HomeMy WebLinkAboutItem 01 - Financial Update � ,
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City Council Qua�erly Meeting Presentation 2/23/2010
1. Current Budget Update
a. General Fund Review
-Revenue review, sales and property tax
-Expenditure review, co�parisons
b. Utility Fund
-Revenue review, comparison
-Expenditw�e coinparisozl
2. Quality of Life Review
-Current status
3. Three year financial projection discussion
4. Financial Planning Calendar &Debt Projeciian Schedule
' S. CIl'Review
a. Project update
6. Major Issue Report Update
7. Outstanding Issues
a. Quality of Life project defu�ition
b. CIP process
c. Budget
d.Audit
e. CMFR
f. City Colulcil itEms
YTD Thru YTD Thru YTD Thru Y'TD Thru
General Fund Revenue Comparison 1/31/10 1/31/09 1/31/08 1/31/07
�d Valorem Tax Collections 5,768,�33 4,454,736 �,410,102 4,776,970
Increase/(Decrease)from Prior Year 1,313,797 (955,366) 633,132 (576,496)
Percentage 29% -18% 13% -11%
Percentage of Year-End Total 69% �8% 72% 77%
Projected FY 2010 Year-End Total 8,340,326 7,615,206 7,491,�97 6,221,669
FY 2010 Budget 7,567,717
Over/(Under)Budget 772,609 10%
Sales Tax Collections(through Dec.09) �,542,712 5,415,660 6,188,288 5,360,054
Increase/(Decrease)from Prior Year 127,052 (772,628) 828,234 267,341
Percentage 2% -12% 15% 5%
Percentage of Year-End Total 26% 26% 27% 25%
Projected FY 2010 Year-End Total 21,166,237 20,595,865 22,922,623 21,212,479
FY 2010 Budget 21,250,000
Over/(Under)Budget (83,763) -0.4%
Franchise Fee Collections 2,688,885 3,896,772 2,835,576 358,697
Increase/(Decrease)from Prior Year (1,207,887) 1,061,196 2,476,879 171,192
Percentage -31% 37% 691% 91%
Percentage of Year-End Tota] 42% 62% 45% 6%
Projected FY 2010 Year-End Total 6,479,242 6,318,671 6,295,317 6,191,153
FY 2010 Budget 6,179,086
Over/(Under)Budget 300,156 5%
Licenses&Permits 268,205 337,351 416,835 664,134
Increase/(Decrease)from Prior Year (69,146) (79,483) (247,300) 305,049
Percentage -20% -19% -37% 85%
Percentage of Year-End Total 34% 31% 34% 38%
Projected FY 2010 Year-End Total 779,672 1,079,178 1,220,657 1,757,395
FY 2010 Budget 1,003,821
Over/(Under)Budget (224,149) -22%
Fines&Forfeitures 576,324 642,177 643,471 479,585
Increase/(Decrease)from Prior Year (65,853) (1,294) 163,886 (85,762)
Percentage -10% -0.2% 34% -15%
Percentage of Year-End Total 29% 29% 29% 30%
Projected FY 2010 Year-End Total 1,959,805 2,208,1 ll 2,197,098 1,606,562
FY 2010 Budget 2,243,528
Over/(Under)Budget (283,723) -13%
YTD Thru YTD Thru YTD Thru YTD Thru
General Fund Expenditure Comparison i/31/l0 1/31/09 1/31/os i/31/o7
Salaries(Full&Part Time) 5,754,191 5,667,910 5,394,376 �,195,868
Increase/(Decrease) from Prior Year 86,280 273,534 198,507 272,594
Percentage 2% 5% 4% 6%
Percentage of Year-End Total 28°/v 29% 30% 26%
Projected FY 2010 Year-End Total 20,338,312 19,269,888 18,131,272 20,207,926
FY 2010 Budget 19,889,246
Over/(Under)Budget 449,066 2%
Overtime 254,610 312,407 228,4ll 326,918
Increase/(Decrease)from Prior Year (57,797) 83,996 (98,507) 118,544
Percentage -19% 37% -30% 57%
Percentage of Year-End Total 31% 37% 26% 32%
Projected FY 2010 Year-End Total 809,770 849,659 880,490 1,033,996
FY 2010 Budget 923,533
Over/(Under}Budget (113,763) -12%
Supplies 748,450 736,987 625,328 644,668
Increase/(Decrease)from Prior Year 11,463 111,659 (19,341) 16,515
Percentage 2% 18% -3% 3%
Percentage of Year-End Total 31% 34% 29% 30%
Projected FY 2010 Year-End Tota1 2,432,901 2,184,285 2,194,098 2,145,309
FY 2010 Budget 2,366,763
Over/(Under)Budget 66,138 3%
Services 1,747,484 1,782,629 1,658,410 1,689,023
Increase/(Decrease)from Prior Year (35,145) 124,219 (30,613) 65,536
Percentage -2% 7% -2% 4%
Percentage of Year-End Total 25% 25% 24% 27%
Projected FY 2010 Year-End Total 6,905,651 7,057,886 7,022,346 6,245,940
FY 20I0 Budget 6,923,130
Over/(Under)Budge� (17,479) -0.3%
Health Insurance 2,420,306 2,162,988 2,127,668 1,858,362
Increase/(Decrease) from Prior Year 257,318 35,320 269,306 281,760
Percentage 12% 1.7% 14% 18%
Percentage of Year-End Total 33% 33% 33% 34%
Projected FY 2010 Year-End Total 7,234,564 6,520,340 6,446,954 5,435,610
FY 2010 Budget 6,220,453
Over/(Under)Budget 1,014,ll 1 16%
YTD Thru YTD Thru YTD Thru YTD Thru
Utility Fund Expenditure Comparison 1/31/10 1/31/09 1/31/08 1/31/07
aalaries(Full&Part Time) 691,136 639,704 592,174 520,283
Increase/(Decrease)from Prior Year 51,432 47,530 71,891 23,397
Percentage 8% 8% 14°/o 5%
Percentage of Year-End Total 29% 29% 30% 29%
Projected FY 2010 Year-End Total 2,383,925 2,237,285 1,994,139 1,813,719
FY 2010 Budget 2,342,991
Over/(Under)Budget 40,934 2%
Overtime 37,723 39,659 37,814 52,447
Increase/(Decrease) from Prior Year (1,936) 1,846 (14,634) 6,771
Percentage -5% 5% -28% 15%
Percentage of Year-End Total 29% 29% 25% 34%
Projected FY 2010 Year-End Total 128,015 137,752 149,680 152,680
FY 2010 Budget 105,621
Over/(Under)Budget 22,394 21%
Supplies 149,113 189,837 184,310 175,262
Increase/(Decrease)from Prior Year (40,724) 5,526 9,049 18,437
Percentage -21% 3% 5% 12%
Percentage of Year-End Total 26% 26% 22% 29%
Projected FY 2010 Year-End Total 574,291 716,454 825,143 603,092
FY 2010 Budget 891,607
Over/(Under)Budget (317,316) -36%
Maintenance 167,689 141,613 84,724 158,437
Increase/(Decrease)from Prior Year 26,075 56,889 (73,713) 53,453
Percentage 18% 67% -47% 51%
Percentage of Year-End Total 16% 20% 11% 17%
Projected FY 2010 Year-End Total 1,045,590 718,024 758,416 920,118
FY 2010 Budget 1,164,078
Over/(Under)Budget (118,488) -10.2%
Purchase/Storage/Treatment 1,553,847 1,617,877 1,902,132 1,301,199
Increase/(Decrease)from Prior Year (64,030) (284,255) 600,933 395,591
Percentage -4% -14.9% 46% 44%
Percentage of Year-End Total 24% 23% 26% 22%
Projected FY 2010 Year-End Total 6,548,127 6,992,504 7,352,930 5,865,857
FY 2010 Budget 7,984,997
Over/(Under)Budget (1,436,870) -18%
YTD Thru YTD Thru YTD Thru YTD Thru
Utility Fund Revenue Comparison 1/31/10 1/31/09 1/31/08 1/31/07
JVater Sales 2,5�9,643 2,729,056 2,653,303 2,523,503
Increase/(Decrease)from Prior Year (169,412) 75,752 129,801 (458,574)
Percentage -6% 3% �% -15%
Percentage of Year-End Total 24% 24% 22% 25%
Projected FY 2010 Year-End Total 10,645,085 11,255,031 11,818,609 9,920,101
FY 2010 Budget 11,938,129
Over/(Under)Budget (1,293,044) -11%
Wastewater Sales 1,812,988 1,668,201 1,634,698 1,729,553
Increase/(Decrease)from Prior Year 144,787 33,503 (94,855) 112,741
Percentage 9% 2% -5% 7%
Percentage of Year-End Total 26% 27% 25% 27%
Projected FY 2010 Year-End Total 6,862,476 6,293,932 6,429,801 6,328,896
FY 2010 Budget 6,901,150
Over/(Under)Budget (38,674) -0.6%
QUALITY OF LIFE FUND FINANCIAL SUMMARY
As of January 31,2010
FY 2007 FY 2008 FY 2009 FY 2010
Actual Actual Actual YTD �l�
BEGINNING FUr]D BALANCE - 3,635,984 8,474,168 1,580,615
FINANCING SOURCES: Total LTD
Transfer from General Fund 3,861,�29 8,500,000 3,500,000 15,861,529
Interest Income - 11�,244 26,216 (4,701) 136,759
Chanje in Investmei�t Value - (2,269) 16,1�3 13,884
Participation 117,731 117,731
Miscellaneous Income - - 310 6Q,000 60,210
Total Fundin�Sources 3,861,529 8,612,976 3,660,309 55,299 16,190,1L
FINANCING USES: Total LTD
BelIaire Park 109,871 - - - 109,871
Main Street Holiday Decorations - 4�,268 57,362 - 102,630
Oak Grove Park Improvements ll5,673 3,729,524 9,656,098 9,167 13,510,461
Outdoor Warning Sirens - - 396,818 24,627 421,445
Community Outreach Center - - 3�,0�6 11,796 46,852
911 Recorder System - - 108,013 - 108,013
Meadowmere Park Boat Ramp - - 2,577 3,734 6,311
Mitchell House Parking Lot - - 297,938 - 297,938
Total Funding Uses 225,544 3,774,792 10;�53,862 49,324 14,603,522
ENDINGFUNDBALANCE 3,635,984 8,474,168 1,580,615 1,�86,�90
NOTE: The FY10 budget allocates$4,260,000 for transfer to the QOL Fund at fiscal year end, subject to availability.
2/19/2010 4:03 PM
La����R��lbe Fi�a�rcial �ore-c�t-
The Long-Range Financial Forecast takes a forward look at the City's General Government
(General, Debt Service and Capital / Street Maintenance funds) revenues and expenditures. Its
purpose is to identify financial trends, shortfalls, and issues so the City can proactively address
them. It does so by projecting out into the future the fiscal results of continuing the City's current
service levels and policies, providing a snapshot of what the future will look like as a result of the
decisions inade in the recent past. The Long-Range Financial Forecast is not intended as a budget,
or as a proposed plan. Instead, it sets the stage for the budget process, facilitating both Council and
staff in establishing priorities and allocating resources appropriately.
Goals of Long-Ran�e Planning
To maYimize the benefit of long-range planning, Council established the following goals:
• Sustain existing programs at high service levels
• Maintain a healthy General Fund balance of at least 20% annually
• Maintain competitive employee compensation at the 50�'percentile of the market
• Provide adequate and stable funding for street and facility maintenance projects
• Pay cash for fleet, capital and technology equipment replacements
• Cap debt service at 25% of the General Fund budget
• Use excess reserves to invest in"Quality of Life" capital projects
The Long-Range Financial Forecast is based on assumptions regarding what will happen in the
regional and state economy over the next three years, and on near-term and long-term revenue
and expenditure drivers.
KeX Revenue Drivers KeX Expenditure Drivers
Tax Rate Overtime Costs
Net Taxable Value Operating Supplies
Sales Tax Apparatus & Tools
Mixed Beverage Tax Motor Vehicle Fuel
Franchise Fees Maintenance
Licenses & Permits Travel, Training & Dues
Charges for Services Utility Costs
Intergovernmental Revenues Professional Services
Fines & Forfeitures Insurance Costs
Interest Income Fleet/Capital Equipment Replacements
Kev Accomplishments
A key objective of the Long-Range Financial Forecast is to meet and/or exceed the long-range
financial goals established by the City Council. The following table provides a sLulunary of how
the FY10 budget met the objectives.
� .
Sustain existing program service levels Yes; No reductions in service
levels projected
Maintain General Fund balance of at least 20% annually Yes; FY10 projected ending
balance is 20%
Maintain competitive employee compensation at the 50 Yes
percentile of the market
Adequate and stable street/facility maintenance fui�ding Yes; funding has increased a
total of 25% since FY08
Cash funding of fleet, capital and technology equipment Yes
re lacements
Cap debt service at 25% of the General Fund budget Yes; FY10 ratio is 22%
Use excess reserves to invest in "Quality of Life" capital Yes; Estimated $4,26 million
rojects investment in FY10
Current Economic Trends Imqactin� Long-Ran�e Forecasting
Although some economic indicators point toward an upturn in the national economy, many
uncertainties still exist within the financial realm. The City's initial forecast, completed two
years ago, assumed a relatively stable economy, low unemployment, and�moderate growth in
both sales and property taxes. However, with an extended lag in retail sales, combined with
elevated foreclosure rates and a slowdown in job growth within the DFW Metroplex, the task of
long-range planning has become much more important, as well as much more difficult.
Within tl�e last twelve months sales tax collections have deciined by $4.5 million citywide,
which inciudes a drop of$2.3 million in the General fund. Consequently, the CCPD fund, which
is supported solely by saies taxes, will require support from the General fund until sales tax
revenue rebounds. Other revenue streams, such as building permits and interest income, have
incurred significant declines during the last fiscal year, with no immediate rebound in sight.
The economy has also affected General Government revenue via administrative fee income from
other funds. A drop in hotel occupancy taxes, as well as a drop in play at the city's golf course
has resulted in an 8% decrease in administrative fee charges. The Convention and Visitors
Bureau has experienced a decline in the number of large convention bookings in the last year,
and projects a decline in convention tourism as many businesses have downsized and curtailed
corporate travel.
The Long-Range Financial Forecast, as presented below, provides a view of the city's fiscal plan
for general government operations, debt service obligations and capital maintenance needs for
the next three years. The forecast assumes that the current tax rate of$0.35 per $100 valuation is
maintained, and includes a planned debt issue of$2.005 million in FY10, but no additional debt
issues in the three-year period of FY11 — FY13. The forecast also projects a stable employment
level, with no increase or decrease in authorized full-time equivalent (FTE) levels throughout the
three-year forecast period.
� � . � � . , � .
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Actual Estimate Bud et Pro'ected Projected Pro'ected
REUENUE AND OTHER FUNDING SOURCES
TaYes 43,692,714 42,216,30� 40,543,633 40,�11,377 39,931,881 40,467,349
Licenses,Fees&Permits 7,515,974 7,411,797 7,182,907 7,549,846 7,585,700 7,623,511
Fines,Forfeitures&Charges for Services 9,519,376 9,660,111 9,815,597 9,852,475 10,019,232 10,188,916
Int�est&Ivfiscellaneous 2,018,968 1,250,531 1,209,948 1,042,475 1,021,318 1,008,414
Bond Refunding Proceeds 0 19,�6�,812 0 0 0 0
Transfers In 5,91�,428 6,700,926 7,840,316 7,�93,750 8,033,931 7,728,694
TOTAL SOURCES OF FLTNDS 68,662,461 86,805,482 66,592,401 66,�49,923 66,�92,061 67,016,883
EXPFNDTTT 1RF,S ANn OTHF.R Fi JNDiN('T i JSF,S
Personnel 22,393,316 23,818,251 2�,993,444 2�,601,431 26,27�,810 26,883,040
Supplies,Maintenance&Services 10,137,7�7 10,200,521 9,990,162 10,�21,721 11,114,�52 11,748,388
Capital/Street Maintenance&Outlays 1,949,138 2,220,024 2,3��,000 2;202,6�3 2,�69,000 2,16�,�00
Insurance 8,065,866 8,354,496 7,728,4�3 8,891,816 9,802,345 10,806,113
Debt Sexvice 12,673,372 12,320,065 13,6�3,6�8 12,090,370 10,443,947 10,116,4�1
Bond Refunding Paym�ts 0 19,651,962 0 0 0 0
Transfers Out 12,117,745 8,487,450 8,454,08� 6,752,6�3 5,919,000 4,815,500
TOTALUSESOFFi_JNDS 67,337,194 85,052,770 67,174,832 66,06Q645 66,124,655 66,534,991
NET CHANGE IN FLJND BALANCE 1,32�,267 1,752,713 (5$2,431) 489,279 467,407 481,891
BEGINNINGFUNDBALANCE 12,749,922 14,07�,189 15,827,901 15,245,470 15,734,749 16,202,1�6
ENDING FLJND BALANCE 14,075,189 15,827,901 1�,245,470 1�,73 4,749 16,202,1�6 16,684,047
Kev Revenue Drivers and Assumptions
Property tarxes are determined by — �
the appraised value of taxable i NCt T'aXable valUe '�
property within the city (tax base) I$6,soo,000,000
and the rate of taxation levied by the
city (tax rate). The tax rate is $6,000,000,000
assumed to remain at the current �
rate of $0.35 per $100 of valuation j
throughout the three-year forecast I$s,soo,000,000 -
window. Although the net taxable '
value (NTV) of all property within I�s,000,000,000 ---
the city has increased by an average
of 2.8% annually since 2001, the �$a,soo,000,000 -
increase has trended downward the i
past two years, at 1.7% and 1.5%, i
respectively. NTV is projected to '$4�000,000,000 � � � � �
2001 2002 2003 2004 2005 2006 2007 2008 2009
increase by 1.5% annually during �
the forecast window.
Sales Taxes are a volatiie revenue source in times of economic uncertainty. Factors such as
consumer confidence, unemployment, retail store relocations and weather conditions are just a
few of the many unpredictable circuinstances which can affect collections. Another factor is
sales tax audits conducted by the state Comptroller's office. A recent audit has determined that
$1.3 million in sales tax payments was credited to Grapevine in error over the past three years.
The city has successfully negotiated a 10-year, zero-interest payback that will amount to a monthly
payment of$10,778 for 120 months. Sales tax projections have been lowered to account for the
$430,000 annual reduction in collections.
In order to make sense of sale tax revenue, an effort has been inade to compute an index, a tool
that will zoom in on sn�ail changes and to help identify trends. This has been accomplished by
computing the difference between a 12-month average and a 36-month average.
Sales Tax Moving Averages
January 1989- Present
$25,000,000 -
$20,000,000 -
$15,000,000 �
$10,000,000 -
$5,000,000 -
I
$0 ,
�'1 � � N M 7 V'i V^ h CJ T O r+ N M 7 � V [� 07 ?1
ao � o, � a a c� a a � a o 0 0 � o 0 0 0 0 0
� � � � � � ^
a �a :a e � e �.�e :v :s � � �.�v :a � �.�a ee �.�e a °a �a s
5 � -o -� � � -� -> > � -o . -� ; -� ^� -� -� -e � -�
���12-Month Av�36-Month Avg
When the 12-month moving average is above the 36-month moving average, growth is rising as
most local governments would like to see. When the moving averages rise to the point that the
gap is wide, concern should be registered as to the sustainability of such a rise. When the 12-
month narrows, touches or finally goes below the 36-month moving average, a yellow flag
should turn to red, as this could be an indicator of trouble on the horizon. At some point the
actual xevenues collected will decline in absolute terms if the downward trend is steep enough or
long enough.
The chart below dramatizes the data spread so that the tremors can be better identified, along
with the trend. The city's 12-month moving average has dipped below the 36-month moving
average only two times in the past 20+ years. The first instance was in October 2002, which
correlates to one year after 9/11, and reflects the negative impact the terrorist act had on sales tax
collections. The dip Iasted for two months and returned positive after December 2002.
Sales Tax Strength Index
12-Month Average % Above/Below 36-Month Average
40.00%
30.00%
20.00%
10.00%
0.00%
-10.00%
T o N M � �n �a r x a o e� n � �n � r x a
ao c� a a � - a a� a a a o 0 0 0 0 0 0 0 0 0
� � � � � o 0 o a = o a e a o - o � '
7 Q :C R 7 � 7 :C R R �C 3 R L6 R :0 7 :�3 3 R 7
�i �. �J '' '9 �. �J ^' '' �J �i �i �J ^� '�i '� '' �r ' '7 �J
The second instance of the 12-month moving average falling below the 36-month average
occurred in June 2009 and has continued to the current time. The rate of the slope indicates a
more prolonged decline, and perhaps a more prolonged recovery may be ahead. In light of this
trend and the previously mentioned audit adjustment, a more conservative forecast is projected.
Sales tax collections in FY11 are projected decline slightly from the FY10 budget, as the FY10
amount does not reflect the audit adjustment. In FY12, collections are projected to improve and
once again be equal to the 36-month average. FY13 collections are projected to increase by 1%
over FY12.
Mixed Beverage Tax collection trends closely mirror sales tax trends, albeit collections are
received on a quarterly, rather than monthly basis. One notable exception is that the 12-month
moving average did Mi�,�ed Beverage Tax Strength Index
not dlp belOW the 12-Month Average% Above/Below 36-Month Average
36-month average in Zs.00�ro
2002. The 12-
month average Zo.00�io
remained above the
36-month average is.00�ro
until the last
collection of FY09. lo.00�io
Mixed beverage tax
collections �e s.00�ro -
projected to rise
0.3% annually over o.00�io
the next three years.
-s.00�ro
in er �n .� r oo a o e�u n v �n �a � m R
a a T a a a o� � o 0 0 0 0 0 0 0
u u u u u u u u u u y �
� 0 p p p p p p p O O O O O O O O
Licenses, Fees & Permits include franchise fees, building permits and other development and
code-related fees. Franchise fees increased by an average of 4.3% over the last six years, but by
only 2.3% in the last two years combined. Franchise fees are projected to increase by 1.14%
annually over the next three years. Revenue derived from licenses and permits has declined by
an average of 3.1%per year over the last six years, and is projected to continue the trend through
FY13.
Fines, Forfeitures and Charges for Services include inunicipal court fines, parks and recreation
service fees, library fines, vital statistics fees and intenlal charges to non-General fund
departments far employee health insurance, fleet maintenance and information technology
services.
Municipal court fines are projected to increase by 5% in FY11 with the implementation of an
electronic ticket writing system (e-citation), which will a11ow for a much more efficient use of
police officer time while on the street during traffic stops. The system allows for electronic
download of citation data directly to the municipal court computer system, thereby increasing the
efficiency of court staff and virtually eliminating data entry mistakes. The municipal court
currently processes over 27,000 revenue-producing offenses annually and dismisses 500 offenses
annually due to officer error. Implementation of the e-citation system will significantly reduce
the number of dismissals due to officer error. The system will be impleinented in phases during
FY11 and is funded through a $3 municipal court technology fee.
Charges for services have increased at an annual rate of 11.8% over the past six years, including
31.3% in both FY07 and FY08. The rapid increase was fueled by ambulance fees, which rose
nearly 400% in FY06 with
the privatization of Charges for Servi�es
collection fee services. $8�000,000
Revenue growth during
FY09 declined to 1.5%, as $��000,000
the economy has affected $6,000,000
insurance coverage, as well
as recreation activities, $5,000,000
another major revenue
stream in this category. $4,000,000 -
Charges for services are
projected to increase 1.5% $3,000,000 � ,
annually during the forecast FY03 FY04 FY05 FY06 FY07 �'Y08 FY09
window.
Interest and �liscellaneous Revenues include interest income from investment,
intergovernmental revenue, insurance reimbursements, subrogation revenue and �ease income
from the collocation of communications antennae on city property. Interest income declined
50% in FY09 from the previous years as rates continue to fall and tight budgets have put a strain
on cash flow. Incotne from insurance reimbursements and subrogation fell 17% during FY09
and are projected to remain flat for the next three years. Overall revenue in this category is
projected to decline 2% annually over the forecast period.
Transfers In consist of payments in lieu of taxes from outside funds to the General fund for '
administrative services and contributions to the Debt Service fund for principal and interest
payments on each fund's portion of outstanding debt obligations.
Administrative fee payments are calculated at 7.5% of revenue for the following funds: Utility
Enterprise (Water & Sewer), Lake Enterprise (Gol�, Convention & Visitors Bureau (CVB),
Stormwater Drainage (SDUS) and 4B Economic Development. Payments have increased at an
annual rate of 8.7% over the
last six years, with double- Administrative Fee Revenue
digit spikes in FY06 $4,000,000
following the opening of
the Gaylord Texan, and
again in FY08 following the $3,000,000 -- -
creation of the 4B fund in
2007. Payments in FY09 ,$2,0�0,000 -
fell by 7.9% as hotel
occupancy tax receipts have
fallen, and play is down at �1,000,000 - - — --
the golf course. In addition,
the slump in sales tax
collections has impacted $� ' ' ' ' �
payments from the 4B fund. FY03 FY04 FY05 FY06 FY07 FY08 FY09
Payments from the Utility Enterprise and SDUS funds have remained stable over the period,
with slight increases each year. Overall, administrative fee payments are projected to increase
5% annually over the next three years.
Kev Expenditure Driders and Assumptions
Personnel costs are based upon the assumption of full employment, with no additional personnel
during the next three years. In addition, there axe no planned reductions in force, as all 17.407
FTE slated for elimination as a result of the General Fund Reorganization in FY07 have been
achieved through attrition.
For FY10, Council authorized employees to receive a merit pay increase equal to one percent of
their current annual base pay rate. The city's compensation plan relies in part on the Employee
Cost Index (ECI), an indicator produced by the U.S. Bureau of Labor Statistics. The ECI tracks
the percentage increase in wages and salaries for a 12-month period, and the data is updated
quarterly. Although the ECI continues to increase quarterly, the rate of the increase has been in
decline since the second quarter of 2008. The latest ECI update recorded an increase of 1.86%,
the smallest increase in over four years. For FY11, a merit pay increase of 2% is projected.
A September 2009 survey of the eighteen Metroplex cities which compete with Grapevine for
employees indicated that ten (56%) were not planning merit raises for FY10, although two of
them planned to issue one-time lump sum bonuses. Of the eight cities that planned to award
merit increases, only two planned increases of more than 2%.
Employment Cost Index The forecast for FY12
% Increase in Wages&Salaries per 12-mo Period arid FZ'13 is a return to
4.00% the traditional schedule
of 3% merit / 5% step
3.50% - increases for all full-
3.00°�o time and regular part-
2.50% - time employees not
2.00% topped out. Personnel
1.50% _ costs also include the
1.00%
planned annual increase
in the TMRS rate to
oso% -- �-- --- accomplish the eight-
o.00% � year phase-in approved
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a�, �`a � a � a c n� � � 0 6. :J L' o
by Council in 2008.
q � -� v� A � � v� o � °� v� q � � v,
Supplies, Maintenance ancl Services are projected to increase at a rate of 6% per year. Supplies
have risen at an average rate of 2.9% over the past six years, and are projected to increase by 3%
annually. Maintenance costs have actually decreased by an average rate of 1.9% over the past
six years and are projected to remain relatively flat. Service costs have increased an average of
7.2% over the past six years and are projected to continue that trend over the next three years.
Capital / Street Maintenance costs are derived from the five-year plan submitted by the
facilities, parks maintenance, streets and traffic divisions. The plan consists of a detailed
program of activities for each piece of capital infrastructure within the city.
Insurance costs, which include property and casualty coverage as well as employee medical,
dental, vision and life insurance coverage, have risen at an average rate of 10.2% over the past
six years, and are projected to continue at that rate over the next three years. The city continues
to explore new ways to combat spiraling health insurance costs, such as implementing wellness
programs and offering employee incentive programs such as fitness challenges, which promote
more healthy and productive lifestyles. The effects of any proposed health care reforms now
being deliberated by Congress has not been evaluated at this time.
Debt Service costs are projected to decline steadily each year, from $13.6 million in FY10 to
$9.9 million in FY13. As debt has been restructured to take advantage of lower interest rates, the
amount of property tax required to support debt obligations (the I&S portion of the tax rate) will
fall correspondingly as existing debt is paid of£ As the I&S portion of the debt rate decreases,
the ability to generate additional revenue for the General fund (the M&O portion of the t� rate)
is limited due to rollback provisions. To maintain a steady tax rate, the city may choose to issue
new debt...perhaps by financing capital equipment replacements with an equipment note, or by
funding capital street maintenance through a bond issue. To maintain the tax rate at the current
level of$0.35 as assumed in this forecast, some financial considerations must be made.
Transfers out include payments to the Capital Equipment Replacement fund for the acquisition
of new and/or replacement capital equipment, vehicles, heavy machinery, and technology items.
Transfers out also include funds earmarked for the Quality of Life CIP (QOL) fund. With the
creation of the Crime Control & Prevention District (CCPD) in April 2007, Council has directed
that at the end of each fiscal year, all unencumbered funds in excess of the 20% balance
requirement be transferred to the QOL fund to provide cash funding of projects which add to the
community's quality of life. Total transfers from the General fund to QOL to date are $1�.8
million,with an additional $4.26 million budgeted for transfer at the end of FY10.
Transfers to QOL in the three-year forecast window total $6.5 million, and have been impacted
by the decline in revenue, particularly sales tax. As the CCPD is solely supported by sales tax, it
is projected that $3.6 million dollars in funds that would have been available for QOL will be
needed to support the CCPD over the next three years. As noted previously, any decrease in the
M&O portion of the tax rate will affect the amount of funding available for QOL projects.
Alternatives may include issuing debt for capital equipment replacement, thereby freeing up
funds for QOL, or debt financing of QOL capital projects.
Fund Balance Summarv
The General and Debt Service funds each have a fund balance requirement of 20% of net
operating expenditures, the aquivalent of 72 days of operations. The General fund meets the
balance requirement each of the three years, with funds in excess of the 20% requirement
transferred to the QOL fund. The Debt Service fund also exceeds the 20% requirement each of
the three years.
' • � � � : • � � . .
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Acta�al Estimate Bud et Pro'ected Pro'ected Pro'ected
GENERAL FiJND
BeginningBalance 8,229,112 8,918,614 8,425,580 8,425,580 8,878,284 9,307,866
Net O eratin S lus/ Deficit 689,502 (493,034) 0 452,704 429,582 442,816
EndingBalance 8,918,614 8,425,580 8,425,581 8,878,284 9,307,866 9,750,682
Percentage of Operating Expenditures 22% 20% 20% 20% 20% 20%
Days ofOperation 80 73 72 72 72 72
FIJND BALANCE REQUIREMENT 8,014,406 8,343,430 8,424,012 8,878,284 9,307,566 9,7�0,682
Fund balance requirement is 20%of total budgeted eYpenditures(72 days of operation).
DEBT SERVICE Fi1ND
BeginningBalance 3,947,738 4,584,316 6,751,667 6,209,236 6,24�,811 6,283,636
Net O eratin S lus/ Deficit 636 578 2167 351 542 431 36 575 37 825 39 075
EndingBalance 4,584,316 6,751,667 6,209,236 6,245,811 6,283,636 6,322,711
Percentage of Operating Expenditures 36% 21% 45% 52% 60% 62%
Days of Operation 132 77 166 188 219 228
FUND BALANCE REQUIREMENT
Fund balance requirement is 20°/o of total budgeted expenditures(72 days of operation).
Sluninaries for the three funds that comprise the General Govenunent Funds group are as follows:
� � . . � . � • 1
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Actual Estimate Budget Projected Projected Projected
REVENUE AND OTHER FLJNDING SOURCES
Taxes 31,709,020 29,360,045 30,019,717 31,160,6�7 32,164,774 32,982,588
Licenses,Fees&Permits 7,515,974 7,411,797 7,182,907 7,549,846 7,585,700 7,623,511
Fines,Forfeitures&Charges for Services 9,519,376 9,660,I11 9,815,597 9,852,47� 10,019,232 10,188,916
Transfers In 2,997,�67 2,761,940 3,105,975 2,707,872 2,843,266 2,985,429
Interest&Miscellaneous 1,693,898 1,097,076 1,034,948 942,475 921,318 908,414
TOTAL SOURCES OF FLJNDS 53,43�,835 �0,290,969 �1,159,144 �2,213,325 �3,�34,289 �4,688,8�7
EXPENDITURES AND OTHER Fi_TNDING USES
Personnel 22,393,316 23,818,251 24,993,444 2�,601,431 26,275,810 26,883,040
Supplies,Maintenance&Services 10,131,194 10,03�,623 9,983,162 10,514,721 11,107,�52 11,741,388
Capital/Street Maintenance&Outlays 38,212 88,182 0 0 0 0
Insurance 8,065,866 8,354,496 7,728,453 8,891,816 9,802,345 10,806,113
Transfers Out 12,117,745 8,487,450 8,4�4,08� 6,7�2,653 �,919,000 4,815,500
TOTAL USES OF FIJNDS 52,746,333 50,784,003 �1,159,144 51,760,622 53,104,708 �4,246,040
NET CHANGE IN FLJND BALANCE 689,502 (493,034) 0 452,704 429,582 442,816
BEGINNING FiJND B.AI.ANCE 8,229,112 8,918,614 8,425,580 8,425,580 8,878,284 9,307,866
ENDING FLJND BALANCE 8,918,61� 8,425,580 8,425,580 8,878,284 9,307,866 9,750,682
FLTND$ALANCE REQUIREMENT 8,014,406 8,343,430 8,424,012 8,878,284 9,307,866 9,750,682
PERCENTAGE OF COVERAGE 22% 20% 20% 20% 20% 20%
� ' • � • � � � � : � �
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Actual Estimate Bud et Pro�ected Projected Pro'ected
REUENUE AND OTHER FUNDING SOURCES
Taxes 11,983,694 12,856,260 10;523,916 9,350,720 7,767,107 7,484,761
Transfers In 1,062,78� 1,739,986 2,419,341 2,683,225 2,621,665 2,577,765
Int�est&Miscellaneous 270,035 142,217 175,000 100,000 100,000 100,000
Bond Refunding Proceeds 0 19,565,812 0 0 0 0
TOTAL SOURCES OF FUNDS 13,316,514 34,304,27� 13,118,257 12,133,94� 10,488,772 10,162,526
EXPINDTTURES AND OTHER FUNDING USES
G.O.Bond Principa] &Interest 8,422,174 8,373,201 8,622,322 7,752,697 6,831,651 6,�86,959
Cert.of Obligation Principal&Interest 3,703,336 3,314,883 3,79�,187 2,894,960 2,191,530 2,132,257
Tax Notes&NotesPayable 547,862 631,982 1,236,179 1,442,713 1,420,766 1,397,235
Fiscal Agent&Bond Fees 6,563 164,897 7,000 7,000 7,000 7,000
Bond Refunding Paym�ts 0 19,651,962 0 0 0 0
TOTALUSESOFFI.INDS 12,679,93� 32,136,924 13,660,688 12,097,370 1Q4�0,947 10,123,4�1
NET CHANGE IN FUI�D BALANCE 636,578 2,167,351 (542,431) 36,575 37,82� 39,07�
BEGINNINGFLJNDBALANCE 3,947,738 4,584,316 6,751,667 6,209,236 6,245,811 6,283,636
ENDINGFLJNDBALANCE 4,584,316 6,751,667 6,209,236 6,245,811 6,283,636 6,322,711
FLJNDBALANCEREQUIREMENT 2,501,248 6,339,339 2,694,711 2,386,331 2,061,557 1,996,95�
PERCENTAGEOFCOVERAGE 36% 21% 45% 52% 60% 62%
� � ' � � � ' ' ' • 1
Zoo�-os Zoog-o9 Zoo9-io ?oio-i1 Zoii-ia Zoiz-i3
Actual Estimate Bud et Projected Pro'ected Pro'ected
REVENUE AND OTHER FiJNDING SOURCES
Transfers In 1,855,076 2,199,000 2,315,000 2,202,653 2,569,000 2,165,500
Interest&Miscellaneous »,036 11,238 0 0 0 0
TOTAL SOURCES OF Fi_JNDS 1,910,112 2,210,238 2,315,000 2,202,6�3 2,�69,000 2,16�;�00
EXPENDITURES AND OTHER FLJNDING USES
Facilities Capital Maintenance 286,834 250,753 356,000 242,000 197,000 281,500
Parks Capital Maintenance 419,035 441,963 469,000 435,653 822,000 324,000
Streets and Traffic Capital Maintenance 1,205,056 1,439,126 1,530,000 1,525,000 l,»0,000 1,560,000
TOTAL USES OF FLJNDS 1,910,926 2,131,842 2,355,000 2,202,653 2,�69,000 2,165,500
NET CIIANGE IN FLTND BALANCE (814) 78,396 (40,000) 0 0 0
BEGINNING FL1ND BALANCE 573,072 �72,258 650,654 610,6�4 610,654 610,6�4
ENDING FIJND BALANCE 572,258 650,654 610,6�4 610,654 610,654 610,6�4
Financial Plannin� Calendar
May 2010 FY 2011 Budget Kickoff
, �
November 2011 CCPD Renewal Election . ��i�� � �
�
March or November 2012 Possible Bond Election Dates
Debt Proiection 5chedule
Curent and Projected Ratio of Tax Rate FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
�I&O(General Fund Portion) 39% 42% 47% 48% 48% 50%
4iS (Debt Svc Fund Portion) 61% �8% 53% �2% 52% �0%
Net Levy Debt and TIF 12,477,517 11,921,787 10,�48,580 10,212,806 9,845,200 9,199,406
(estimated value on TIF) �- �;�
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Capital Improvement Pi-oiects Review
All Capital Improve111ent Projects authorized during the 1998 election
have been completed.
Major �udget Issue Update - 2/23/10
All items were implemented according to City Colulcil's direction except for the following two
items.
1. Camp Ground fee increases. Staff determined that due to the extended
construction period that fees would not be increased until the new additions were
complete. Upon completion a new tiered structure will be presented to City
Council.
2. Golf Course fee increase. Staff conducted s survey of regular patrons and also
looked at the economic conditions and it's effect on the number of rounds being
played and decided to hold off on the increase until conditions improved.
Salary Increases Given FY 10
Survey Updated February 2010
Police/Fire General EE's Police/Fire General EE's Topped Total Total
Structure Adj. Structure Adj. Step Merit Out For General
MktJCOLA Mkt./COLA Increase Increase Lump Sum Police/Fire Employees
Bedford 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Carrolltoll' 0.00% 0.00°/o 3.00% 0.00% 0.00% 3.00% 0.00%
Colleyville 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Coppell 2.00% 2.00% 0.00% 0.00% 0.00% 2.00% 2.00%
Datlas 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Denton" 2.00% 2.00% 5.00% 0.00% 0.00% 7.00% 2.00%
Euless� 0.00% 0.00% 4.50% 4.50% 0.00% 4.50% 4.50%
Farmers Branch 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Flower Mourld 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Fort Worth� 3.00% 0.00% 3.75% 0.00°/a 0.00% G.75% 0.00%
Ir'ving 0.00% 0.00% 3.50% 3.50% 0.00% �.50% 3.50%
Keller 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Lewisville 1.00% 1.00% 4.00% 1.00% 0.00% 5.00% 2.00%
N RiChland Hills 0.00% 0.00% 2.00% 2.00% 0.00% 2.00% 2.00%
Plano 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
RiChardson 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Southlake 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
University Park 0.00% 0.00% 5.00% 3.00% 0.00% 5.00% 3.00%
Grapevine 0.00% 0.00% 1.00% 1.00% 0.00% 1.00% 1.00%
'The range of step and or merit increases awarded by this city was averaged
O:/SurveyFY10/Salary Increases Given FY10 Numerical Chart