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HomeMy WebLinkAboutPackets - Council Packets (1117)Council Meeting Regular Session June 19, 2019 1 Town Council Meeting Announcements 2 Upcoming Meetings 3 4 Fiscal Year 2018/2019 Financial Update Through April 2019 June 19, 2019 Thank you Mayor and Council, I’m pleased to report that the Town’s finances continue to perform well and within budget through the month of February 5 General Fund In the General Fund, total revenues collected this year through Feb are $25.6M compared to $25.2M collected last year through this month. We are about 67% of the way through the fiscal year, and trending right in line with where we expect to be. Expenditures through Feb total $25.2M compared to $22M spent last fiscal year through this month. So through the month of February total collected revenues exceed expenditures by just over $325,000. 6 General Fund Highlights Local sales taxes trending over budget by $564K State-shared revenues trending on budget Revenues estimated to end year over budget by $560K Expenditures estimated to end year under budget by $2.3M OV Marketplace tax rebates ended 12/31/18, savings of $260K No subsidy transfer to Highway Fund ($550K) Savings in utilities, fleet maintenance, elections, outside professional services and judicious budget management by departments Year-end fund balance estimated at $16.4M A few highlights in the General Fund : Local sales taxes are trending to end the year over budget by $264K, driven primarily by a slight uptick in construction sales tax collections over the past few months. Meanwhile, State shared revenues are trending right on budget at year-end Overall, we are estimating to end the year with revenues coming in a very slight 2 tenths of a percent (.2%) under budget or about $64K Gen Fund expenditures are estimated to come in under budget by about $1.9M, with about $577K due to personnel savings, $772K due to O&M savings, of which about $260K in savings is due to the expiration of the OV Marketplace sales tax rebate ending as of December 31st. The remainder of the savings is due to not making the subsidy transfer to the Highway Fund in anticipation of the planned move of some of the Highwy Fund expenses into the General Fund next fiscal year as mentioned in the budget presentation. As a result, the ending fund balance is estimated at $15.4M. 7 Highway Fund In the Highway Fund, total revenues collected this year through Feb are $2.4M compared to $2.3M collected last year through this month. The total revenue budget is $4.1M. Expenditures through Feb total $2M compared to $2.5M spent last fiscal year through this month. Total expenditure budget is $4.6M. So through the month of February total collected revenues exceed expenditures by just over $475,000. 8 Highway Fund Highlights HURF gas tax revenues trending over budget by $328K Revenues estimated to end year under budget by $232K No subsidy transfer from General Fund Expenditures estimated to end year under budget by $312K Year-end fund balance estimated at $523K For Highway Fund highlights, HURF gas tax revenues are still trending over budget by $328K Overall, revenues are estimated to come in under budget by $279K mainly due to the eliminated need for the General Fund subsidy transfer Expenditures are estimated to come in under budget by $264K due to the Tangerine Access to Safeway CIP project of $250,000 rolling over to next year’s budget. Year –end fund balance is estimated at $428K 9 Community Center Fund In the Community Center Fund, total revenues collected this year through Feb are $4.2M compared to $4.3M collected last year through this month. The total revenue budget is $6.7M. Expenditures through Feb total $3.9M compared to $4.3M spent last fiscal year through this month. Total expenditure budget is $6.6M. So through the month of February total collected revenues within the fund exceed expenditures by just over $290,000. (savings – tennis, water, management fee) 10 Community Center Fund Highlights Total fund revenues estimated to end year under budget by $39K Total fund expenditures estimated to end year under budget by $295K Year-end fund balance estimated at $273K Overall, total revenues at year-end are estimated to come in about 2% or $139K underbudget Total expenditures are estimated to end the year under budget by $369K With a year-end fund balance in the fund of $248K 11 QUESTIONS? 12 13 Naranja Park Solar Carport 14 Naranja Park Solar Carport 15 Naranja Park Solar Carport 16 Naranja Park Solar Carport 17 Naranja Park Solar Carport 18 19 Public Safety Personnel Retirement System (PSPRS) Pension Funding Policy June 19, 2019 Thank you Mr. Mayor and members of Council, I’m pleased to round out the presentations this evening on the Town administration departments 20 Purpose and Content of Policy Passage of Arizona House Bill 2097, codified in Arizona Revised Statutes section 38-863.01 Requirements: Annual adoption of pension funding policy by elected body How will Town maintain funding of annual required contributions Define funded ratio target and when will be met How funding requirements will be met Formally accepting pension assets and liabilities Post pension funding policy on Town website In the Finance Department within Administrative Services, we manage all of the accounting functions, process payroll and accounts payable, coordinate the annual financial audit, develop and monitor the budget, manage our debt and investment programs and manage the procurement functions. Our major initiatives also focus mainly on the Strategic Plan areas of Effective and Efficient Government and Town Finances and include working together with the other departments to review the fees charged by the Town for development plan reviews, development impact fees and parks and recreation fees as this has not been done on a comprehensive basis in several years and it’s time to revisit these fees to ensure proper cost recovery. We will also be working with IT to implement two new modules in our financial system suite for eProcurement and vendor self service and for employee expense reporting. The intended result of these systems is to streamline and automate two largely manual and paper-driven processes in making vendor payments and tracking employee expense reporting. We will also implement the bond financing, as needed, based on the Council’s decision and direction with regard to the Community Center and golf course improvements. And finally, we will begin the process of researching the various open books financial transparency solutions that are in the market to determine which works best with our financial software and provides an acceptable experience for the online user. We can then plan for implementation in the following fiscal year. 21 Pension Funding Policy Model template developed by League of Arizona Cities and Towns PSPRS and Correction Officers Retirement Plan (CORP) information included from most recent actuarial reports dated 6/30/18 Given that these departments are primarily all internal support service departments, one could say that the functions of these departments support all areas of the Strategic Leadership Plan, either directly or indirectly, by budget and managing the financial resources, providing the human capital and technology resources, the records management, legal support and overall Town management support to allow all departments to fulfill their respective goals and objectives of the plan. However, this slide lists some of the more specific and relevant areas of the Strategic Leadership Plan that are applicable to the department functions that I will be covering. 22 Pension Funding Policy FY 19/20 Town contribution for PSPRS is 38.59% for majority of members $3 million budgeted for Town’s annual PSPRS contribution, approximately $2 million of which specifically for unfunded liability FY 19/20 Town contribution for CORP is 59.94% ($119,000) Per actuarial analysis, unfunded liabilities estimated to be paid in 18 years, or by June 30, 2036 Funding target is 100% In the Finance Department within Administrative Services, we manage all of the accounting functions, process payroll and accounts payable, coordinate the annual financial audit, develop and monitor the budget, manage our debt and investment programs and manage the procurement functions. Our major initiatives also focus mainly on the Strategic Plan areas of Effective and Efficient Government and Town Finances and include working together with the other departments to review the fees charged by the Town for development plan reviews, development impact fees and parks and recreation fees as this has not been done on a comprehensive basis in several years and it’s time to revisit these fees to ensure proper cost recovery. We will also be working with IT to implement two new modules in our financial system suite for eProcurement and vendor self service and for employee expense reporting. The intended result of these systems is to streamline and automate two largely manual and paper-driven processes in making vendor payments and tracking employee expense reporting. We will also implement the bond financing, as needed, based on the Council’s decision and direction with regard to the Community Center and golf course improvements. And finally, we will begin the process of researching the various open books financial transparency solutions that are in the market to determine which works best with our financial software and provides an acceptable experience for the online user. We can then plan for implementation in the following fiscal year. 23 Pension Funding Policy Recommendation Maintain annual required contributions $3M for PSPRS and $119,000 for CORP Retain 20-year amortization of unfunded liability Dedicate additional payments annually, based on funding availability Additional lump sum of $500,000 for FY 19/20 Achieve goal of 100% funding by June 30, 2036 Review and adopt policy annually Our Human Resources team is responsible for employee recruitment, retention, training and education, benefits administration, compensation analysis and policy/procedure administration. Their major initiatives are focused on Area 6 as well for Effective and Efficient Government and for ensuring our continued ability to recruit and retain talented employees. For next year, the team will continue the multi-year effort to review and update our salary and step plans that began this FY, further develop and implement a new employee onboarding and robust training program, update and streamline our employee annual performance evaluation process and review and update, as needed our Town personnel policies and procedures to ensure they are current and provide consistent and clear direction to our personnel. 24 Questions? 25