fy 15-16 budget presentation may 18, 2015. to be a vibrant, safe, progressive and prosperous...
TRANSCRIPT
FY 15-16 BUDGET PRESENTATION
May 18, 2015
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To be a vibrant, safe, progressive and
prosperous community in which citizens are actively engaged in
governance and community activities.
To provide value
added services in a
customer friendly,
cost efficient and
effective manner
resulting in a safe
and prosperous
community.
To improve the quality of life of
citizens by providing services that provide for the community’s health, safety and
welfare.
PURPOSE
VISIONMISSION
FRAMEWORK
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FOUNDATION
Despite the many and continual challenges the City faces, there are a number of
positive projects and initiatives underway; this strengthens the City’s infrastructure and overall quality of life for citizens.
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FOCUS
Budget DevelopmentBudget Summary
HighlightsTotal BudgetGeneral FundPowell Bill FundRegional Water FundWater FundSewer FundCapital Reserve Funds
Grant/Capital ProjectsFee ChangesEmployeesBudget Re-capFutureRecognition
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BUDGET DEVELOPMENT
January
Departments finalized budget requests in excel workbook and entered data into financial software
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Council held annual planning retreat
February
Department heads and key budget staff met with budget committee to review
requests
March
Budget committee reviewed requests and began to make revenue projections and analyze
expenditures to develop a recommended budget; held additional budget meetings with larger
departments to negotiate requests
April
Budget committee researched alternative funding sources, identified inefficiencies,
analyzed the budget with input from published trends, Interim City Manager established a
standard for balancing the budget
May
Budget committee finalized recommended budget for document and presentation preparation for Council
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Budget work sessions held to review recommendation
June
Continuation of budget work sessions
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Public hearing and adoption of budget
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HIGHLIGHTS
o General Fundo No Property Tax Increaseo No Sanitation Fee Increase
o Kerr Lake Regional Water Fund o 5% Rate Increase Recommended
o Water Fundo 4% Rate Increase Recommendedo Monthly impact on residential customer using ~5,984 gpm
o In City = $.70 increaseo Out of City = $1.75 increase
o Sewer Fundo 9% Rate Increase Recommendedo Monthly impact on residential customer using ~5,984 gpm
o In City = $4.76 increaseo Out of City = $11.90 increase
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HIGHLIGHTS
o Worker’s Compensation Deductible - $17,500 budgetedo FY 2013-14 net premiums were almost $300,000
o Salaries & Benefitso Anticipating an 18% Health Insurance Premium Increase
o Medical loss ratio increasedo State fees and taxes increased
o .5% Retirement Rate Decreaseo City’s compensation for employees is well below market
o No Reduction-in-Forceo No new positions recommended
o 10 positions requested/2 additional positions neededo Recommend 4% increase for eligible employees - $183,200
o Recommending Phase 2 of the 5-year Classification & Pay Plan be modified to fit budgetary constraints
o Recommending implementation be delayed by three months due to budgetary constraints
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2015-16 TOTAL BUDGET
FUND RECOMMENDED BUDGET
General $15,397,900
Regional Water $4,499,500
Water $6,851,700
Sewer $5,032,300
Powell Bill $440,000
Capital Reserve Funds $8,421,500
Adjustment for Inter-fund Transfers/Cost Allocations
($2,700,500)
TOTAL $37,942,400
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2015-16 TOTAL BUDGET
EXPENDITURES…and keep
expenditures down until we do.
REVENUESWe need to find ways
to increase revenue…
We are required by law to operate under an annual balanced budget ordinance.
GENERAL FUND
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GENERAL FUND
*Current Budget includes amendments approved by City Council since the budget was adopted.
FY 2014-15 Current Budget* $15,405,312
FY 2015-16 Recommended Budget $15,397,900
Difference $7,412
% Decrease .05%
The City continues to endure lingering constraints and the loss of revenues, such as business privilege licenses, which lessens the elasticity and flexibility normally associated with good budgeting.
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GENERAL FUND
MAJOR REVENUES = $10,220,000
Property Tax Rate remains at 62 cents (real property) = $5,300,000
NC DMV Tax and Tag Together (personal property) = $440,000
Sales Tax (remains relatively flat) = $2,650,000
Sanitation Fee remains at $29.00/month = $1,830,000
MAJOR EXPENDITURES = $10,663,800
Public Safety (Police, Fire, Emergency Services) = $6,769,000
Cultural and Public Services (Sanitation, Streets, Recreation Programs, Library) = $3,894,800
The City’s largest revenue sources do not cover the largest service areas!
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GENERAL FUND
o FY 2015-16 Recommendation – Appropriate $325,000o Impact on % depends on current year savingso Based on current spending trends, staff predicts a
significant savings that should positively impact the fund balance
Local Government Commission (LGC) Minimum 8%
Current Status based on the LGC’s Methodology 36.34%
Current Status based on the City’s Methodology 29.88%
City Council Goal 30%
UNDESIGNATED FUND BALANCE AS A % OF EXPENDITURES
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GENERAL FUND
NO FUNDS are budgeted for public buildings capital improvements
NO FUNDS are budgeted for new technological equipment for departments
ONLY $10,000 is budgeted for the Henderson-Vance DDC
ONLY $20,000 is budgeted for street resurfacing
ONLY $20,000 is budgeted for demolition of abandoned structures
ONLY $35,000 is budgeted for storm drainage improvements
ASSET FORFEITURE funds are becoming less and less available
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GENERAL FUND
o $70,700 in lease/purchase payments were removed to consider a delayed payment option - this process includes budgeting the $339,000 revenue and expenditure, receiving a bank loan in FY 2016 and making the first payment in FY 2017.
o 10 positions were requested across 5 departments:o Development Services, Henderson-Vance DDC, Fire,
Recreation, Aycock Aquatics Centero None were recommended!
o Most departments have remained near the same level of funding; factors that may be contributing to any increases include:o Built-in contract increaseso Fully funding the Assistant Finance Director positiono Capital equipment needs
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GENERAL FUND
Vance County Shared Programs – Key Concerns
o Tax Office – This office no longer has responsibility for collection of motor vehicle taxes. This is now handled by the NC Department of Motor Vehicles. Their 25% request for the City share only decreased by .58%
o Board of Elections – A 93.87% increase was requested for FY 2015-16. The City share is 17% for general elections and 100% for municipal elections. Only about 2/3 of their request has been budgeted.
o E-911 – Emergency Services has managed to add personnel while the City has resorted to reductions-in-force. A $19,633 increase was requested for FY 2015-16.
Recommendation – Comprehensive review of the contracts!
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GENERAL FUND
Recommended Budget: $15,397,900
Personnel54%
Operating30%
Capital4%
Debt5%
Contributions/Shared Programs
7%
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GENERAL FUND MAJOR CAPITAL OUTLAYDepartment Item Cost
Information Services Server and Server Switches $15,000
Police Dodge Chargers (2) $49,100
Police - Asset Forfeiture Dodge Chargers (2)/Chevy Impala $72,000
Fire Dodge Caravan $36,700
Public Services Admin. 1/3 Parking Lot Resurface/Restripe $3,000
Garage Service Truck (L/P Delay Payment) $42,000
Street LED Lights for Stop Lights $8,300
Street Portion of Work Order System $3,500
Sanitation Leaf Machine (L/P Delay Payment) $23,100
Sanitation Garbage Truck (L/P Delay Payment) $216,000
Recreation John Deere F-777 Mower $12,000
Recreation Ford F-250 (L/P Delay Payment) $21,500
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GENERAL FUND DEBT SERVICE
TYPE BALANCE FINAL PAYMENT
City Hall $32,750 7/1/2015
Aycock Aquatics Center* $264,266 6/1/2016
Police Station $1,355,000 6/1/2019
Revenue Bonds (Ops Center) $452,839 6/30/2020
TOTAL $2,084,855
Rounded to the nearest dollar* Debt is split 50/50 between the City and County
POWELL BILL FUND
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POWELL BILL FUND
o Allocation is based on the State’s gas tax, and the City’s lane miles and populationo The State is stabilizing the gas taxo The City’s population is decliningo Very little construction of new roads, therefore no
addition of lane miles
o The General Assembly has passed a compromised Senate Bill (SB20)o Revenue estimate is roughly the same for FY
2016 (increase of .15%)o Revenue estimate is expected to decrease in
FY 2017 (decrease of 2.56%)
REGIONAL WATER FUND
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REGIONAL WATER FUND
o Recommending a 5% rate increaseo Each % yields about $39,000o Results in an additional $195,000 in revenues that will
continue to provide for needed capital reserves
o Provides resources for the operations at the Kerr Lake Regional Water Treatment Facility
o Partnership with Warren County and the City of Oxfordo Henderson – Managing Partner/Majority Owner, 60%o Warren County and Oxford – share 20% interest eacho Regional partners sell water at retail to their own customers
and other governmental entities
o City of Henderson sells water to Kittrell Water Association, Franklin and Vance Counties as well as residential, business and industrial customers
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REGIONAL WATER FUND
o Current capacity of the facility is 10 MGDo Funding provided in FY 2009 to pursue the expansion of its
Inter-basin Transfer (IBT) of water from 10 MGD to 14.2 MGDo Under consideration for approval
o The City is considering a design-build concept for completing the plant expansiono Authorization to construct has been extended to December
2016
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REGIONAL WATER FUND
Recommended Budget: $4,499,500
Personnel15%
Operating57%
Capital11%
Debt17%
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DEBT SERVICE
TYPE BALANCE FINAL PAYMENT
KLRWP Priority I Improvements $509,000 4/1/2016
KLRWP Raw Water Improvements $705,902 2/1/2019
KLRWP High Speed Pump Project $1,129,000 5/1/2035
TOTAL $2,343,902
Department Item Cost
Regional Water System SCADA System Replacement $508,000
MAJOR CAPITAL OUTLAY
REGIONAL WATER FUND
WATER FUND
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WATER FUND
o Recommending a 4% rate increaseo Each % yields about $27,000 from the City’s general rate
customerso Needed to absorb the 5% water rate increase from the
Regional Water Fund and fund a limited amount of capital
o Provides for the distribution of potable water to:o The City’s 8,800 customerso Three governmental customers of Kittrell Water Association,
Franklin and Vance Countieso All three Vance County Phases are now on-line, so there will be
a full year of water sales to Vance County for FY 2016
o 82.96% of Water Fund revenues are derived from the sale of water to retail and wholesale governmental customers
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WATER FUND
Recommended Budget: $6,851,700
Personnel16%
Operating65%
Capital1% Debt
18%
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WATER FUND MAJOR CAPITAL OUTLAY
Department Item Cost
Engineering Admin. Survey Grade GPS $10,000
Water Distribution Portion of Work Order System $13,500
Water Distribution Portion of Jet Vac Tuck - Lease/Purchase Payment $30,000
Water Distribution 1/3 Parking Lot Resurface/Restripe $2,250
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WATER FUND DEBT SERVICE
TYPE BALANCE FINAL PAYMENT
Overhead Storage $84,197 5/1/2017
Revenue Bonds (Ops Center) $339,629 6/30/2020
Revenue Bonds (Franklin Co. Line) $2,056,468 6/30/2020
Warren County Water Line $149,653 6/1/2042
Radio Read Water Meter Project $279,232 5/1/2034
2” Water Main Replacement Project $1,898,571 5/1/2035
TOTAL $4,807,750
Rounded to the nearest dollar
SEWER FUND
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SEWER FUND
o Recommending a 9% rate increaseo Each % yields about $37,000 o Needed to provide for increased debt service
o Henderson Water Reclamation Facility Upgradeo Sandy Creek Pump Station Upgradeo Elmwood Cemetery Outfall Project
o Provides for sewer collection and treatment for the city’s 7,088 customers
o 91.44% of Sewer Fund revenues are derived from the sewer user fee
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SEWER FUND
Recommended Budget: $5,032,300
Personnel25%
Operating48%
Capital2%
Debt24%
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SEWER FUND MAJOR CAPITAL OUTLAY
Department Item Cost
Water Reclamation One Ton Truck $38,000
Sewer Collection Portion of Work Order System $13,500
Sewer Collection Portion of Jet Vac Truck – L/P Payment $55,500
Sewer Collection 1/3 Parking Lot Resurface/Restripe $2,250
Sewer Collection I & I Service Truck L/P Payment $6,900
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SEWER FUND DEBT SERVICE
TYPE BALANCE FINAL PAYMENT
NVHS Sewer $62,227 5/1/2016
Ruin Creek Outfall $230,571 5/1/2017
Revenue Bonds (Ops Center) $339,629 6/30/2020
Revenue Bonds (Remaining Projects) $1,532,437 6/30/2020
Sanitary Sewer Loan $469,391 5/1/2033
Elmwood Cemetery Outfall Project (Preliminary)
$1,800,000 1/1/2035
Sandy Creek Pump Station $848,437 5/1/2035
HWRF Improvements (Preliminary) $16,115,000 5/6/2035
TOTAL $21,397,692
Rounded to the nearest dollar
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CAPITAL RESERVE FUNDS
Fund Recommended Budget
Capital Reserve Utilities $324,500
Capital Reserve Economic Development $15,800
Capital Reserve Regional Water $4,208,900
Capital Reserve Rate Stabilization $3,872,300
TOTAL $8,421,500
Capital Reserve Funds help the city prepare for major capital outlay and unforeseen emergencies.
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CAPITAL & GRANT PROJECTS
Capital Improvement and Grant Project Funds are not considered a part of the annual budget process since they remain open for the life of the project.
The 10-year Capital Improvement Plan was submitted to the City Council on January 26, 2015 and approved February 9, 2015.
Departments seek grant funding based on their ability to support the funding with existing resources and are expected to manage any reporting requirements.
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CAPITAL PROJECTS
Regional Water Fund o Expansiono Inter-basin Transfer of Watero High Speed Efficiency Pumpo Filter Rehabilitation
Water Fund o 2” Water Line Project (near completion)o 158 Business Loop – DWSRFo Railroad Street WL Replacemento Thomas Lane Area WL Replacement
Sewer Fundo HWRF Renovation Project (near completion)o Elmwood Cemetery Outfall Project (underway soon)o Sandy Creek Pump Station Project o Storm Restoration/Enhancement for HWRF Access Roado SCADA
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GRANT PROJECTS
o Bureau of Justice Assistance (BJA) Grants
o Governor's Crime Commission (GCC) Grants
o Beckford Drive Widening Project
o Newton Dairy Rd./Birch and Bobbitt St. Sewer Extension Project
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FEE CHANGES
o Please bear in mind that in approving the recommended regional water, water and sewer rate increases, various and miscellaneous fees associated will increase as well.
o Other recommended fee changes will be discussed further during the Fund/Departmental workshops.
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EMPLOYEES
The single most important asset that the City has is its workforce.
Key Strategic Objective 6 acknowledges the value of employees and the need to address several critical workforce related issues
including competitive pay, cost of living adjustment and retention of qualified employees.
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EMPLOYEES
2014 Classification and Pay Study
o Determined the City’s workforce was paid about 22.67% less than peer municipalities
o Cost to implement the plan as recommended by Consultants = $1.4Mo FY 2015 Phase 1 implementation = $117,000 o Phase 2 implementation = 354,105 + $20,000 for needed
performance evaluation training o FY 2016 Recommendation = $183,200 for a modified alternative
of Phase 2 o Shortfall = $190,905
o Modified Alternativeo 4% pay increase for eligible employeeso 4% increase to the salary schedule minimums and maximums
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EMPLOYEES
Staff Capacity and Capability Issues
o Workforce has been reduced by approximately 44 positions since 2001o Departments are expected to do more with lesso This practice leads to staff burnout, less productivity, decreased
efficiency and effectiveness
o Authorized, but unfunded (frozen) positionso Authorized indicates there is an identified need for the positiono As many as 19 have existed in the pasto Currently, the City has 9 authorized/unfunded positionso Budgets have, in part, been balanced by not funding themo Department Directors requested that 4 be funded this year
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BUDGET RE-CAP
o General Fund - $15,397,900o No Property Tax Increaseo No Sanitation Fee Increase
o Regional Water Fund - $4,499,500o 5% Rate Increase Recommended
o Water Fund - $6,851,700o 4% Rate Increase Recommendedo Monthly impact on residential customer using ~5,984 gpm
o In City = $.70 increaseo Out of City = $1.75 increase
o Sewer Fund - $5,032,300o 9% Rate Increase Recommendedo Monthly impact on residential customer using ~5,984 gpm
o In City = $4.76 increaseo Out of City = $11.90 increase
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BUDGET RE-CAPo Powell Bill Revenues are expected to decrease FY 2017o Availability of Asset Forfeiture funds are expected to lesseno Board of Elections under-budgeted o NO FUNDS are budgeted for public buildings capital
improvements (General Fund)o NO FUNDS are budgeted for new technological equipment for
departments (General Fund)o ONLY $10,000 is budgeted for the Henderson-Vance DDCo ONLY $20,000 is budgeted for street resurfacingo ONLY $20,000 is budgeted for demolition of abandoned structureso ONLY $35,000 is budgeted for storm drainage improvementso 4% Pay Increase for eligible employeeso NO new positions recommendedo Many departments are stretched thin due to decreased
staffing and increased responsibilities
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FUTURE
o Capital Utility Projects - supporting growth, attracting industries and bringing about annexation
o Economic Development Commission - involvement and leadership are essential
o Housing Stock - much of it has become dilapidated and deteriorated
o Pending Legislation - E-911 double taxation and Sales Tax laws could generate significant savings…in excess of $500,000
o Scholarship Endowment with VGCC - Does Council wish to re-establish this endowment?
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FUTURE
o Authorized/Unfunded (frozen) Positions - how do we address staffing concerns?
o Information Technology - void of readily accessible staff impedes day to day productivity
o Risk Management - needed to increase workplace safety and address the growing worker’s compensation claims
o 401(k) - recommended to create a more equitable benefits package; Sworn Law Enforcement Officers are eligible by General Statute
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RECOGNITION
Assistant City Manager, Frank Frazier
Assistant Finance Director, Michelle Daniels
City Clerk, Esther McCrackin
Department Directors, Corey Williams, Marcus Barrow, Danny Wilkerson, Mike Ross, Kendrick Vann, Clark Thomas, Tom Spain, Christy Lipscomb and their staff
Executive Assistant, Pat Pearson
Finance Director, Kathy Brafford
Human Resources Director, Cathy Brown
Former City Manager, Ray Griffin
Mayor and City Council
QUESTIONS?
COMMENTS?
CONCERNS?