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HomeMy WebLinkAboutItem 02 Police Special Option Levy Renewal AGENDA ITEM SUMMARY Meeting Date: 5/22/2017 Meeting Type: Work Session Staff Contact/Dept.: Rick Lewis Bob Duey Staff Phone No: 541/726/3740 Estimated Time: 30 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially Responsible and Innovative Government Services ITEM TITLE: POLICE SPECIAL OPTION LEVY RENEWAL ACTION REQUESTED: No Action Required. Provide direction to staff or request additional options for the preparation of a ballot title that would seek the renewal of the current police special option levy. Staff will be preparing options upon Council’s request intended to lead to a final decision at on June 05. ISSUE STATEMENT: The current special operating levy for police services expires as of June 30, 2018. To place this issue on the November 2017 election for renewal, a ballot measure needs to be fully prepared and authorized by Council. To allow an adequate amount of time for the filing of the election and to conduct an information campaign by the City, staff is asking that Council approve the final ballot measure packet and an authorizing resolution for the election prior to Council going on summer recess. ATTACHMENTS: Attachment 1: Council Briefing Memorandum Attachment 2: Police Special Levy FY18 Proposed Budget FINANCIAL/DISCUSSIONS: See Council Briefing Memorandum MEMORANDUM MAY 8TH, 2017 M E M O R A N D U M City of Springfield 5/8/2017 To: Gino Grimaldi COUNCIL From: Richard Lewis, Police Chief Bob Duey, Finance Director BRIEFING MEMORANDUM RE: Police Special Option Levy Renewal ISSUE: The current special operating levy for police services expires as of June 30, 2018. To place this issue on the November 2017 election for renewal, a ballot measure needs to be fully prepared and authorized by Council. To allow an adequate amount of time for the filing of the election and to conduct an information campaign by the City, staff is asking that Council approve the final ballot measure packet and an authorizing resolution for the election prior to Council going on summer recess. COUNCIL GOALS/ MANDATE: Strengthen Public Safety by Leveraging Partnerships and Resources BACKGROUND: The original operating levy was passed in 2002 to address Department staffing that was well below national and regional averages. The levy was renewed in 2006 and 2012, with the levy renewal efforts incorporating the additional objective of funding the operating budget for the Springfield Municipal Jail. The original and subsequent renewal of the operating levy has provided increased staffing of police officers, dispatchers and records personnel, as well as the addition of community service officers positions to the Department. The additional staffing has allowed the Department to improve response times to emergency and non-emergency calls, increase the number and types of calls officers respond to, improve communication and responsiveness to citizens, and increase the capacity to focus attention on specific neighborhood problems and educational opportunities. Prior to the operating levy renewal in 2006, the Department demonstrated a significant improvement in the delivery of police services, however the City’s property crime rate continued to be consistently near the highest in the State of Oregon. It became apparent different resources were required to reduce crime rates. With input from the community and Police Planning Task Force, the Department established goals and objectives to be accomplished by a local municipal jail. Those goals include holding offenders accountable for their actions, increasing revenue from fines and forfeitures, and specifically, reducing property crime rates in Springfield. In July 2006 the operating levy was passed to continue the funding of additional police services positions, as well as the funding of the Springfield Municipal Jail. Since the opening of the Springfield Municipal Jail in January 2010, many goals and objectives have been realized. Between 2009 and 2016, property crime rates have dropped by 17% and person crime rates have dropped by almost 30%. The City has also realized an increase to revenues associated with municipal Attachment 1 - Page 1 of 5 MEMORANDUM MAY 8TH, 2017 court fines and an increase in police officer time spent patrolling Springfield neighborhoods due to the reduced time spent transporting and booking in criminal offenders. The operating levy currently provides funding for eight police officers, five dispatchers, five community service officers, two records and communication specialists, two court clerks, and all nineteen jail positions. The operating levy also provides funding for the entire jail operating budget, operating costs associated to the police services positions the levy funds, and designated prosecution and court operating costs. CURRENT SPECIAL OPTION LEVY BACKGROUND As was mentioned, the first levy for additional police services was passed November 2002 and has been followed by two successful votes for increasing amounts. The second levy in November of 2006 contained all of the same service expectations that were carried in the first levy plus it was anticipated that the new jail would open in the first half of 2010 and resources were added for the first 3 years of the jail operations. The subsequent levy voted on in November 2012 again contained the original expectation from the original levy and was sized at that time for the full time operation of the jail. The current levy has 4 service areas that received funding: The police services programs remains close to the original expectations providing funding for 8 police officers, 5 dispatchers, 5 community service officers and 2 records and communication specialists. The M&S for police services is $300K. The operations of the jail are 100% funded from the current levy. The levy has funding for 19 employees. The accompanying M&S for the jail almost $900K. The municipal court became part of the original levy in the anticipation of the increase work load not only from the 8 new officers but also from the operation of the Jail. 2 FTE were added to court staffing from the levy as well as a .23 Judge-Pro-Tem time for the additional court hours. The City Prosecutor program received additional funding for much the same reasons as the Court as service demands were expected to increase due to the increase in the police program. The table below shows the history of the levies by dates and tax rates accompanied by Real Market Value and Assessed Value trends. When an economy is healthy, services remain constant and costs are within CPI guidance it would be possible to renew a levy from one to the next without increasing the rate. In the City’ current situation, the economy has not been healthy and the addition of the jail to the levy service mix has kept the rate necessary to support these services increasing. 1st Levy 2nd Levy 3rd Levy 4th Levy Date of Vote Nov 2002 Nov 2006 Nov 2012 Nov 2017 Years of Levy FY04-FY07 FY09-FY13 FY14-FY18 FY19-FY23 Rate of Levy $0.66 $1.09 $1.28 $0.0 Taxes Generated Year 1 $1,777,243 $3,817,501 $5,175,716 $ Adopted Budget Year 1 Market Value Year 1 $3,410,483,722 $7, 205,559,254 $6,450,348,959 $ % RMV Growth 111% -10.5% % Assessed Value Year 1 $2,692,792,925 $3,502,295,304 $4,043,528,204 $ AV Growth 30.06% 15.5% % If successful, the levy that will be placed on the ballot this November would have an effective date of July 1, 2018. The actual Real Market Value and the Assessed Value for that year will not be available from Attachment 1 - Page 2 of 5 MEMORANDUM MAY 8TH, 2017 the County Assessor until October 2018. The values for July 2017, the last year of the current levy, will be available in October of 2017. To assist in considering the possible structure of a levy renewal it may be helpful to look at the proposed FY18 budget that was recently approved by the Budget Committee. FY18 is actually the last year of the current levy but will be used as the base year in projecting cost for the 5 fiscal years beginning 7/1/18 and ending 6/30/23. The following information pertains to Proposed Budget for FY18 that is funded from the Police Special Option Levy. Levy Fund Expenses Police Services PROPOSED FY 18 % of Levy Personal Services (20 FTE) $2,215,640 34% Material and Services 304,406 5% TOTAL Police Services $2,520,046 39% Jail Operations Personal Services (19 FTE) $2,411,769 37% Material and Services 889,811 13% TOTAL Jail Operations 3,301,580 50% Municipal Court Personal Services (2.23 FTE) $228,889 Material and Services 430,952 TOTAL Municipal Court $659,841 10% City Prosecutor Material & Services 64,143% 1% TOTAL LEVY EXPENSES FY18 $6,545,610 Levy Fund Revenues Court Conviction Surcharge $223,000 Inmate Housing Fee 4,580 Jail Phone Commissions 12,000 Jail Commissary Revenue 600 Jail Bed Lease Revenue 200,000 Interest Income 14,000 TOTAL NON-TAX REVENUE $454,180 _________ NET OPERATING COST LEVY SERVICES$6,091,143 ASSUMPTION: If FY18 was a 1 Year Operating Levy AV 7/1/16 $4,471,924,355 Assume 3% Growth 134,157,760 AV 7/1/17 $4,606,082,115 Required Tax Support 6,091,143 Collection Rate 94.5% Tax Levy Revenue Required $6,445,653 Tax Levy Tax Required $1.40 Revenue from Current $1.28 Rate $5,571,516 1 Year Shortfall $874,136 Attachment 1 - Page 3 of 5 MEMORANDUM MAY 8TH, 2017 PROPOSED LEVY OPTIONS Special option levies of this type can be for any number of years up to the maximum of 5 years. As the City has historically chosen to set the years for special option levies at 5, all assumptions here will follow that decision. If during discussion an alternate number of years is desired, that can be accomplished. Trending the cost of the current program services over 5 years and giving consideration to resulting tax rates involves estimating expenses, estimating internal revenues and projecting growth that can be anticipated in the City’s assessed valuation. An additional factor for consideration is the possibilities of any foreseen unavoidable program service cost that may arise during this same period. For this type of costing, the assumptions are intended to remain fairly middle of the road and not wanting to portray either worse case scenarios or absolute best case scenarios. For trending, the following considerations were logged: For police services there will be at least two labor contracts signed between now and the end of the 5 year levy. Adequate material and services for operations including training has been an issue within the police department. Capital Outlay has been adequate so far but new radios and body cameras are looming issues. There will be two biennium PERS increases (7/2020 and 7/2022) that will occur. For jail operations there are all of the same concerns as police services for labor contracts and PERS increases. Emerging issue for jail operations would be medical expenses, women prisoners and long-term maintenance on facility electronics. For Court services labor contracts and PERS are issues, but the staff is smaller and non-sworn so changes would likely not be as pronounced. Emerging issues may be the selection of a new presiding judge, mental health evaluations and court appointed attorney costs. The portion of the city prosecutor’s contract that is included in the levy is important but small. Normal CPI trends could be used here. For internal revenues, the amount makes up 6.8% of the operating budget. Almost all of the $451K is comprised of Court Conviction Surcharge and Jail Bed Lease Revenue. As neither of these two revenues have been showing increases, these amount are being left flat for this period. Once a levy tax rate is established, the change in the city’s assessed valuation is the major determining factor for the tax revenue to be generated. Setting a rate for the ballot title with the assumption of little or no assessed valuation growth during the period could easily raise the intended rate by $0.10 to $0.15 resulting in too much tax revenue being collected. Conversely, assuming a growth rate that is too far above a reasonable assumption would result in a rate too low to adequately fund the service intended to be provided from the levy. Currently the City is seeing a housing market value recovery that is sustainable enough to help residential property assessed valuation fall back within Measures 47 and 50 guidelines where anticipating a 3% growth in residential AV would be reasonable. Commercial and Industrial are not that predictable at this time. Currently a 3% AV growth factor is being used in the trend data. Using the Proposed FY18 Budget as the baseline for both Personal Services and Material and Services the following would the two extremes of 1) fully funding the existing level of service over the next 5 years from the levy; and 2) adjusting the expenses to consider what it would take to reduce the projected costs to allow the levy rate to remain at $1.28. Attachment 1 - Page 4 of 5 MEMORANDUM MAY 8TH, 2017 Option 1) Retain all current levy services and establish a single rate for the 5 year period. Required Rate: $1.44 per thousand Expenses: FY19 FY20 FY21 FY22 FY23 TOTAL $6.77M $7.09M $7.27M $7.64M $7.87M $36.65M This option fully funds 41.23 FTE and the material & services at the current amount adjusted annually by a CPI. Option2) Reduce costs annually for all 5 years to achieve a rate equal to the current rate Required Rate: $1.28 per thousand Expenses: FY19 FY20 FY21 FY22 FY23 TOTAL $6.77M $7.09M $7.27M $7.64M $7.87M $36.65m ($750K) ($770K) ($790K) ($830K) ($850K) ($4.00M) $6.02M $6.32M $6.48 $6.81M $7.02M $32.65M This option assumes a single level of cuts that would occur in Year 1 rather than smaller cuts in the early years and larger cut in the latter years. The $750K in the first year could equate to 7 to 9 positions (depending upon the positions) or some sharing in reductions with material and services. Reductions made could be considered permanent reductions to the City budget or in some cases, similar to the Fire levy it could be attempted to prioritize them against other city services and reductions made elsewhere. CONCLUSION: Staff is asking the Council for direction so that one or more options may be brought back on June 5th. On that date both a work session and a public hearing at the regular session are currently scheduled. After the public hearing Council will be asked to approve by resolution the ballot measure for the November 2017 election. Similar to the discussion held in the spring of 2015 concerning the renewal of the fire levy staff is expecting that Council will want to understand more about both the possible reductions that could be considered and possible citizen support for such a measure at both extremes. Staff will be prepared to address both of those issues on either the 22nd or the 5th. Attachment 1 - Page 5 of 5 Attachment 2 Page 1 of 3 FY17 CURRENT BUDGET PROJECTIONS FY18 PROPOSED BUDGET 000 Rev Org 411111 Current Taxes -5,248,875 -5,401,265 411211 Delinquent Taxes -112,000 -110,000 423001 Inmate Housing Fee -6,615 -4,580 426606 Court Conviction Surcharge -122,850 -223,000 440202 Dental Contrib - Employee 440212 Medical Contrib - Employee 443011 Jail Phone Commission -2,328 -12,000 443012 Jail Commissary Revenue -630 -600 443014 Jail Medical Service Fee 443101 Jail Lease -168,000 -200,000 451311 Restitution -0 461001 Interest Income -13,000 -14,000 461002 Variance in FMV of Investments 481001 Miscellaneous Receipts 491200 XFR From Fund 100 491206 XFR From Fund 236 499999 Beginning Cash Balance -1,535,423 -1,157,099 Total 000 Rev Org -7,209,721 -7,122,544 MUNICIPAL COURT PROGRAMS 510000 Salaries 151,584 160,717 540000 Overtime 560000 Fringe Benefits 12,630 13,062 560001 Medical/Dental Insurance 40,296 40,348 560003 PERS/OPSRP 10,680 14,622 560005 Workers Compensation 141 611005 Interpreter Fees 1,500 611007 Billing & Coll Exp 40,000 40,000 611008 Contractual Services 611012 Indigent Representation 154,012 329,628 611019 Merchant fees 3,300 5,000 611031 Mental Health Evaluations 18,500 18,500 632001 Telephone, Cellular, Pager 634003 Duplicating Supplies 500 635001 Travel & Meeting Expenses 1,000 636001 Software License Fee 14,618 15,000 636003 Subpoena & Jury Fees 1,000 644002 Memberships, Books, Subscrips 500 645002 Postage & Shipping Charges 5,195 5,000 645003 Office & Computer Supplies 1,500 647009 Program Expense 1,500 671006 Employee Development 2,500 FUND 236 - POLICE SPECIAL LEVY OPTION Attachment 2 Page 1 of 3 680001 Internal Insurance Chgs 1,572 1,608 680014 Internal Employee Benefit Chg 1,596 1,788 680018 Internal MS Enterprise Agreemt 1,536 1,416 680027 Internal Workers Comp Chrgs 1,272 1,392 680030 Int Bldng Preservation Chrgs 1,464 1,620 791002 Public Safety Info System TOTAL MUNICIPAL COURT PROGRAMS 458,255 659,841 POLICE SERVICES AND COURT OPERATIONS 510000 Salaries 2,552,466 2,736,038 540000 Overtime 193,116 203,280 560000 Fringe Benefits 242,661 243,410 560001 Medical/Dental Insurance 763,028 780,587 560002 City Retirement Plan 60,000 65,675 560003 PERS/OPSRP 432,327 522,093 560004 Medical/Dental Insurance 560005 Workers Compensation 28,695 564003 Uniform allowance 46,216 47,065 564005 Cell phone allowance 901 567 570000 Personal Services Adjustments 0 611008 Contractual Services 22,500 611011 Prisoner Exp Medical 300,000 415,000 611019 Merchant fees 6,000 6,000 632002 Ris/Airs/Geo Charges 15,495 21,180 632004 Info System Operations 55,000 75,202 632005 Computer Equipment 0 632006 SunGard Contingency Exp 28,000 28,000 632007 LRIG - SW7 System 14,997 633001 Advertising 634003 Duplicating Supplies 634006 Printing & binding 635001 Travel & Meeting Expenses 2,850 500 636001 Software License Fee 31,326 6,157 641002 Processing Supplies 641006 Medical Supplies 2,100 2,200 641008 Safety Clothing/Eq 9,975 10,500 641009 Cleaning Supplies 641022 Inmate Supplies 35,000 22,000 641023 Prisoner Meal Expense 136,000 136,000 642001 Gasoline & Oil 8,645 9,100 642002 Utilities 55,058 26,982 643003 SUB Water -0 643004 SUB Sewer & Drainage -0 643007 SUB Electricity 0 644002 Memberships, Books, Subscrips 500 500 645002 Postage & Shipping Charges 645003 Office & Computer Supplies 9,500 10,000 645005 Computer Software Attachment 2 Page 1 of 3 645006 Small Furniture & appliances 646002 Clothing Allowance 11,400 13,500 647007 Cleang/Maint Materials 19,000 20,000 647009 Program Expense 80,000 10,500 650065 Hazmat 660004 Equipment Maintenance 17,556 12,000 660013 Bldg Maintenance 30,000 15,000 660016 Vehicle Maintenance 3,675 3,500 660021 Copier Maintenance 671002 City Ee Recognition 100 100 671006 Employee Development -0 2,500 671008 Tuition Reimbursement 3,000 2,500 673001 Recruitment Expense 2,850 3,000 680001 Internal Insurance Chgs 159,312 159,960 680002 Internal Veh Mt Chgs 3,480 3,444 680007 Internal Bldg Maint Chgs 680011 Internal Veh & Equip Rent 17,304 18,225 680012 Indirect Costs 680014 Internal Employee Benefit Chg 31,284 31,284 680018 Internal MS Enterprise Agreemt 13,224 11,652 680027 Internal Workers Comp Chrgs 99,120 74,232 680030 Int Bldng Preservation Chrgs 25,080 28,500 791002 Public Safety Info System TOTAL POLICE SERVICES AND JAIL OPERATIONS 5,525,048 5,821,624 CITY PROSECUTOR SERVICES 611008 Contractual Services 56,612 59,443 636001 Software License Fee 2,500 2,500 636004 Witness Fees 1,000 1,000 644002 Memberships, Books, Subscrips 500 500 645002 Postage & Shipping Charges 200 200 645003 Office & Computer Supplies 647009 Program Expense 500 500 TOTAL CITY PROSECUTOR SERVICES 61,312 64,143 Total 962 Dedicated Reserves 1,157,099 576,936