THROUGH 2009
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009
AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED AMENDED PRELIMINARY VS 10 YEAR
BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET 2008 INCREASE
General Fund
Criminal Justice $17,462,994 $17157733 $17,477,709 $18,992,948 $19,702,698 $20,061,761 $20,794,116 $22,857,422 $25,014,331 $26,935,856 $28,228,420 5.2% 61.6%
Other 15,429,647 14,860,211 14,914,045 15,571,751 16,913,032 17,476,192 17,862,426 19,557,208 18,856,452 19,782,839 20,654,378 4.6% 33.9%
Parks & Recreation 3,629,742 3,361,230 3,456,199 3,504,423 3,620,410 3,832,816 3,905,396 4,074,592 4,199,143 4,420,906 4,377,598 (1.0 %) 20.6%
Street /Traffic 3,936,319 4,047,156 4,218,454 4,826,542 5,192,894 4,883,030 5,273,574 5,522,653 5,907,885 6,213,833 6,045,680 (2.8 %) 53.6%
Total $40,458,702 $39,426,330 $40,066,407 $42,895,664 $45,429,034 $46,253,799 $47,835,512 $52,011,875 $53,977807 $57353,434 $59,306,076 3.6% 46.6%
JULY JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Consumer Price Index 162.8 168.0 174.5 181.3 184.1 185.7 190.4 194.8 203.8 210.6 223.6 37.3%
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*Excludes double budgeted transfers between general government funds.
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CRIMINAL JUSTICE SALES TAX - .3% EXPENDITURES AND REVENUES
2008 2009
2005 2006 2007 YEAR -END PROPOSED
GENERAL FUND ACTUAL ACTUAL ACTUAL ESTIMATE BUDGET
Police Department
Salaries & Benefits (includes overtime) $197957 $455,878 $551,699 $595,103 $669,299
Miscellaneous (uniform /fuel /travel) 14,436 111,659 146,601 209,000 224,060
Liability Insurance 5,000 5,750 6,325 6,641 6,973
Professional Services /R & M Contractors 0 90,574 6,322 15,000 15,000
Yakima County Jail Cost 65,804 415,852 423,000 330,000 443,500
Total Police Department $283,197 $1,079,713 $1,133,947 $1,155,744 $1,358,832
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) $24,772 $64,150 $49,669 $117343 $174,422
Professional Services 26,730 70,431 72,054 55,000 58,000
Miscellaneous (office supplies /travel /dues) 3,939 0 248 18,000 20,000
Other Expenses (Crime Victims Comp) 0 6,872 0 0 0
Total Municipal Court $55,441 $141,453 $121,971 $190,343 $252,422
The Criminal Justice funds support two Municipal Court Clerk positions and a 1/2 -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) $29,635 $99,941 $99,667 $148,134 $159,042
Professional Services 8,480 0 0 12,500 5,000
Miscellaneous (office supplies /travel /dues) 0 2,216 2,869 3,482 3,500
Total Legal Department $38,115 $102,157 $102,535 $164,116 $167542
The .3% Criminal Justice Sales Tax is being used to supplement criminal justice functions throughout Yakima County.
This money fully funds one Legal Assistant II position, one Assistant City Attorney II position including mandatory
continuing legal education expenses and dues and subscriptions for required Associations.
Information Systems
Salaries & Benefits (includes overtime) $27804 $28,711 $27849 $29,533 $65,848
Small Tools & Equipment 0 41,166 40,100 20,336 0
Miscellaneous 0 0 0 10,000 10,000
Professional Services /R & M Contractors 7461 0 0 1,000 0
Data Processing Equipment 0 0 25,471 38,822 0
Total Information System $35,265 $69,877 $93,420 $99,691 $75,848
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. In 2008 approximately one third 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 two years.
10 - Exhibit III • Supplemental Information
2008 2009
2005 2006 2007 YEAR -END PROPOSED
GENERAL FUND (CONT...) ACTUAL ACTUAL ACTUAL ESTIMATE BUDGET
Animal Control /Codes
Salaries & Benefits (includes overtime) $21,732 $59,393 $62,988 $58,540 $71,399
Misc. ( uniforms /supplies /fuel /cellular phone) 0 2,303 3,965 3,590 5,447
Total Animal Control /Codes $21,732 $61,696 $66,953 $62,130 $76,845
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) $2,554 $10,936 $11,340 $7500 $7500
.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 $436,304 $1,465,832 $1,530,166 $1,679,525 $1,938,989
OTHER FUNDS:
Public Safety Communication
Salaries & Benefits (includes overtime) $4,508 $3,008 $56,869 $135,796 $148,146
General Operations Support 0 67,817 0 0 0
Misc. ( uniforms /supplies /fuel /cellular phone) 0 4,978 0 0 0
Small Tools & Equipment 0 0 0 5,000 5,000
Total Public Safety Communication $4,508 75,803 $56,869 $140,796 $153,146
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 one full -time call taker and two
full -time vehicle maintenance attendants including all wages, overtime and supplies.
Law & Justice
Small Tools & Equipment $43,194 $134,282 $5,459 $23,000 $55,000
Operating Equipment 0 0 0 0 31,000
Vehicles 39,436 25,000 81,316 0 0
Capital Outlay 0 16,616 168,369 0 0
Total Law & Justice $82,630 $175,898 $255,143 $23,000 $86,000
The .3% Criminal Justice funds support Capital expenses related to the new positions, technology and services created
with this tax. In 2008 the funds were budgeted to purchase furniture for the new court commissioner and provide
matching funds for a grant that will provide laboratory equipment for the crime lab.
TOTAL EXPENDITURES $523,442 $1,717,533 $1,842,178 $1,843,321 $2,178,135
Revenue $935,203 $1,691,359 $1,797,194 $1,905,750 $1,980,800
REVENUE OVER (UNDER) EXPENDITURES $411,761 ($26,174) ($44,985) $62,429 ($197335)
CUMULATIVE BALANCE $41 1,761 $385,587 $340,602 $403,031 $205,696
Supplemental Information • Exhibit III -11
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 the highest
with salary and benefit costs, representing 75% 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 47.9% to 93.8 %. 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 III includes an analysis based on information gathered by the State Auditor's Office. Figure
III -13 identifies the per capita salary costs for Yakima and 11 other comparable cities, and indicates
that:
• The City of Yakima spends, on the average, $102 less per capita on salaries than other
comparable cities.
• 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.
12 — Exhibit III • Supplemental Information
OPERATING FUNDS
SALARIES AND BENEFITS AS A PERCENTAGE OF TOTAL DEPARTMENT / FUND BUDGET
2009
2009 SALARIES & LABOR
GENERAL GOVERNMENT BUDGET BENEFITS PERCENTAGE
Police $22,607,681 $18,229,365 80.6%
Fire 8,916,125 8,315,277 93.3%
Information Systems 2,482,128 1,741,135 70.1%
Code Administration 1,782,792 1,527,993 85.7%
Financial Services 1,516,266 1,393,033 91.9%
Legal 1,455,786 1,275,468 87.6%
Engineering 1,204,407 1,130,023 93.8%
Municipal Court 1,386,829 1,124,539 81.1%
Utility Services 1,248,127 1,014,150 81.2%
Environmental Planning 898,184 786,347 87.5%
City Manager 518,756 481,333 92.8%
Human Resources 488,048 433,566 88.8%
Records 438,888 262,959 59.9%
Purchasing 257362 230,758 89.7%
City Hall Maintenance 421,583 208,106 49.4%
City Council 214,540 102,844 47.9%
Other General Fund Expenditures 4,684,071 0 0.00%
TOTAL GENERAL FUND $50,521,573 $38,256,896 75.7%
Parks & Recreation 4,377,598 2,192,426 50.1%
Street & Traffic Operations 6,045,680 3,099,764 51.3%
TOTAL GENERAL GOVERNMENT $60,944,851 $43,549,086 71.5%
Economic Development 146,027 52,527 36.0%
Community Development 2,174,807 704,505 32.4%
Community Relations 566,603 392,145 69.2%
Cemetery 261,638 163,601 62.5%
Emergency Services 1,152,430 835,254 72.5%
Public Safety Communications 3,027,543 2,586,757 85.4%
Stormwater 1,801,938 699,555 38.8%
Transit 7,482,899 3,478,812 46.5%
Refuse 4,675,689 1,358,296 29.0%
Sewer Operating 16,883,176 4,973,284 29.5%
Water Operating 7,312,616 2,360,446 32.3%
Irrigation Operating 2,786,735 683,606 24.5%
Unemployment Comp Reserve 152,133 29,706 19.5%
Employment Health Benefit Reserve 9,395,435 128,741 1.4%
Workers Compensation Reserve 1,694,138 108,956 6.4%
Risk Management Reserve 2,783,782 535,905 19.2%
Equipment Rental 6,180,563 870,848 14.1%
Public Works Administration 1,198,818 643,561 53.7%
Other Funds (Capital /Debt Serv. etc) 69,082,250 0 0.0%
TOTAL CITY -WIDE BUDGET $199,704,071 $64,155,591 32.1%
Supplemental Information • Exhibit III -13
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 2009 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. We have eliminated interfund transactions (i.e., those items that flow
out of one fund and into another; we refer to these 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 2009 this includes a Councilmanic
Bond issue for Capitol Theatre and other General Government projects; Public Works Trust Fund
loans for utility capital needs; and potential Local Improvement District (LID) debt issuance.
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
8% 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.
14 — Exhibit III • Supplemental Information
CITY OF Yi Li/4i/
TOTAL RESOURCES
BY CATEGORY
2009 BUDGET
TOTAL EXPENDITURES = $190,586,213
(Excludes Internal Service Funds and other double budgeted resources of $45,997,944)
Other
Capital Reserves $13,578,764
$21,528,470 7% Taxes
11% $55,677,259
30%
Operating Reserves
$17,126,490
-. --. -II -11
7
111 .1111.1
Borrowings
$10,032,763
5% Intergovernmental
Charges for Services
$35,050,177 $37,592,290
20%
18%
Supplemental Information • Exhibit III — 15
CITY OF y ia ,,_ it,
TOTAL RESOURCES
BY CATEGORY AND SOURCE
2009 BUDGET
Police & Fire ■I
i
Gen Government
Parks & Recreation 1
Street Operations a
Street Construction
Gen Govt Const J W
G.O. Debt Service 1
Special Revenue MI:
Transit MI
Utilities
$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0
D Taxes • Intergovernmental • Charges for Services • Borrowings
❑ Operating Reserves • Capital Reserves ❑ Other
(Dollars in Millions)
16 — Exhibit III • Supplemental Information
CITY OF yja
TOTAL EXPENDITURES
BY TYPE
2009 BUDGET
TOTAL EXPENDITURES = $160,070,389
(Excludes double budgeted expenditures of $39,633,682)
Debt Service
$7,807,288
5% Salaries
$49,856,763
Capital 31%
$53,946,211
33%
Benefits
$15,604,793
Supplies 10%
Intergovernmental
$3,208,509 Other Services $7,566,520
2% $22,080,305 5%
14%
Supplemental Information • Exhibit III — 17
18 — Exhibit III • Supplemental Information