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HomeMy WebLinkAboutPackets - Council Packets (1519)Budget Study Sessions FY 2020-21 Recommended Budget May 27 and 28, 2020 Order of Presentations Budget Snapshot Review Budget Adoption Process Preliminary 5-Year Forecast Public Works Police Community and Economic Development Parks and Recreation Water Administrative functions Capital 2 Budget Snapshot FY 2020/21 Town Manager’s Recommended Budget Recommended Budget total = $100.9 M $10.1 M, or 9.1%, decrease from FY19/20 adopted budget General Fund is 3.7% less than last year $2.3 M in planned use of excess reserves; $900,000 for capital Ending fund balance is $14.8M (35.8% of budget), leaving $4.7 above Town Council 25% reserve policy $5 M in contingency included in General Fund 3 Budget Adoption Process David Gephart, CFO Budget Defined A budget is a financial plan or estimate of all Resources and Requirements . A financial representation projecting Activities/Operations during a fiscal year. Each budget looks to the future and tells a “story” through what expenditures will accomplish. Budgets are also a prioritization document. 5 The Need for a Budget Establishes the legal authority for a local government to spend money (called “appropriations”) Required by Arizona Revised Statute Provides accountability to the taxpayer Facilitates the efficient and effective use of limited resources . 6 Developing a Budget Teamwork is required Requirements Drive Resources OR Resources Drive Requirements Conservatism 7 Developing a Budget Town- Wide Budget Summary Summaries by Department/Category/Fund Detail by Line Item 8 Budgetary Control All local governments must establish a “legal level of budgetary control” For the Town of Oro Valley, the legal level of budgetary control is established at the Fund level Provides management flexibility and efficiency, while protecting the government from over-expenditure violations Establishes the budgetary amounts that are reported on and compared against actual expenditures in the Comprehensive Annual Financial Report 9 Balanced Budget Required Can be defined a number of ways depending on the financial policies of the local government: Resources = Requirements (the minimum) Deficit budget Surplus budget Revenues = Expenditures Operating revenues = Operating Expenditures Etc. 10 Budget Cycle Proposals Requested/ Received Proposals Scored/ Graded Preliminary Budget Developed & Presented Public Input Budget Approved/ Adopted Budget Monitoring Throughout Year Budget Amendments Throughout Year 11 Role of elected officials Local elected officials are advocates and gatekeepers Allocate local government resources to best serve the public Keep taxes down and also deliver services that voters expect Have direct involvement in budget/policy/strategic direction and participation in public hearings Meet with Town leadership 12 Lower revenues mean fewer resources Always a degree of uncertainty in budget process Planned expenditures have to be balanced against anticipated revenues If the revenues do not meet expectations, adjustments have to be made to reduce spending If revenues exceed expectations, extra funds will be available Results of budget reductions affect Town operations 13 Resources Beginning Fund Balance (Carryover) Revenues Transfers in 14 Revenues Primary source of income for Town is Sales Taxes State Revenue Sharing Grants Investment Income Debt Issuances Fees and taxes for services (Parks, permits, utility taxes, etc.) Other miscellaneous (donations, etc.) 15 Requirements Expenditures Transfers out Contingency Ending Fund Balance (Carryover) Can include reservations of Fund Balance 16 Expenditures Grouped by either Category or Function, and can include the following: Personnel Operations & Maintenance Debt Service (Principal & Interest on all Debt) Capital Outlay General Government Public Safety Transit Culture & Recreation 17 One time vs. ongoing Personnel Operations & Maintenance Capital Outlay Debt Service 18 Personnel A majority of the annual budget is typically allocated to personnel expenses Personnel costs include much more than the advertised salaries Includes fringe benefits, such as: Retirement contributions Health benefits Worker's compensation Life insurance Social Security and Medicare 19 Operations & Maintenance (O&M) Covers the basic expenditures that support the day-to-day operations, such as: New and replacement uniforms/protective clothing Fuel and utilities Telephone/cell phone charges Hardware and software Vehicle and facility maintenance Training of employees Office Supplies Printing and Advertising Usually allocated in categories that allow for some flexibility Typically the first area to be cut back Need to account for items that require replacement within the upcoming fiscal year Includes operating capital of durable items below $50K 20 Capital Outlay Purchase of durable items and assets Cost more than $50,000 Will last for more than one budget year Inventory record documents purchase price, source, assignment, and disposal of capital items Vehicles are part of the Town’s capital budget 21 Contingency Is strictly a budgetary account meaning no actual costs are posted against it Protects governments for the “unexpected” Natural disasters Economic distress Provides flexibility to take advantage of opportunities Requires Town Council approval 22 Capital Improvement Plan (CIP) Annually updated ten -year planning document for major capital expenses having high community visibility Runs concurrently with budget process Includes all items associated with the investment, including source of funding and operating impact on the budget The first year is the most important year of the document because it directly feeds the budget 23 Budget Monitoring Critical to ensure that actual < budgeted expenditures Provides managers/directors the opportunity to manage their respective budgets throughout the year and make necessary adjustments Provides a basis for developing next year’s budget Some budget adjustments or reallocations may require Town Council approval (ie. Contingency, supplemental budgets, transfers between funds, etc.) 24 PRELIMINARY Five-Year Forecast General Fund and Highway Fund Wendy Gomez Finance and Budget Administrator Forecast Overview Required per adopted financial policies PRELIMINARY forecast -will be updated in late fall when more data on COVID impacts are available Snapshot based upon current known information Serves as foundation for future budgets Sources: University of Arizona, AZ Dept. of Revenue, Joint Legislative Budget Committee, State Finance Advisory Committee, AZ Dept. of Transportation, as well as the knowledge, expertise and professional judgment by Town management and staff 26 General Fund Revenue Assumptions COVID impacts cause a continued slump of retail, restaurant/bar, and bed tax heading into FY 21/22 Construction sales tax and building permit revenues see earlier rebound Pent-up demand in residential and commercial building activity; buyers market? Effect of buildout plays a part towards tail end of forecast, but that could be extended Two-year lag for State shared income tax extends impact on revenues Assumes normal development and recreation fee increases 200 –400 SFR permits per year No annexations included 27 General Fund Expenditure Assumptions Merit increases of 2.5% -3% and step increases included each year after FY 20/21 Increased pension contribution costs Health insurance premiums assume normal increases with gradual transition towards increased employee coverage of dependent costs Forecast includes some capacity, albeit limited, for potential new FTEs CARES act capacity of $1M included in FY 20/21; removed thereafter Pent-up O&M needs assumed in near term (after FY 20/21) Utilizing vehicle reserve/set-aside balances for replacements Continued funding of facility repair and maintenance program Forecast includes continued commitment to capital investment at 5% of projected sales tax collections Forecast preserves Council’s 25% fund balance reserve policy 28 General Fund Forecast 29 General Fund Revenues Town of Oro Valley Five-Year Forecast PRELIMINARY FY 20/21 Recommended FY 21/22 Projected FY 22/23 Projected FY 23/24 Projected FY 24/25 Projected FY 25/26 Projected Beginning Fund Balance 17,157,346 14,819,218 12,132,024 11,452,263 11,586,123 11,654,651 REVENUES Taxes 18,128,304 19,428,421 22,148,364 22,697,958 22,835,923 23,615,697 State Shared Revenue 13,194,438 12,502,522 12,488,661 14,121,931 15,070,210 15,890,585 Charges for Services 2,239,675 2,503,987 2,820,905 2,946,090 3,036,079 3,130,799 Licenses & Permits 1,592,500 2,288,650 2,796,679 2,460,316 2,348,132 2,207,773 Intergovernmental 1,672,000 1,745,720 1,895,423 1,932,189 1,969,680 2,007,907 Grants 1,579,816 584,532 590,377 596,281 602,244 608,266 Miscellaneous 262,500 275,625 303,188 309,251 315,436 321,745 Fines 125,000 128,750 132,613 136,591 140,689 144,909 Interest Income 150,000 187,500 234,375 292,969 322,266 338,379 Transfers In 120,000 120,000 120,000 120,000 120,000 120,000 Total Revenues 39,064,233 39,765,707 43,530,585 45,613,576 46,760,659 48,386,060 GENERAL FUND 30 General Fund Expenditures Town of Oro Valley Five-Year Forecast PRELIMINARY FY 20/21 Recommended FY 21/22 Projected FY 22/23 Projected FY 23/24 Projected FY 24/25 Projected FY 25/26 Projected Beginning Fund Balance 17,157,346 14,819,218 12,132,024 11,452,263 11,586,123 11,654,651 EXPENDITURES Personnel 28,909,163 29,880,797 30,894,845 31,715,917 32,544,973 33,313,801 O&M 10,025,678 9,865,849 10,406,244 10,791,782 11,164,751 11,448,897 Capital Outlay 738,000 575,000 585,000 585,000 590,000 610,000 Transfers Out 1,729,520 2,131,255 2,324,257 2,387,017 2,392,407 2,429,655 Total Expenditures 41,402,361 42,452,901 44,210,346 45,479,716 46,692,131 47,802,353 Surplus/Deficit (2,338,128) (2,687,194) (679,761) 133,860 68,528 583,707 Ending Fund Balance 14,819,218 12,132,024 11,452,263 11,586,123 11,654,651 12,238,358 Reserve as % of Expenditures 35.8%28.6%25.9%25.5%25.0%25.6% GENERAL FUND 31 Highway Fund Revenue Assumptions Near -term boost in HURF revenues after FY 20/21 due to pent - up demand and economic recovery Growth averages 3% per year in tail -end of forecast consistent with ADOT projections HURF forecast assumes preservation of State public safety fee or other replacement funding, should fee be discontinued Reimbursement from Regional Transportation Authority for contract administration of La Cholla project ends after FY 20/21 (subject to project timeline; corresponds with personnel reduction for temporary staff) 32 Highway Fund Expenditure Assumptions Personnel budget increases consistent with General Fund Reduction in FY 21/22 corresponds to completion of La Cholla project O&M assumptions consistent with General Fund Utilizing vehicle reserve/set -aside balances for replacements Pavement preservation funding of $1.4 million to $1.8 million per year maintains current overall condition index (OCI) rating Other capital funding consistent with CIP 10 -year plan Shannon Road construction project timeline assumed over two fiscal years Fund balance ranges from $450 to $1.6 million 33 Highway Fund Forecast 34 Highway Fund Revenues Town of Oro Valley Five-Year Forecast PRELIMINARY FY 20/21 Recommended FY 21/22 Projected FY 22/23 Projected FY 23/24 Projected FY 24/25 Projected FY 25/26 Projected Beginning Fund Balance 612,883 367,599 145,657 453 622,450 1,110,450 REVENUES State Shared Revenue 3,458,929 3,977,768 4,395,434 4,527,297 4,663,116 4,803,009 Grants 210,000 - - - - - Licenses & Permits 25,000 28,750 31,625 28,463 27,039 25,687 Interest Income 5,000 6,250 7,813 9,766 10,742 11,279 Miscellaneous 2,000 2,100 2,310 2,356 2,403 2,451 Total Revenues 3,700,929 4,014,868 4,437,182 4,567,882 4,703,300 4,842,426 HIGHWAY FUND 35 Highway Fund Expenditures Town of Oro Valley Five-Year Forecast PRELIMINARY FY 20/21 Recommended FY 21/22 Projected FY 22/23 Projected FY 23/24 Projected FY 24/25 Projected FY 25/26 Projected Beginning Fund Balance 612,883 367,599 145,657 453 622,450 1,110,450 EXPENDITURES Personnel 1,387,651 1,173,597 1,206,967 1,239,957 1,273,880 1,308,761 O&M 648,062 712,868 748,513 785,940 809,517 833,801 Capital Outlay 1,910,500 2,350,345 2,626,906 1,919,988 2,131,903 2,238,558 Total Expenditures 3,946,213 4,236,810 4,582,386 3,945,885 4,215,300 4,381,120 Surplus/Deficit (245,284) (221,942) (145,204) 621,997 488,000 461,306 Ending Fund Balance 367,599 145,657 453 622,450 1,110,450 1,571,756 HIGHWAY FUND 36 We’ll be back in 10 minutes (7:40) FY 2020-21 Recommended Budget May 27 and 28, 2020 Public Works Department Paul Keesler, Director Public Works -Awards In the category of Transportation Projects less than $5 million 39 Functional Areas Department Overview Administration Highway Fund Transportation Engineering Street Maintenance Fleet and Facility Maintenance Stormwater Utility Fund Transit Services 40 Administration –General Fund Highlights & Accomplishments Obtained ADOT’s commitment to rehabilitate Oracle Road Pima County rehabilitation of Calle Concordia Construction of Naranja Park Playground site infrastructure Oversight to over 100 completed projects Implementation of Town wide Traffic Safety Committee Created Continuity of Operations Plan (COOP) Primary Duties & Structure General Department wide administration Office of the Director/Town Engineer/ Floodplain Administrator. Includes Assistant Director and Administrative Coordinator. Streets Operations Staff –Maintains over 400 lane miles of public streets, which includes: Upcoming Goals & Objectives Support the efforts of RTA Next Creation of a CIP Management committee Department operational review to identify and implement Town process improvement tools Support ADOT’s Oracle Rd. rehabilitation efforts FY19/20 –FY20/21 Strategic Leadership Plan Focus Area 4: Roads, Water and Town Assets Goal 4A: Support investments and strategies that maintain and enhance a quality, integrated and connected transportation network for the community. OBJECTIVES: Explore the feasibility of partnering with the Arizona Department of Transportation to improve Oracle Road pavement conditions and traffic signal coordination. Partner with the Regional Transportation Authority (RTA) in evaluating long -term transportation needs for future RTA continuation, ensuring Oro Valley’s needs are fairly represented.Pavement Crack Sealing Sidewalk repairs Vegetation maintenance Minor street reconstruction Shouldering Pothole prevention & maintenance Street sweeping Capital Improvement Projects Noteworthy General Fund Budget Variance from FYF20 to FY21 24.2% decrease in O&M due to: decrease in general liability insurance Greatly reduced travel & training Minor utility cost reductions, efficiency improvements 41 Transportation Engineering –Highway & PAG/RTA Funds Highlights & Accomplishments Continued and accelerated construction on the La Cholla Boulevard roadway widening project –First pavement lift done Shannon Road Design Via De La Verbenita cul -da-sac rehabilitation La Canada Drive & Moore Road Roundabout Tangerine Road safety access (Safeway Vistoso Plaza) Pusch View Lane Mill/Overlay pavement La Canada @ Canada Hills Rectangular Rapid Flashing Beckons (RRFB) Crosswalk Annual main line striping Maintained a pavement overall condition index (OCI) of 76.95. Primary Duties Manage all road construction projects Issue ROW Permits Review and Inspect all public streets constructed or altered by others Manage and operate 21 traffic signals –24/7/365 Regional roadway and traffic signal coordination with RTA Asset Management • Bridges • Traffic Signals • Signs • Street Marking • Pavement Condition FY19/20 –FY20/21 Strategic Leadership Plan Focus Area 4: Roads, Water and Town Assets Goal 4A: Support investments and strategies that maintain and enhance a quality, integrated and connected transportation network for the community. OBJECTIVES: Maintain an Overall Condition Index (OCI) rating of 76 for all paved streets. Upcoming Goals & Objectives Continue Pavement Preservation –maintain OCI of 76 or greater Complete the La Cholla Blvd. Widening Project Lambert Ln. Pavement Overlay from Lambert Park to La Cholla La Canada Blvd. Safety Improvements PAG TABY Art Project Equipment replacements 42 Street Maintenance –Highway Fund Street Maintenance within the Highway Fund is for O&M only and includes: ADC Funding Outside professional services, such as weed spraying abatement Waste Disposal Materials, such as asphalt, aggregate base, crack seal, etc. Equipment rentals Field supplies –material handling consumables Street Maintenance staff are funded under Administration within the General Fund. Since Highway Fund revenue sources are restricted to roads only –placing staff in Administration, which is funded by the General Fund, allows work outside the roadway, such as the Naranja Playground construction project. FY19/20 –FY20/21 Strategic Leadership Plan Focus Area 4: Roads, Water and Town Assets Goal 4A: Support investments and strategies that maintain and enhance a quality, integrated and connected transportation network for the community. OBJECTIVES: Maintain an Overall Condition Index (OCI) rating of 76 for all paved streets. Highlights & Accomplishments Over 80 sidewalk and curb repairs Annual crack sealing over 25 lane miles (over 90,000 LBS) Shouldering material placement Upcoming Goals & Objectives Returning to regular maintenance activity volume upon completion of the NTP Playground Resuming ADC and restore 100% of all ROW landscaping maintenance to Pre- COVID conditions 43 Fleet & Facility Maintenance –General Fund Highlights & Accomplishments PWCED Front Counter Safety Remodel Police Department Substation and Evidence Facility completion Town Campus Roof Renewal Project PD Property Room Renovation 680 electrical system assessment Sound abatement of select offices in the Administration building. Aquatic Center Restroom Floor Resurfacing Aquatics Center interior and exterior painting Community Center emergency structural beam repair Hopi Room improvements Canada Golf Maintenance electrical assessment PD Main sally port evaporative cooler replacement Town Admin Restroom Renovation -Exterior Community Center Fire Suppression system emergency repair Development of a Preventative Maintenance program with in Cartegraph OMS. Building C (Modular) flooring replacement 680 Fuel Island –Canopy light shield structures FY19/20 –FY20/21 Strategic Leadership Plan Focus Area 4: Roads, Water and Town Assets Goal 4A: Support investments and strategies that maintain and enhance a quality, integrated and connected transportation network for the community. OBJECTIVES: Integrate the capital asset replacement and maintenance plan into the Town’s capital improvement program. Identify ways in which the Town can further reduce its consumption of energy Library boiler repair assessment Community Center electrical system emergency repair PD main station soffits stabilization Fleet Management Plan for use of 3rd Bay @ 680 Calle Concordia Developed new preventative fleet maintenance schedule within Cartegraph to decrease the labor hours attributed to manual processing.44 Fleet & Facility Maintenance –General Fund Primary duties Annual contract management and inspections Elevators, Custodial, HVAC, Supplies, Library, Fire and General Facility Management Project construction management All facility asset management -troubleshoot, maintain, and repair Routine repairs and daily operations of 164,000 sf over 26 buildings All fleet/equipment asset management - troubleshoot, maintain, and repair Develop and implement a preventative maintenance program Fabrication work Inspect and maintain fuel island for damage/repair needs Respond to emergency breakdowns Vehicle registrations Prepare vehicles for auctions Work with procurement on new vehicles Upcoming Goals & Objectives 680 Roof Replacement Aquatic center painting Council Chambers bollards CRC Golf and Overlook stairs Town Hall campus exterior painting Administration Building CRC aerobics floor refinish PD Main Privacy Fence PW MOC Security Gate Above is just a sampling of the larger anticipated projects All cosmetic projects were removed, the projects to accomplish will either be related to safety or to asset management. Noteworthy General Fund Budget Variance from FY20 to FY21 11.1% increase in O&M due to continued necessary facility maintenance activities 45 Stormwater Utility Fund Highlights & Accomplishments Revised the Drainage Criteria Manual to submit to stakeholders Further developed the ten -year capital improvement program for Stormwater Developed the stormwater pollution prevention plan (SWPPP) inspection & tracking program Further developed the Municipal Separate Strom Sewer System (MS4) program Further developed town wide stormwater asset inspections and tracking system Submitted Pre-Disaster Mitigation Grant (PDM) application for Highland Wash Completed Highland, North Ranch, and Carmack Wash Watershed Studies with our partners at Pima County Regional Flood Control District Completed Arizona Disaster Emergency Mitigation Assistance Grant (ADEMA) of $220K for Lambert Lane drainage CIP project Phase 2 FY19/20 –FY20/21 Strategic Leadership Plan Focus Area 5: Land Use Goal 5A: Ensure quality development with integrated architecture and natural open space while maintaining and enhancing the character of the community. OBJECTIVES: Update the Drainage Criteria Manual in the Town’s Stormwater Code and Floodplain Ordinance to incentivize commercial property maintenance of drainage facilities and minimize pollutant runoff. Noteworthy Utility Fund Budget Variance from FY20 to FY21 98.2% decrease in Capital Outlay due to removal of the two Grant funded projects 100% decrease in projected Grant revenue due to the removal of these two projects 8.5% decrease in O&M due to reductions in outside professional services 46 Stormwater Utility Fund Primary duties Floodplain administration Drainage reviews Increased street sweeping and cleaning of town sewer catch basins Detection and removals of illicit discharge of pollutants to the storm sewer system Planning, construction, and maintenance of stormwater management structures Development of good housekeeping practices and pollution prevention plans for Town properties and infrastructure Implementation of stormwater outreach programs to residents, businesses, and developers MS4 Permit administration and reporting Perform all regulatory inspections of assets and Stormwater Pollution Prevention Plan (SWPPP) of all active construction sites Monsoon preparation Upcoming Goals & Objectives Coordinate the new Drainage Criteria Manual with outside stakeholders and adopt Implement 2020 ADEQ Construction General Permit update requirements Complete construction documents for Sierra Wash drainage improvements Complete hydraulic and hydrologic study for Mutterer Wash Inspect 50% of Town owned drainage infrastructure Complete drainage study reviews as needed from CED 47 Transit Services –RTA/General Fund Highlights & Accomplishments Successfully awarded state grant funds ADOT 5310 program to reimburse lift preventative Maintenance Prior to COVID-19 pandemic -increased ridership by an average of 150 riders per month from 2019 Prior to COVID-19 pandemic -decreased mileage per month by an average of 300 miles from 2019 Improved accident prevention rate from 1 per 47k miles (2019) to 1 per 65k miles (2020) Primary duties Provide transportation mobility for seniors, passengers with disabilities and general public Grant administration for vehicle purchases Partners with the Regional Transportation Authority as the primary funding source Upcoming Goals & Objectives Restore ridership to pre-COVID volume and increase community confidence in Transit. Continue to receive state 5310 grant funds Continue the partnership with the RTA and support efforts for RTA Next 48 Roadway Development Impact Fee Fund Highlights & Accomplishments CIP Funding –La Cholla Blvd Construction (partial) CIP Funding –La Canada & Moore Road Roundabout Noteworthy Fund Budget Variance from FY 19/20 to FY 20/21 The FY 19/20 budget anticipated that both the Moore/La Canada Roundabout as well as the Town’s matching commitment for La Cholla Blvd. Widening budget would be paid from this year’s budget. Only the Roundabout was paid out of this year’s budget. Advanced RTA funding to cover the $1,800,000 this year and hold off Town’s commitment till the end of the project in FY21. 49 Police Department Kara Riley, Chief of Police Major Accomplishments -Police Conducted department-wide training of sworn personnel in: Interdiction for the Protection of Children -Assists in identifying children who may be missing, exploited or at risk of being exploited Officer Wellness and Suicide prevention to address national trends Received $107,000 in funding from Governor’s Office of Highway Safety for overtime and equipment to support DUI enforcement, hazardous moving violation enforcement and participation during Southern Arizona DUI Task Force Operations Awarded $226,900 in funding from Operation Stonegarden for equipment, overtime and mileage to combat illegal contraband/human smuggling and apprehend terrorists entering the country Opening of the Property and Evidence Magee Substation Successful implementation of COOP for emergencies FY 19/20 51 TOWN COUNCIL FOCUS AREA 3: Goal 3A Strategic Plan and Public Safety Support strategies that result in a safe community with low crime, safe neighborhoods and positive relationships between law enforcement and community members. 52 Departmental approach Policing –It’s in our nature Priority in community policing and engagement Continue to address each call for service with integrity, excellence and fairness Mitigation of the effects of increased traffic with emphasis on safety Providing essential and efficient police services 53 Fiscal year comparison FY 19/20 FY 20/21 Personnel $16,314,156 $16,379,303 O & M $913,855 $705,122 Capital $303,450 $192,500 Totals $17,531,461 $17,181,136 54 COVID-19 Pandemic Response October 2019, Departments created a Continuity of Operations Plan (COOP) National Incident Management Systems (NIMS) Seamless service during pandemic Collaborating with departments regional partners for supplies and resources Daily participation with Pima County Emergency Operations Center Established weekly briefings for Town Council and Executive Leadership Team Communicated with the public 55 Future Goals Community expectations –exceptional police service will continue Crime analysis, focus on trends Best equipment for officers and staff Community outreach Regional collaboration of training 56 Thank you for watching! We’ll be back tomorrow at 6 p.m.! FY 2020-21 Recommended Budget May 27 and 28, 2020