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HomeMy WebLinkAboutItem03 FY18 Mid-Year Budget Update AGENDA ITEM SUMMARY Meeting Date: 1/22/2018 Meeting Type: Work Session Staff Contact/Dept.: Bob Duey, Finance Paula Davis, Finance Staff Phone No: 541.726.3740 541.726.3698 Estimated Time: 60 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: FY18 MID-YEAR BUDGET UPDATE ACTION REQUEST: No Action. Staff is seeking general Council guidance as it works on both the FY19 and the FY20 budgets that will be presented formally later this spring. ISSUE STATEMENT: As part of the consolidation of the City’s strategic planning program and budgeting for outcomes program the Administrative staff has begun work on the FY19 and FY20 budget preparation processes. As a result of possible significant changes to programs and service levels over this two year period to address both recently identified Council preferred outcomes and rising costs, staff is asking to discuss with Council possible options for continued sustainability. The timing of this work session is allowing for a preliminary consideration of the current planning for FY19 and identifying challenges anticipated in FY20. ATTACHMENTS: 1. FY18 Mid-Year Budget Update Power Point 2. Council Outcomes 3. Unmet Needs Topics DISCUSSION/ FINANCIAL IMPACT: The City of Springfield has consistently received strong community support for the services it provides as evidenced by community survey results and success in our elections to renew public safety special levies. The community financially supports these services through a combination of user fees, charges for services, local taxes, state shared revenue and a many other resources. One of the responsibilities the City has is to utilize and allocate the available resources to the various provided services. In attempting to offer a consistent level of service from one year to the next, the City has found, as many agencies, that annually the cost of those services out grows the identified resources. Increased staffing costs, the need to expand the use of technology, the cost of equipment and the care of infrastructure are all factors on the expense side, but just as much of a factor on the revenue side is the need to see available resources grow at a rate to support consistent services being offered. To be able to achieve financial sustainability, management has been taking a series of steps over that past several years to put a budgeting decision model in place to help address the regularly occurring $1.5M resource gap in our General Fund. Discussion at this work session is intended to provide staff with general direction not only for the FY19 budget but also FY20 to help staff develop a 12 month work plan in preparation for developing a sustainable response for the FY20 budget process. CITY OF SPRINGFIELD FINANCE DEPARMENT FY 18 MID-YEAR BUDGET UPDATE COUNCIL WORK SESSIOIN JANUARY 22, 2018 PREPARATION FOR THE FY19 & FY20 BUDGET PROCESSES FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FY 18 MID-YEAR BUDGET WORK SESSION AGENDA Update on Current Budgeting Practices for Outcomes Council Outcome Results Use of Outcomes for Performance Measures FY18 & FY19 Current and Tentative Actions Unmet Needs Topics FY20 Budget Outlook for the next Biennium Next 12 Months FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FINANCIAL SUSTAINABILITY ~ A state or local government is financially healthy if it can deliver the services its citizens expect, with the resources its citizens provide, now and in the future. Year 4 Priority Based Budget Program o Linking Programs to Council Goals o Performance Measurements Updating of Financial Policies o Completed Reserve, Revenue, Accounting & Financial Reporting, Long Range Financial Planning, Expenditure, Investment o Future Reviews – Budgeting, Capital Asset Management, Debt Council update of 1-3 Year Outcome Priorities o Over 90 Outcomes Linked to 6 Council Goals (Attachment #2) FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FINANCIAL SUSTAINABILITY General Fund Influences For Property taxes, the City’s average AV growth over last 8 years has been 3%. Lane County’s overall has averaged 3.2% For State Shared Revenue, the City’s Population Growth since 2011 has been 1.67% while the State’s Total during this same period has been 7.67% Overall Net Revenue Growth since FY14 has Averaged only 1.5% The City has addressed its low Revenue Growth by controlling expenditures o Since FY10, the City’s FTE count has been reduced from 449.45 to 407.6 (-10%) with the exception of opening the Jail in FY10 with 18 personnel FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FINANCIAL SUSTAINABILITY General Fund Influences (con’t) o Material & Services has grown by an average of 3.2% during this same period 70% of General Fund Resources are Allocated to Public Safety Programs with policy adopted minimum staffing and response time requirements PERS Rates saw a +30% increase for FY18 and is expected to see similar or higher increases every 2 years (FY20, FY22 etc) while addressing an actuarially determined unfunded liability of $39.6M The City Retirement Plan is susceptible to market changes and currently has an unfunded actuarial accrued liability of $12.6M FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 $3.5 $3.7 $3.9 $4.1 $4.3 $4.5 $4.7 $4.9 $5.1 Actual FY10 Actual FY11 Actual FY12 Actual FY13 Actual FY14 Actual FY15 Actual FY16 Actual FY17 Actual FY18 Forecast FY19 Forecast FY20(Billions) Taxable Value Actual Taxable Value Pre-Recession Trend FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 $1.5m tax revenue Attachment 1 Revenue Sharing & Population Growth FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 0.45% 0.24% 0.25% 0.13% 0.12% 0.01% 0.47% 0.53% 0.68% 0.91% 1.11% 1.29% 1.41% 1.74% 0.0% 0.5% 1.0% 1.5% 2.0% $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 FY11 Actual FY12 Actual FY13 Actual FY14 Actual FY15 Actual FY16 Actual FY17 Actual FY18 Est ActualTotal Revenue Sharing ('000s) Total Revenue Sharing City of Springfield Total Revenue Sharing City of Springfield Population Growth Attachment 1 Total PERS/OPSRP Cost FY16 Actual to FY22 Projected FY 2019 COUNCIL WORK SESSIOIN JANUARY 22, 2018 $2,123 $2,180 $2,933 $3,158 $4,254 $4,360 $5,712 1,990 1,950 2,605 2,753 3,679 3,756 4,901 0 2,000 4,000 6,000 8,000 10,000 12,000 FY16 Actual FY17 Actual FY18 Adopted FY19 Projected FY20 Projected FY21 Projected FY22 ProjectedPERs (000's) General Fund All Other FY16 FY18 FY20 PERs Preliminary Rates 12.84%16.85%22.33% 5.21%8.31%13.75% 9.95%13.08%18.48% PERS (w/o 6%) Tiers 1 and 2 - Blended OPSRP- General OPSRP - Police/Fire Springfield UAL as of December 31, 2015 $39,592,814 Attachment 1 FINANCIAL SUSTAINABILITY FY18 Current Year Adjustments - $1.3M Impact The current budget for FY18 attempted to keep ongoing community services in place while addressing the most pressing issues. High level changes were: Added $100,000 towards the City’s economic development effort Added contractual assistance to IT for technology security efforts Added 1 FTE to begin process of updating the Development Code Reduced .5 FTE CMO Administrative Assistant Reduced 1 FTE DPW Building & Land Development Manager Reduced 1 FTE Human Resource Analyst FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FINANCIAL SUSTAINABILITY FY18 Current Year Adjustments - $1.3M Impact (con’t) Reduced 1 FTE Finance Management Analyst Reduced 1 FTE Fire Service Bureau Manager Reduced 2 FTE Ambulance Billing Techs Reduced 1 FTE Police Deputy Chief & required 24 Month Vacancy Management Material & Services Adjustments for All Departments Use of Reserves FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FINANCIAL SUSTAINABILITY FY19 General Fund Tentative Budget Balancing Proposals Additions o Economic Development o UGB expansion legal fees o IP Alerting o Police Radio Replacement o IT Security Officer Reductions o CMO –Reduction in contribution to partner agencies, e.g. o Team Springfield, Greater Eugene and material and service changes o DPW – Reduction in Materials & Services FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FINANCIAL SUSTAINABILITY FY19 General Fund Tentative Budget Reduction Proposals (con’t) o HR – Reduce 1 FTE HR Analyst in risk and benefit programs o Finance/Court – Staff reduction or changes, materials and services o Fire – Delay vehicles and equipment purchase, reduce overtime and materials and services changes o Library –Reduction in material and services and delay in book and material purchases o Police – 24 months vacancy management, delay in vehicles and equipment purchases o Utilize State and Local marijuana tax revenue to meet public safety current services needs o Consider additions to service delivery through funding of any unmet needs papers (Attachment 3) FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FY 2019 COUNCIL WORK SESSIOIN JANUARY 22, 2018 Police 39% Fire and Life Safety 31% Development & Public Works 7% Finance 6% Information Technology 5% Library 4% City Manager's Office 4% City Attorney 2% Human Resources 2% FY19 Projected General Fund Police 46% Fire and Life Safety 28% Development & Public Works 6% Finance 6% Information Technology 4% Library 4% City Manager's Office 3% City Attorney 2% Human Resources 1% FY19 Projected Tax Funds % of Total Operating Budget Attachment 1 FINANCIAL SUSTAINABILITY FY20 General Fund Budget Trends Projections into FY20 indicate similar financial picture as both FY18 and FY19 o Estimated General Fund Expenditures Over Revenue is between $1.7 and $2M o AV growth in projected to still be in the 3% range o Net operating revenues still expected in the 1.5% range o New PERS rates for FY20 & FY21 will result in an annual budget increase of $1.5M city-wide o All employee groups except one are entering into open contract periods or due for the completion of market studies o FY20 has multiple unmet needs papers to address Council outcomes FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FINANCIAL SUSTAINABILITY FY20 Priorities for Improving Sustainability Improve community economic base o Continue economic development efforts to create priority sites, build business retention and expansion Encourage population growth o Affordable housing efforts, job creation Increase and stabilize revenue base o Cost recovery models for existing services o Additional revenue options via taxes, fees or charges Address current service levels and delivery methods o Evaluate service reduction options o Consider alternative service delivery models o FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 FINANCIAL SUSTAINABILITY FY20 Priorities for Improving Sustainability (con’t) Cost Containment of current services o Employee wage and benefit options o PERS long term strategy Capital Asset Management o Financial strategy for existing buildings, streets, and other city infrastructure o Financial strategy for new buildings or utility infrastructure Liquid Asset Management o Continue work on long range financial plan that includes development, review and adherence to financial policies for all funds FY 2019 COUNCIL WORK SESSION JANUARY 22, 2018 Attachment 1 Priority Based Budget Results Map Information Listed by Council Goals Promote and Enhance our Hometown Feel while Focusing on Livability and Environmental Quality Promotes access to a variety of cultural, artistic and educational events Promote Springfield Promote public art Support and participate in family activities Work with TEAM Springfield to support education, recreation and services Encouraging Council involvement in the community; Provide career, library youth services and opportunities that improve graduation rates Encourage diversity and availability for new and affordable housing while fostering a sense of neighborhood Partnerships to promote and encourage a sense of neighborhood Complete land banking project for affordable housing Explore and identify neighborhoods, determine what is already in place and what we can add to Incentive strategies that encourage diversity and availability of housing Fosters an involved, engaged and well-informed community Activate new website Encourage continued social networking interactions Support Springfield staff participation in community projects Ensures public facilities and infrastructure are welcoming and accessible to a diverse community Maintain and develop bike lanes and encourage partnerships to complete bike trails Develop and improve City Hall and Plaza area for public gathering space Public confidence that building are safe Manages and mitigates factors that impact the environmental quality of its air, water, land and other natural resources Continue participation in partnership with MWMC Wetland reclamation projects Protect sensitive environmental areas from illegal or over use Attachment 2 Priority Based Budget Results Map Information Listed by Council Goals Maintain and Improve Infrastructure and Facilities Plan for community sustainability and responsible growth Implement and track sustainable 5-year Community Improvement Plan (CIP) Improve site readiness (make shovel-ready) Minimize natural disaster risk Support publically owned fiber infrastructure Update storm water and sewer master plans Repairs, enhances and continuously invest in well-maintained public infrastructure system Reduce deferred maintenance Reduce backlog of street maintenance and repairs Ensures public facilities are well-maintained and meet the needs of the community Investing in replacement or improvement of key buildings or structures Minimize future impact and costs Designs, operates and manages a well-maintained technology infrastructure Maintain and improve IT infrastructure and security Secures resources and advances community interest for priority projects Partner with development community to determine funding for infrastructure Identify priority projects while identifying funding sources Establish benchmarks for replacement funding of the city’s major infrastructure Attachment 2 Priority Based Budget Results Map Information Listed by Council Goals Foster an Environment that Values Diversity and Inclusion Supports the arts; promotes participation in community events and diversity groups Foster arts reflective of the diverse community Expand outreach to diverse community through community events Participation and representation in diversity groups and activities Promote outreach for small businesses, minority and women-owned businesses Increase small business outreach; minority and women-owned Participate in reverse vendor fairs Fosters an inclusive environment that maintains awareness of accessibility needs for disabled individuals Implement ADA transition plan Increase accessibility for disabled individuals Maintaining awareness of accessibility needs Create a welcoming community that promotes healthy families with avenues for upward mobility and prosperity Support groups who assist new arrivals to community Attracts and promotes a diverse workforce that is reflective of the community Outreach to diversified community for employment opportunities Promote vocational-oriented programs Increase workforce in our community Attachment 2 Priority Based Budget Results Map Information Listed by Council Goals Strengthen Public Safety by Leveraging Partnerships and Resources Provide a continuum of public safety/social services responses that provides access to mental health services Leverage partnerships with service providers to identify entry points for those in need Develop alternative sentencing programs in municipal court for a diverse population Provide training for staff for early recognition and available alternative responses for those in need Engage greater number of citizens in support for safer community Increase public safety outreach programs to promote safer neighborhoods Increase number of community members attending Citizen Police Academy Promote household emergency management preparedness Improve non-vehicular traffic safety through infrastructure improvements Evaluation and assessment of sidewalks, bicycle paths, lighting, and graffiti abatement Continued partnership with ODOT to reduce pedestrian risks through infrastructure Provide grant funding to assist property owners for sidewalk maintenance Stabilize public safety financing by considering alternative service models Review response times within City code for appropriateness Stabilize funding for fire services by investigating alternative models for service response Provide services focused on neighborhood level; Sergeants assigned to certain neighbors or communities Reduce property crimes resulting in safer neighborhoods Increase staff training for emergency management and public safety response Attachment 2 Priority Based Budget Results Map Information Listed by Council Goals Encourage Economic Development and Revitalization through Community Partnerships Enables and encourages opportunities for local business to be successful Expand available business sites Support business incubations Partnerships to increase opportunities Stimulates economic growth by encouraging investments Achieve economic growth wins/successes; allocate funds to programs for economic development Invest in programs for economic development; Build partnerships that encourage a regional approach to economic development Advance opportunities and incentives that encourage private investment, bringing about new jobs and capital investment for businesses Fast and consistent speed to market Update development code for clarity Public access to high speed internet Partner with ODOT to finalize transportation plan Identify City with new technologies while promoting community growth Increase and identify City with new technologies: (Tech, natural resources, CLT wood products, healthcare) Partner with community to market and promote Springfield Community engagement with the big picture and goal Advertise / promote public safety Implement Springfield Look initiative Enables and encourages opportunities for citizens to be successful Support, pursue and increase partnerships that increase training opportunities Support partnerships that increase training opportunities for high school students Attachment 2 Priority Based Budget Results Map Information Listed by Council Goals Provide Financially Responsible and Innovation Government Services Supports decision-making with timely and accurate reports and analysis Track budgets, actual expenditures and monitor loans Balance current revenue with expenditures Develop responsible budget that the identifies the communities highest priorities Attracts, develops and motivates a high-quality, diverse, engaged and productive workforce Improve productivity in workforce Partner with other agencies to expand wellness clinic Provide continuous customer service training Establish strong recruitment and succession planning First issue resolution; provided training and grant autonomy to City employee’s to resolve the issues of the community Protects, manages and optimized financial resources Efficiently manage costs Lobby for PERS and public contracting reform Work with State and Federal governments to explore funding options Pursue options/alternatives that will reduce reliance on fire and police levies Continue conversations with state and federal representatives Provide legislative support to staff, officials and regional partners Set clear expectations and track and evaluate intergovernmental agreements, grants, and partnerships in a mutually beneficial manner Delivers responsive and innovate services to customers while sustaining financial health Sustain a credit rating within a health range for our demographics Brainstorming sessions; welcoming suggestions and ideas Leverage new technologies to improve productivity in the workforce Observe financial policies and funding reserves appropriately Maintain a consistent level of service year after year Be adaptive and proactive in our use of best practices Identifies and responds to issues relating to non-regulatory and non-policy compliance Provides assurance of regulatory and policy compliance to minimize and mitigate risk Attachment 2 Unmet Needs Request Attachment 3 Page 1 of 1 FY19 PBB Program Request Exeutive Team Offsite ATTACHMENT 3 - SIGNIFICANT UNMET NEED REQUESTS ID Dept.Status Program Name Pg. No. Resource Request Total 3 DPW new Capital Projects 8 ADA update needs on street corners $200k 4 DPW FY18 Affordable Housing 11 Springfield specific housing approach $100k-$500k 9 DPW FY18 Capital Projects 14 Continue clean-up of the Police firing range $430k 15 DPW FY17 Street System Maintenance 24 $5m 26 IT Update Shared Systems 31 Replace city telephone system $871k with an ongoing support of up to $277k which includes .5 FTE cost does not include required generator for City Hall $871k onetime $177k ongoing 30 POL Update Patrol 35 Body cameras $180k 32 POL Update Cahoots 37 Continue funding Cahoots, or replacement, after grant runs out set to expire at the end of FY19 $400k 38 POL FY18 Patrol 42 Replace the portable and mobile radio subscriber units over three years $1.2m ($400k x 3yrs) onetime 11 DPW FY18 Comprehensive Land Use/Transportation Planning 21 UGB expansion in north Gateway $1m 12 DPW FY18 Comprehensive Land Use Planning 25 Contractual service or staff to creation and adoption of comprehensive plan map to replace the metro plan diagram. $125k January 5, 2018